© 2020 CCH Incorporated and/or its affiliates. All rights ...

© 2021 CCH Incorporated and/or its affiliates. All rights reserved.

In this scenario, you will practice the following:

Information about the primary taxpayer:

Available documentation:

▪ 1 Social Security Card ▪ 1 Form W-2

▪ Select filing status ▪ Enter Form W-2 information ▪ Enter student loan interest ▪ Complete e-file information

Name: John Hammonds SSN: 101-XX-XXXX (use your company’s EFIN in place of XX-XXXX)

Birthdate: September 25, 1978 Address: 623 Miller Rd, Rome, GA 30165 Primary Telephone: (706) 555-1001 Occupation: Bookkeeper

▪ John is not married and has no children.

▪ John began paying back his student loans this year. He would like to know if he could deduct the $250 he paid in interest.

▪ Received $1,400 for the Economic Impact Payment.

▪ John wants to e-file the return. His PIN is

10001, and he would like to receive a paper check if he gets a refund.

Additional items to note:





▪ 1 Social Security Card ▪ 1 Form W-2 ▪ 1 Form 1099-INT

▪ 1 Form 1095-A

▪ 1 Form 1098-T

Name: James Gant SSN: 102-XX-XXXX (use your company’s EFIN in place of XX-XXXX)

Birthdate: January 11, 1990 Address: 901 Memorial Dr, Rome, GA 30165 Primary Telephone: (706) 555-1002 Occupation: Landscaper

▪ Select filing status ▪ Enter Form W-2 information ▪ Enter interest income ▪ Report health coverage ▪ Enter education credit ▪ Complete e-file information

▪ James is not married and has no children.

▪ In addition to his job, James has interest income he needs to report.

▪ He received health insurance through the Marketplace for the entire year.

▪ James attended college all year and wants to see if he is eligible for an education credit or deduction.

▪ He has not previously claimed the American Opportunity Credit, and he has not completed the first 4 years of post-secondary education before the current year.


▪ James wants to e-file the return. His PIN is 10033, and he would like to receive a paper check if he gets a refund.





Information about the spouse and dependent:


▪ 3 Social Security Cards ▪ 2 Forms W-2 ▪ 1 Form 1099-INT

Name: Richard Johnson SSN: 103-XX-XXXX (use your company’s EFIN in place of XX-XXXX)

Birthdate: April 13, 1987 Address: 38 Country Rd 62, Centre, AL 35960 Primary Telephone: (706) 555-1003 Occupation: Retail

▪ Enter multiple Forms W-2 ▪ Enter interest income ▪ Enter education credits ▪ Enter student loan interest ▪ Report child and dependent care expenses ▪ Claim Earned Income Credit ▪ Complete e-file information

▪ Both taxpayers have a Form W-2, and joint interest income to report.

▪ Karen attended college all year and wants to see if she is eligible for an education credit or deduction. This is her second year in college.

▪ Richard paid $400 in student loan interest.

▪ While the couple worked, Christopher attended Bright Starts Daycare, address 28 Morningside Lane, Centre, AL 35960. The daycare’s EIN is 24-3XXXXXX. They paid $2,540 for dependent care.

▪ The taxpayers want to see if they are eligible for the Earned Income Credit.


▪ The taxpayers opted out of receiving advanced payments of the child tax credit.

▪ The taxpayers want to e-file the return. Richard’s PIN is 10033, and Karen’s is 20001. They want to direct deposit their refund. The account number is 578965542 and the routing number is 062005690.


Spouse Name: Karen Johnson SSN: 403-XX-XXXX (use your company’s EFIN in place of XX-XXXX)

Birthdate: June 6, 1988 Occupation: Cashier

Dependent Name: Christopher Johnson SSN: 613-XX-XXXX (use your company’s EFIN in place of XX-XXXX)

Birthdate: November 2, 2012


▪ 1 Form 1098-T




Information about the dependent:


▪ 2 Social Security Cards ▪ 2 Forms W-2 ▪ 1 Form 1095-A

Name: Robert Stevens SSN: 104-XX-XXXX (use your company’s EFIN in place of XX-XXXX)

Birthdate: June 16, 1976 Address: 816 Ocean Dr Buena Park, CA 90621 Primary Telephone: (741) 555-1004 Occupation: Retail

▪ Enter multiple Forms W-2 ▪ Report health coverage ▪ Determine if taxpayer can claim Earned Income

Credit ▪ Enter advanced payments of the Premium Tax

Credit and Child Tax Credit ▪ Complete e-file information

▪ Robert is not married, and is the sole caregiver of his son, Derek.

▪ He held two jobs during the year. While Robert worked, his mother watched Derek for him. He did not pay her to do so.

▪ No one else could claim Derek for Earned Income Credit, and the credit has never been reduced or disallowed.

▪ Robert and Derek received health care coverage through the Marketplace and received an advanced Premium Tax Credit.

