aaaScenario 1: Wendy Gordon Interview Notes

aaaScenario 1: Wendy Gordon

Interview Notes

· Wendy is 20 years old, single, and a U.S. citizen with a valid social security number.

· On Wendy’s Intake and Interview sheet, she answered “Unsure” to the question, “Can anyone claim you or your spouse on their tax return?”

· During the interview with Wendy, you determine the following facts:

· Wendy was a full-time student during 2014.

· Her only income was $6,400 in wages.

· She lived with her parents all year, but they told her they will not claim her on their 2014 return. Wendy's parents are required to file a return.

· Wendy does not provide more than half of her own support.

1. Wendy can claim one personal exemption on her 2014 tax return.

Interview Notes

· Wendy is 20 years old, single, and a U.S. citizen with a valid social security number.

· On Wendy’s Intake and Interview sheet, she answered “Unsure” to the question, “Can anyone claim you or your spouse on their tax return?”

· During the interview with Wendy, you determine the following facts:

· Wendy was a full-time student during 2014.

· Her only income was $6,400 in wages.

· She lived with her parents all year, but they told her they will not claim her on their 2014 return. Wendy's parents are required to file a return.

· Wendy does not provide more than half of her own support.

2. Wendy has a filing requirement and must file a tax return.

Scenario 2: Joanne Parks

Interview Notes

· Joanne is 32, unmarried, and earned $40,000 in wages.

· Joanne's 67-year-old single mother, Agnes, lives in her own apartment in Seattle.

· Joanne provided more than half of her mother's support and all the cost of keeping up her mother's home.

· Agnes' only income was $6,800 in social security benefits.

· None of Agnes' social security income is taxable, and she is not required to file a tax return.

· Joanne had employer-sponsored health insurance coverage for all of 2014. Agnes had Medicare Parts A and B coverage all year.

· Joanne and Agnes are U.S. citizens and have valid social security numbers.

3. Joanne’s most advantageous allowable filing status is Single.

Interview Notes

· Joanne is 32, unmarried, and earned $40,000 in wages.

· Joanne's 67-year-old single mother, Agnes, lives in her own apartment in Seattle.

· Joanne provided more than half of her mother's support and all the cost of keeping up her mother's home.

· Agnes' only income was $6,800 in social security benefits.

· None of Agnes' social security income is taxable, and she is not required to file a tax return.

· Joanne had employer-sponsored health insurance coverage for all of 2014. Agnes had Medicare Parts A and B coverage all year.

· Joanne and Agnes are U.S. citizens and have valid social security numbers.

4. Who has health coverage that qualifies as minimum essential coverage?

C.

Scenario 3: Mike Hastings

Interview Notes

· Mike is 45 and made $19,000 in wages in 2014. He is single and pays all the cost of keeping up his home.

· Mike's daughter, Brittany, lived with Mike all year.

· Brittany's son, Hayden, was born in November 2014. Hayden lived in Mike's home since birth.

· Brittany is 26, single, and had $1,700 in wages in 2014. She is not disabled.

· Mike provides more than half of the support for both Brittany and Hayden.

· Mike, Brittany, and Hayden are all U.S. citizens with valid social security numbers.

5. Can Brittany claim Hayden as a dependent?

C.

Interview Notes

· Mike is 45 and made $19,000 in wages in 2014. He is single and pays all the cost of keeping up his home.

· Mike's daughter, Brittany, lived with Mike all year.

· Brittany's son, Hayden, was born in November 2014. Hayden lived in Mike's home since birth.

· Brittany is 26, single, and had $1,700 in wages in 2014. She is not disabled.

· Mike provides more than half of the support for both Brittany and Hayden.

· Mike, Brittany, and Hayden are all U.S. citizens with valid social security numbers.

6. Mike has one qualifying child for the earned income credit.

Scenario 4: Paul and Jessica Vermilion

Interview Notes

· Paul, age 24, and Jessica, age 22, are married and want to file a joint return.

· They have one child, Naomi, who is 3 years old and lived with them all year.

· Paul, Jessica, and Naomi lived in the U.S. all year and have Individual Taxpayer Identification Numbers (ITINs). They are not U.S. citizens.

· Paul earned $32,000 in wages. Jessica earned $5,000. They had no other income.

· Paul and Jessica provided all the support for Naomi.

7. Paul and Jessica are notrequired to file a tax return.

Interview Notes

· Paul, age 24, and Jessica, age 22, are married and want to file a joint return.

· They have one child, Naomi, who is 3 years old and lived with them all year.

· Paul, Jessica, and Naomi lived in the U.S. all year and have Individual Taxpayer Identification Numbers (ITINs). They are not U.S. citizens.

· Paul earned $32,000 in wages. Jessica earned $5,000. They had no other income.

· Paul and Jessica provided all the support for Naomi.

