1. Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social  Security numbers are 123-45-6784 and 111-11-1113, respectively. Alice’s birthday is  September 21, 1974, and Bruce’s is June 27, 1973. They live at 473 Revere Avenue,  Lowell, MA 01850. Alice is the office manager for Lowell Dental Clinic, 433 Broad  Street, Lowell, MA 01850 (Employer Identification Number 98-7654321). Bruce is  the manager of a Super Burgers fast-food outlet owned and operated by Plymouth  Corporation, 1247 Central Avenue, Hauppauge, NY 11788 (Employer Identification  Number 11-1111111).  The following information is shown on their Wage and Tax Statements (Form  W–2) for 2021.  See Image 1 The Byrds provide over half of the support of their two children, Cynthia (born  January 25, 1997, Social Security number 123-45-6788) and John (born February 7,  2001, Social Security number 123-45-6780). Both children are full-time students and  live with the Byrds except when they are away at college. Cynthia earned $6,200  from a summer internship in 2021, and John earned $3,800 from a part-time job.  Both children received scholarships covering tuition and materials.  During 2021, the Byrds provided 60% of the total support of Bruce’s widower  father, Sam Byrd (born March 6, 1945, Social Security number 123-45-6787). Sam  lived alone and covered the rest of his support with his Social Security benefits. Sam  died in November, and Bruce, the beneficiary of a policy on Sam’s life, received life  insurance proceeds of $1,600,000 on December 28.  The Byrds had the following expenses relating to their personal residence  during 2021:  See Image 2 Below is a continuation of image 2  • Bruce paid $400 for an annual subscription to the Journal of Franchise Management and $741 for annual membership dues to his professional association.  • Neither Alice’s nor Bruce’s employer reimburses for employee expenses.  • The Byrds do not keep the receipts for the sales taxes they paid and had no major  purchases subject to sales tax.  • This year, the Byrds gave each of their children $2,000, which was then deposited  into their Roth IRAs.  • Alice and Bruce paid no estimated Federal income tax, and they did not engage  in any virtual currency transactions during the year. Neither Alice nor Bruce wants  to designate $3 to the Presidential Election Campaign Fund. The Byrds received  the appropriate recovery rebates (economic impact payments); related questions  in ProConnect Tax should be ignored.  Part 1—Tax Computation  Compute net tax payable or refund due for Alice and Bruce Byrd for 2021, and  complete their 2021 Federal tax return using appropriate forms and schedules. If  they have overpaid their taxes, they want the amount to be refunded to them. Suggested software: ProConnect Tax. Use 1040 and Schedule A and B

SWFT Individual Income Taxes
43rd Edition
ISBN:9780357391365
Author:YOUNG
Publisher:YOUNG
Chapter13: Tax Credits And Payment Procedures
Section: Chapter Questions
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41. Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social  Security numbers are 123-45-6784 and 111-11-1113, respectively. Alice’s birthday is  September 21, 1974, and Bruce’s is June 27, 1973. They live at 473 Revere Avenue,  Lowell, MA 01850. Alice is the office manager for Lowell Dental Clinic, 433 Broad  Street, Lowell, MA 01850 (Employer Identification Number 98-7654321). Bruce is  the manager of a Super Burgers fast-food outlet owned and operated by Plymouth  Corporation, 1247 Central Avenue, Hauppauge, NY 11788 (Employer Identification  Number 11-1111111).  The following information is shown on their Wage and Tax Statements (Form  W–2) for 2021. 

See Image 1

The Byrds provide over half of the support of their two children, Cynthia (born  January 25, 1997, Social Security number 123-45-6788) and John (born February 7,  2001, Social Security number 123-45-6780). Both children are full-time students and  live with the Byrds except when they are away at college. Cynthia earned $6,200  from a summer internship in 2021, and John earned $3,800 from a part-time job.  Both children received scholarships covering tuition and materials.  During 2021, the Byrds provided 60% of the total support of Bruce’s widower  father, Sam Byrd (born March 6, 1945, Social Security number 123-45-6787). Sam  lived alone and covered the rest of his support with his Social Security benefits. Sam  died in November, and Bruce, the beneficiary of a policy on Sam’s life, received life  insurance proceeds of $1,600,000 on December 28.  The Byrds had the following expenses relating to their personal residence  during 2021: 

See Image 2

Below is a continuation of image 2 

• Bruce paid $400 for an annual subscription to the Journal of Franchise Management and $741 for annual membership dues to his professional association.

