Income tax | Accounting homework help

 

John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2020, John worked as a computer technician at a local university earning a salary of $152,000, and Sandy worked part time as a receptionist for a law firm earning a salary of $29,000. John also does some Web design work on the side and reported revenues of $4,000 and associated expenses of $750. The Fergusons received $800 in qualified dividends and a $200 refund of their state income taxes. The Fergusons always itemize their deductions, and their itemized deductions were well over the standard deduction amount last year. The Fergusons had qualifying insurance for purposes of the Affordable Care Act (ACA). Use Exhibit 8-9, Tax Rate Schedule, Dividends and Capital Gains Tax Rates2020 AMT exemption for reference.

The Fergusons reported making the following payments during the year:

  • State income taxes of $4,400. Federal tax withholding of $21,000.
  • Alimony payments to John’s former wife of $10,000 (divorced on 12/31/2014).
  • Child support payments for John’s child with his former wife of $4,100.
  • $12,200 of real property taxes.
  • Sandy was reimbursed $600 for employee business expenses she incurred. She was required to provide documentation for her expenses to her employer.
  • $3,600 to Kid Care day care center for Samantha’s care while John and Sandy worked.
  • $14,000 interest on their home mortgage ($400,000 acquisition debt).
  • $3,000 interest on a $40,000 home-equity loan. They used the loan to pay for a family vacation and new car.
  • $15,000 cash charitable contributions to qualified charities.
  • Donation of used furniture to Goodwill. The furniture had a fair market value of $400 and cost $2,000.

Complete pages 1 and 2, Schedule 1, Schedule 2, and Schedule 3 of Form 1040 and Form 6251 for John and Sandy.

John and Sandy Ferguson’s address is 19010 N.W. 135th Street, Miami, FL 33054.

Social security numbers:

John (DOB 11/07/1970): 111-11-1111      

Sandy (DOB 6/24/1972): 222-22-2222

Samantha (DOB 9/30/2016): 333-33-3333

Alimony recipient: 555-55-5555

(Input all the values as positive numbers. Round your intermediate calculations and final answers to the nearest whole dollar. Use 2020 tax rules regardless of year on tax form.)

rev: 10_17_2020_QC_CS-236335

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