Instructions: Please complete the required federal individual income tax return forms for Bob and Melissa Grant for the 2013 tax year. Ignore the requirement to attach the form(s) W-2 to the front page of the Form 1040. If required information is missing, use reasonable assumptions to fill in the gaps.
Bob (age 43) and Melissa Grant (age 43) are married and live in Lexington, Kentucky. The Grants have two children Jared, age 15, and Alese, age 12. The Grants would like to file a joint tax return for the year.
The following information relates to the GrantsAc€?c tax year:
BobAc€?cs Social Security number is 987-45-1234
MelissaAc€?cs Social Security number is 494-37-4893
JaredAc€?cs Social Security number is 412-32-5690
AleseAc€?cs Social Security number is 412-32-6940
The GrantsAc€?c mailing address is 95 Hickory Road, Lexington, Kentucky 40502.
Jared and Alese are tax dependents for federal tax purposes
Bob Grant received the following during the year:
Employer Gross Wages Federal Income Tax State Income Tax
Withholding Withholding
National Storage $66,200 $8,000 $3,750
Lexington Little League$2,710 0 0
Melissa Grant received the following during the year:
Employer Gross Wages Federal Income Tax State Income Tax
Withholding Withholding
Jensen Photography $24,500 $2,450 $1,225
All applicable and appropriate payroll taxes were withheld by GrantsAc€?c respective employers.
The Grants also received the following during the year:
Interest income from First Kentucky Bank $130
Interest income from City of Lexington, KY Bond $450
Interest income from U. S. Treasury Bond $675
Interest income from Nevada State School Board Bond $150
WorkersAc€?c compensation payments to Bob $4,350
Disability payments received by Bob on account of injury $3,500
National Storage paid 100% of the premiums on the policy and included the premium payments in BobAc€?cs taxable wages
Receipt of payment by Melissa as a result of a lawsuit for damages sustained in a car accident:
Medical Expenses $2,500
Emotional Distress $12,000
Punitive Damages $10,000
Total $24,500
Eight years ago, Melissa purchased an annuity contract for $88,000. She received her first annuity payment on January 1, 2013. The annuity will pay Melissa $15,000 per year for ten years (beginning with this year). The $15,000 payment was reported to Melissa on Form 1099-R for the current year (box 7 contained an entry of Ac€A?7Ac€?? on the form).
The Grants did not own, control or manage any foreign bank accounts nor were they a grantor or beneficiary of a foreign trust during the tax year.
The Grants paid or incurred the following expenses during the year:
Dentist/Orthodontist (unreimbursed by insurance) $10,500
Doctors (unreimbursed by insurance) $ 625
Prescriptions (unreimbursed by insurance) $380
KY state tax payment made on 4/15/13 for 2012 liability $ 1,350
Real property taxes on residence $ 1,800
Vehicle registration fee based upon age of vehicle $ 250
Mortgage interest on principal residence $ 8,560
Interest paid on borrowed money to purchase the City of
Lexington, KY municipal bonds $ 400
Interest paid on borrowed money to purchase
U. S. Treasury bonds $ 240
Contribution to the Red Cross $ 1,000
Contribution to Senator Rick HartleyAc€?cs Re-election Campaign $ 2,500
Contribution to First Baptist Church of Kentucky $ 6,000
Fee paid to Jones & Company, CPAs for tax preparation $ 200
In addition, Bob drove 6,750 miles commuting to work and Melissa drove 8,230 miles commuting to work. The Grants have represented to you that they maintained careful logs to support their respective mileage.
The Grants drove 465 miles in total to receive medical treatment at a hospital in April.
During the year, the GrantsAc€?c personal residence was burglarized on October 1. The theft occurred during the day while both the Grants were at work and their children were at school. The Grants had the following personal property stolen:
Item
Purchase Date Fair Value on Tax Basis Insurance Laptop computer
Date of Theft of Item Reimbursement and Printer
Received
09/01/2013 3,000 3,00 500 Rifle
03/01/2011 2,000 2,500 500 TV/Projector
03/01/2011 5,000 13,000 1,000 2006 Honda Pilot
07/01/2012 4,000 6,500 500
Total 14,000 25,000 2,500
The Grants want to contribute to the Presidential Election Campaign. The Grants would like to receive a refund (if any) of any tax they may have overpaid for the year.