 • Neither Alice’s nor Bruce’s employer reimburses for employee expenses.

 • The Byrds do not keep the receipts for the sales taxes they paid and had no major  purchases subject to sales tax.

 • This year, the Byrds gave each of their children $2,000, which was then deposited  into their Roth IRAs.

 • Alice and Bruce paid no estimated Federal income tax, and they did not engage  in any virtual currency transactions during the year. Neither Alice nor Bruce wants  to designate $3 to the Presidential Election Campaign Fund. The Byrds received  the appropriate recovery rebates (economic impact payments); related questions  in ProConnect Tax should be ignored.

 Part 1—Tax Computation  Compute net tax payable or refund due for Alice and Bruce Byrd for 2021, and  complete their 2021 Federal tax return using appropriate forms and schedules. If  they have overpaid their taxes, they want the amount to be refunded to them. Suggested software: ProConnect Tax. Use 1040 and Schedule A and B

 

The Byrds provide over half of the support of their two children, Cynthia (born
January 25, 1997, Social Security number 123-45-6788) and John (born February 7,
2001, Social Security number 123-45-6780). Both children are full-time students and
live with the Byrds except when they are away at college. Cynthia earned $6,200
from a summer internship in 2021, and John earned $3,800 from a part-time job.
Both children received scholarships covering tuition and materials.
During 2021, the Byrds provided 60% of the total support of Bruce's widower
father, Sam Byrd (born March 6, 1945, Social Security number 123-45-6787). Sam
lived alone and covered the rest of his support with his Social Security benefits. Sam
died in November, and Bruce, the beneficiary of a policy on Sam's life, received life
insurance proceeds of $1,600,000 on December 28.
The Byrds had the following expenses relating to their personal residence
during 2021:
Property taxes
Qualified interest on home mortgage (acquisition indebtedness)
Repairs to roof
Utilities
Fire and theft insurance
The Byrds had the following medical expenses for 2021:
Medical insurance premiums
Doctor bill for Sam incurred in 2020 and not paid until 2021
Operation for Sam
Prescription medicines for Sam
Hospital expenses for Sam
Reimbursement from insurance company, received in 2021
$5,000
8,700
5,750
4,100
1,900
$4,500
7,600
8,500
900
3,500
3,600
The medical expenses for Sam represent most of the 60% that Bruce contributed
toward his father's support.
Other relevant information follows:
• When they filed their 2020 state return in 2021, the Byrds paid additional state
income tax of $900.
• During 2021, Alice and Bruce attended a dinner dance sponsored by the Lowell
Police Disability Association (a qualified charitable organization). The Byrds
paid $300 for the tickets. The cost of comparable entertainment would normally
be $50.
• The Byrds contributed $5,000 to Lowell Presbyterian Church and gave used
clothing (cost of $1,200 and fair market value of $350) to the Salvation Army. All
donations are supported by receipts, and the clothing is in very good condition.
• Via a crowdfunding site (gofundme.com), Alice and Bruce made a gift to a needy
family who lost their home in a fire ($400). In addition, they made several cash
gifts to homeless individuals downtown (estimated to be $65).
• In 2021, the Byrds received interest income of $2,750, which was reported on a
Form 1099-INT from Second National Bank, 125 Oak Street, Lowell, MA 01850
(Employer Identification Number 98-7654322).
• The home mortgage interest was reported on Form 1098 by Lowell Commercial
Bank, P.O. Box 1000, Lowell, MA 01850 (Employer Identification Number
98-7654323). The mortgage (outstanding balance of $425,000 as of January 1,
2021) was taken out by the Byrds on May 1, 2017.
• Alice's employer requires that all employees wear uniforms to work. During 2021,
Alice spent $850 on new uniforms and $566 on laundry charges.