▪ Robert earned around then same amount as last year and there was no loss of job or unemployment.


▪ Robert received advanced payments of the Child Tax Credit in the amount of $1,300.

▪ He would like to e-file the return and his PIN is 10004. If he receives a refund, he would like a paper check. If he owes a balance, he will mail a check.


Dependent Name: Derek Stevens SSN: 402-XX-XXXX (use your company’s EFIN in place of XX-XXXX)

Birthdate: May 5, 2006




Information about the spouse and dependents:


▪ 4 Social Security Cards ▪ 1 Form W-2 ▪ 1 Form 1099NEC

Name: George Langston SSN: 105-XX-XXXX (use your company’s EFIN in place of XX-XXXX)

Birthdate: March 12, 1975 Address: 99 Briarwood Cir, Rome, GA 30165 Primary Telephone: (706) 555-1005 Occupation: Construction

▪ Enter Form W-2 data ▪ Enter interest income ▪ Report self-employment income ▪ Claim Earned Income Credit ▪ Report dependent care expenses ▪ Complete e-file information ▪ Calculate Qualified Business Income Deduction


▪ In addition to their wages, the taxpayers received interest income from their savings account.

▪ George’s income is considered self-employment and is subject to SE Tax.

▪ Schedule C Income qualifies for Qualified Business Income Deduction.

▪ No one else could claim their twins for Earned Income Credit, and the credit has never been reduced or disallowed.

▪ While the couple worked, the girls attended The Sunshine School, address 21 Montessori Cir, Cave Springs, GA 30124. The EIN is 34-9XXXXXX. They paid $1,400 per child.


▪ The taxpayers received $4,000 in advanced payments of the Child Tax Credit.

▪ They would like to e-file the return. His PIN is 10005 and Sandra’s is 20005. If they receive a refund, they would like a paper check.

Spouse Name: Sandra Langston SSN: 403-XX-XXXX (use your company’s EFIN in place of XX-XXXX) Birthdate: September 27, 1980 Occupation: Legal Aid

Dependent Names: Elizabeth and Brittany Langston SSNs: 445-XX-XXXX and 446-XX-XXXX (use your company’s EFIN in place of XX-XXXX) Birthdate: December 20, 2006(twins)

Business Expenses:

Advertising: $300 Insurance: $1,200 Office Exp $654 Repairs: $798 Utilities: $1,250


▪ 1 Form 1099-INT




Information about the dependents:


▪ 3 Social Security Cards ▪ 1 Form W-2

Name: Jane Williams SSN: 106-XX-XXXX (use your company’s EFIN in place of XX-XXXX)

Birthdate: July 19, 1981 Address: 18 Prado Way, Claxton, GA 30417 Primary Telephone: (706) 555-4455 Occupation: Retail

▪ Enter Form W-2 data ▪ Claim Earned Income Credit ▪ Claim Additional Child Tax Credit ▪ Complete e-file information


▪ No one else helps Jane care for her children or could claim them as dependents.


▪ Jane opted out of receiving advanced payments of the Child Tax Credit.

▪ Jane earned around then same amount as last year and there was no loss of job or unemployment.

▪ If she is due a refund, Jane would like a paper check. Her PIN is 10006.

Dependent 1 Name: Wesley Williams SSN: 447-XX-XXXX (use your company’s EFIN in place of XX-XXXX)

Birthdate: July 7, 2004

Dependent 2 Name: Jamie Williams SSN: 448-XX-XXXX (use your company’s EFIN in place of XX-XXXX) Birthdate: November 5, 2008





▪ 1 Social Security Card ▪ 1 Form 1099-DIV ▪ 1 Form 1099-INT

Name: Jessica McDaniel SSN: 107-XX-XXXX (use your company’s EFIN in place of XX-XXXX)

Birthdate: March 12, 1995 Address: 1698 Ridge Dr, Lindale, GA 30147 Primary Telephone: (706) 555-4566 Occupation: Student

▪ Determine correct filing status ▪ Enter interest and dividend income ▪ Complete e-file information

Complete e-file information


▪ Jessica and Seth live with Jessica’s mother, who pays all the household bills and helps take care of Seth while Jessica attends college.

▪ Jessica’s mother is claiming both Jessica and Seth, but Jessica would like to receive a refund for the taxes she did pay.

▪ Though she did not work, Jessica received interest and dividend income throughout the year.

▪ Jessica did not receive the Economic Impact Payment or advanced payments of the Child Tax Credit.

▪ Jessica would like to e-file the return. Her PIN is 10007. If she receives a refund, she would like a paper check.






