Use the following information to complete Karl and Ellie Fredericksonâ€™s 2012 federal income tax return.If information is missing, use reasonable assumptions to fill in the gaps.
You may need the following forms to complete the project: Form 1040 and Schedule A. The forms, schedules, and instructions can be found at the IRS website (irs.gov) the instructions can be helpful in completing the forms.
Karl Frederickson is employed as a human resource manager for Toys Unlimited Inc. and Ellie is a financial planner for her motherâ€™s company, Fredericksons Investments, Inc. , a full service wealth planning firm.They provide the following information:
They both want to contribute to the presidential election campaign
They live at 9876 Fighting Irish Lane, South Bend. IN
Karls Birthday is XXXXX and his Social Security Number is XXXXX
Ellieâ€™s Birthday is XXXXX and her social security number is XXXXX
Karl or Ellie do not have any foreign bank accounts or trust.
Karl received a Form W-2 from Toys Unlimited Inc., which contained the following information:
Line 1 Wages, tips, other compensation 45,000
Line 2 Federal income tax withheld7,000
Line 3 Social Security Wages45,000
Line 4 Social Security tax withheld1,890
Line 5 Medicare wages and tips45,000
Line 6 Medicare tax withheld653
Line 17 State Income Tax2,200
Ellie received a Form W-2 from Fredericks Investments Inc. that contained the following information
Line 1 Wages, tips, other compensation 85,000
Line 2 Federal income tax withheld12,500
Line 3 Social Security Wages85,000
Line 4 Social Security tax withheld3,570
Line 5 Medicare wages and tips85,000
Line 6 Medicare tax withheld1,233
Line 17 State Income Tax4,200
Karl and Ellie incurred the following medical expenses for the year:
Transportation to Chicago for Karlâ€™s cancer treatment2,000 miles
Unreimbursed hospital charges for Karl6,500
Unreimbursed prescription drugs charges for Karl and Ellie1,750
Unreimbursed physician charges for Karl and Ellie2,200
Laser hair treatment for Ellie(so that she will no longer have to shave2,000
Unreimbursed prescription glasses for Ellie150
Karl and Ellie paid 12,000 of interest payments on their primary residence (acquisition debt of 225,000). They also paid 1,750 of interest expense on Ellieâ€™s car loan and 500 of interest on their Visa card.
Karl and Ellie paid 4,000 of real estate taxes on their home and 1,000 of real estate tax on a vacant lot they purchased with hope of building their dream home in the future.They also paid 3,000 in sales tax on Ellieâ€™s car and other purchases of 1,000 of ad valoreum tax on their cars.
Karl and Ellie make the following contributions this year:
American Red Cross200
St Josephâ€™s Catholic Church8,000
Food for the family of Hannah Barbara225
(A neighbor who suffered a tragic car accident this past year)
Stock transfer to the University of Notre Dame750
(Originally purchased for 1,000 in 2005)
Karl incurred 4,000 of unreimbursed meals and entertainment related to his job.Ellie incurred 1,200 of expenses for investment publications, and last year they paid their CPA 500 to prepare their tax return.
The roof on Karl and Ellieâ€™s house was severely damaged in a hail storm.They had to replace the roof (7,500), which unfortunately was not covered by insurance because of their high deductible (10,000).
Karl won 5,000 in the state lottery.He has been playing the lottery for years (10 in lottery tickets every week (520 in total) that he saves to keep track of the numbers he plays)