8. Paul and Jessica are eligible to claim the earned income credit.

Interview Notes

· Paul, age 24, and Jessica, age 22, are married and want to file a joint return.

· They have one child, Naomi, who is 3 years old and lived with them all year.

· Paul, Jessica, and Naomi lived in the U.S. all year and have Individual Taxpayer Identification Numbers (ITINs). They are not U.S. citizens.

· Paul earned $32,000 in wages. Jessica earned $5,000. They had no other income.

· Paul and Jessica provided all the support for Naomi.

9. May Paul and Jessica claim Naomi as a dependent on their tax return?

D..

Scenario 5: Jim Wells and Sally Fulton

Interview Notes

· Jim and Sally are not married. They lived together all year.

· Sally had $5,000 in earned income during 2014. Jim earned $30,000 in wages.

· Jim and Sally have two children. Tyler is 10 years old, and Jamie is 8.

· Tyler and Jamie lived with Jim and Sally for all of 2014.

· Tyler and Jamie did not provide over half of their own support.

· Jim paid all the rent, utilities, groceries, and other household expenses, which totaled $16,000. Sally paid none of the household expenses.

· Jim and Sally agreed they would each claim one child on their individual tax returns.

· Jim, Sally, Tyler and Jamie are all U.S. citizens with valid social security numbers.

10. Jim and Sally can both file as Head of Household on their individual returns.

Interview Notes

· Jim and Sally are not married. They lived together all year.

· Sally had $5,000 in earned income during 2014. Jim earned $30,000 in wages.

· Jim and Sally have two children. Tyler is 10 years old, and Jamie is 8.

· Tyler and Jamie lived with Jim and Sally for all of 2014.

· Tyler and Jamie did not provide over half of their own support.

· Jim paid all the rent, utilities, groceries, and other household expenses, which totaled $16,000. Sally paid none of the household expenses.

· Jim and Sally agreed they would each claim one child on their individual tax returns.

· Jim, Sally, Tyler and Jamie are all U.S. citizens with valid social security numbers.

11. Who can claim the earned income credit?

A.

Scenario 6: Melinda Armstrong

Interview Notes

· Melinda is single and employed as a clerk.

· Melinda earned $47,000 in wages, and had no other income.

· In 2014, she took a computer class at the community college to improve her job skills.

· She has a student account statement showing she paid $900 for tuition.

· She paid $300 for a course book that she ordered from an online bookseller.

· She also paid $50 for a parking permit that was not a requirement of enrollment.

· Melinda does not have enough deductions to itemize.

· Melinda is a U.S. citizen with a valid social security number.

12. Which education credit is Melinda eligible to take?

B.

Interview Notes

· Melinda is single and employed as a clerk.

· Melinda earned $47,000 in wages, and had no other income.

· In 2014, she took a computer class at the community college to improve her job skills.

· She has a student account statement showing she paid $900 for tuition.

· She paid $300 for a course book that she ordered from an online bookseller.

· She also paid $50 for a parking permit that was not a requirement of enrollment.

· Melinda does not have enough deductions to itemize.

· Melinda is a U.S. citizen with a valid social security number.

13. Which of the following are Melinda’s qualified educational expenses for the lifetime learning credit?

D

Scenario 7: Warren and Shirley Graves

14. Warren has an Identity Protection PIN. How does this affect his return preparation?

B..

15. What is the correct amount of taxable interest shown on the Graves' Form 1040, line 8a?

A.

16. Is the Graves' social security income taxable?

B.

17. Both Warren and Shirley are over 65. How does that affect their tax return?

B

18. Warren and Shirley want to avoid having a balance due next year. Shirley can submit a Form W4-P to have tax withheld on her pension.

Scenario 8: Teresa Martin

19. Which allowable filing status is most advantageous to Teresa?

D

20. Since Zack is disabled and meets the other tests, he is Teresa’s qualifying child for which of the following benefits?

C

21. What is the total federal income tax withholding for Teresa's tax return? $_______.

(Do not enter dollar signs, commas, periods, or decimal points in your answer.)

22. What is the credit for child and dependent care expenses on Form 2441, line 11?

C.

23. Who can Teresa claim as qualifying child(ren) for the child tax creditin 2014?

C

24. What is the amount of additional tax on the distribution from Teresa's 401(k), shown in the Other Taxes section of Form 1040?

B.

Scenario 9: Evan James Swift

25. What is Evan’s total tax deduction on Schedule A, line 9?

B.

26. What is Evan's total deduction for charitable contributions on Schedule A, line 19?

D.

27. Can Evan claim Head of Household filing status?

B.

28. To compute the American opportunity credit, which of Noah’s expenses qualify?

C.

29. Does Evan qualify for the retirement savings contributions credit?

30. What is the amount of Evan's student loan interest deduction from Form 1040, page 1? $________.

(Do not enter dollar signs, commas, periods, or decimal points in your answer.)