▪ 2 Social Security Cards ▪ 2 Forms W-2

Name: Julia Holmes SSN: 108-XX-XXXX (use your company’s EFIN in place of XX-XXXX)

Birthdate: September 28, 1984 Address: 18 Green St, Silver Creek, GA 30173 Primary Telephone: (706) 555-0544 Occupation: Administrative Assistant

▪ Enter multiple Forms W-2 ▪ Claim Earned Income Credit ▪ Complete e-file information

▪ Julia lives alone with her daughter, Annie.

▪ Julia covers herself and Annie on her insurance through work.

▪ No one else could claim Annie for Earned Income Credit, and the credit has never been reduced or disallowed.


▪ Julia received advanced payments of the Child Tax Credit in the amount of $1,300.

▪ Taxpayer earned around then same amount as last year and there was no loss of job or unemployment.

▪ Julia would like to e-file the return. Her PIN is 10008. She would like a paper check.


Dependent Name: Annie Holmes SSN: 618-XX-XXXX (use your company’s EFIN in place of XX-XXXX) Birthdate: October 10, 2010




Information about the spouse:


▪ 2 Social Security Cards ▪ 1 Form W-2

Name: Jeff Stark SSN: 109-XX-XXXX (use your company’s EFIN in place of XX-XXXX)

Birthdate: February 28, 1982 Address: 23 Marsh Creek, Centre, AL 35960 Primary Telephone: (706) 555-0147 Occupation: Manager

▪ Enter Form W-2 income ▪ Complete e-file information


▪ Jill and Jeff are married with no children.

▪ They would like to e-file the return. Jeff’s PIN is 10009, and Jill’s is 20009.

▪ Received $2,800 for the Economic Impact

Payment.

▪ If the couple receives a refund, they would like a paper check. If they owe, they will send a check.

Spouse Name: Jill Stark SSN: 409-XX-XXXX (use your company’s EFIN in place of XX-XXXX) Birthdate: August 2, 1983






▪ 2 Social Security Cards ▪ 1 Form W-2 ▪ 1 Form 1099-DIV

Name: Karen Barnes SSN: 110-XX-XXXX (use your company’s EFIN in place of XX-XXXX)

Birthdate: January 20, 1987 Address: 30 Marshall Ave, Rome, GA 30165 Primary Telephone: (706) 555-0404 Occupation: Part-time medical assistant

▪ Enter Form W-2 income ▪ Enter dividend income ▪ Report child and dependent care expenses ▪ Claim Earned Income Credit ▪ Complete e-file information


▪ Karen is a single parent to Nicholas, and does not receive any assistance caring for him.

▪ In addition to her job, Karen received dividend income.

▪ She paid a nanny $3,100 to take care of Nicholas after school every day until she got home from work. The nanny’s name is Theresa Simpson, SSN 449-XX-XXXX and her address is 91 West 52nd St, Rome, GA 30161.

▪ Received $2,800 for the Economic Impact Payment and received $1,200 in advanced payments of the Child Tax Credit.

▪ Taxpayer earned around then same amount as last year and there was no loss of job or unemployment.

▪ Karen would like to e-file the return. Her PIN is 10010.

Dependent Name: Nicholas Barnes SSN: 610-XX-XXXX (use your company’s EFIN in place of XX-XXXX) Birthdate: September 4, 2007

1040 Individual Returns Answer Key*

*These returns were completed using a current release of the software as of 02/01/2022. Updates may cause

your answers to differ, so we will periodically update to account for new calculations.

For questions, please email the Training Department at [email protected].

Scenario AGI Taxable Income Total Tax Refund/Balance Due

101 38,271 25,721 2,888 1,056

102 24,002 11,452 0 4,211

103 38,182 13,082 93 10,008

104 41,683 22,883 2,461 3,808

105 34,783 7,746 2,614 6,651

106 21,751 2,951 296 15,754

107 1,277 177 19 112

108 37,158 18,358 1,921 4,062

109 42,610 17,510 1,753 348

110 26,634 7,834 783 7,619


201 17,421 0 0 11,730

202 33,326 6,744 1,633 470

203 16,924 0 0 7,330

204* 20,027 0 0 7,094

205 43,912 18,812 1,883 6,480

206 12,639 0 0 6,010

207 28,550 7,800 5,131 950

208* 11,442 0 0 0

209 56,752 37,952 2,273 10,041

210 26,845 1,745 174 16,413


301 38,322 13,222 1,195 3,044

302 14,875 0 1,730 5,656

303 40,611 14,161 1,418 7,842

304 8,373 0 1,307 5

305* 21,269 1,975 199 3,201

306 54,945 29,845 3,154 12,525

307 17,532 3,282 328 3,658

308 5,421 0 827 2,103

309 2,471 0 0 315

310 43,525 17,075 1,663 2,397

*Due to Rounding Differences for Depreciation , these answers may differ slightly.

mailto:[email protected]

© 2020 CCH Incorporated and/or its affiliates. All rights ...

Documents

Transcript of © 2020 CCH Incorporated and/or its affiliates. All rights ...