Transcribed Image Text:The Byrds provide over half of the support of their two children, Cynthia (born January 25, 1997, Social Security number 123-45-6788) and John (born February 7, 2001, Social Security number 123-45-6780). Both children are full-time students and live with the Byrds except when they are away at college. Cynthia earned $6,200 from a summer internship in 2021, and John earned $3,800 from a part-time job. Both children received scholarships covering tuition and materials. During 2021, the Byrds provided 60% of the total support of Bruce's widower father, Sam Byrd (born March 6, 1945, Social Security number 123-45-6787). Sam lived alone and covered the rest of his support with his Social Security benefits. Sam died in November, and Bruce, the beneficiary of a policy on Sam's life, received life insurance proceeds of $1,600,000 on December 28. The Byrds had the following expenses relating to their personal residence during 2021: Property taxes Qualified interest on home mortgage (acquisition indebtedness) Repairs to roof Utilities Fire and theft insurance The Byrds had the following medical expenses for 2021: Medical insurance premiums Doctor bill for Sam incurred in 2020 and not paid until 2021 Operation for Sam Prescription medicines for Sam Hospital expenses for Sam Reimbursement from insurance company, received in 2021 $5,000 8,700 5,750 4,100 1,900 $4,500 7,600 8,500 900 3,500 3,600 The medical expenses for Sam represent most of the 60% that Bruce contributed toward his father's support. Other relevant information follows: • When they filed their 2020 state return in 2021, the Byrds paid additional state income tax of $900. • During 2021, Alice and Bruce attended a dinner dance sponsored by the Lowell Police Disability Association (a qualified charitable organization). The Byrds paid $300 for the tickets. The cost of comparable entertainment would normally be $50. • The Byrds contributed $5,000 to Lowell Presbyterian Church and gave used clothing (cost of $1,200 and fair market value of $350) to the Salvation Army. All donations are supported by receipts, and the clothing is in very good condition. • Via a crowdfunding site (gofundme.com), Alice and Bruce made a gift to a needy family who lost their home in a fire ($400). In addition, they made several cash gifts to homeless individuals downtown (estimated to be $65). • In 2021, the Byrds received interest income of $2,750, which was reported on a Form 1099-INT from Second National Bank, 125 Oak Street, Lowell, MA 01850 (Employer Identification Number 98-7654322). • The home mortgage interest was reported on Form 1098 by Lowell Commercial Bank, P.O. Box 1000, Lowell, MA 01850 (Employer Identification Number 98-7654323). The mortgage (outstanding balance of $425,000 as of January 1, 2021) was taken out by the Byrds on May 1, 2017. • Alice's employer requires that all employees wear uniforms to work. During 2021, Alice spent $850 on new uniforms and $566 on laundry charges.
41. Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social
Security numbers are 123-45-6784 and 111-11-1113, respectively. Alice's birthday is
September 21, 1974, and Bruce's is June 27, 1973. They live at 473 Revere Avenue,
Lowell, MA 01850. Alice is the office manager for Lowell Dental Clinic, 433 Broad
Street, Lowell, MA 01850 (Employer Identification Number 98-7654321). Bruce is
the manager of a Super Burgers fast-food outlet owned and operated by Plymouth
Corporation, 1247 Central Avenue, Hauppauge, NY 11788 (Employer Identification
Number 11-1111111).
The following information is shown on their Wage and Tax Statements (Form
W-2) for 2021.
Line
1
2
3
4
5
6
15
16
17
Description
Wages, tips, other compensation
Federal income tax withheld
Social Security wages
Social Security tax withheld
Medicare wages and tips
Medicare tax withheld
State
Alice
Copa
de
"State wages, tips, etc.
State income tax withheld
$58,000
4,500
58,000
3,596
58,000
841
Bruce
$62,100
5,300
62,100
3,850
62,100
900
Massachusetts
Massachusetts
All Rights Reserved. May not be copied, 58,000 or duplicated, in whole or in N
62,100
2,950
3,100
Transcribed Image Text:41. Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social Security numbers are 123-45-6784 and 111-11-1113, respectively. Alice's birthday is September 21, 1974, and Bruce's is June 27, 1973. They live at 473 Revere Avenue, Lowell, MA 01850. Alice is the office manager for Lowell Dental Clinic, 433 Broad Street, Lowell, MA 01850 (Employer Identification Number 98-7654321). Bruce is the manager of a Super Burgers fast-food outlet owned and operated by Plymouth Corporation, 1247 Central Avenue, Hauppauge, NY 11788 (Employer Identification Number 11-1111111). The following information is shown on their Wage and Tax Statements (Form W-2) for 2021. Line 1 2 3 4 5 6 15 16 17 Description Wages, tips, other compensation Federal income tax withheld Social Security wages Social Security tax withheld Medicare wages and tips Medicare tax withheld State Alice Copa de "State wages, tips, etc. State income tax withheld $58,000 4,500 58,000 3,596 58,000 841 Bruce $62,100 5,300 62,100 3,850 62,100 900 Massachusetts Massachusetts All Rights Reserved. May not be copied, 58,000 or duplicated, in whole or in N 62,100 2,950 3,100
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