Business Finance Homework Help

Week 6 Assignment – Assisting a Family With Their Tax Returns

Imagine that you are preparing taxes for a local tax service provider.

Overview

A married couple named Judy and Walter Townson have come to you to seeking assistance with their federal income taxes. During your meeting with the Townsons, you gather the following information:

• They are both 55 years of age.
• They have two daughters and one son.
  • One daughter (age 25) is married with children.
  • One daughter (age 20) is living at home and attending college.
  • Their son (age 16) is a junior in high school.
• They are currently paying for their college-student daughter to attend school full time.
• Judy is employed as a teacher and makes $60,000 a year. She used $500 of her personal funds to purchase books and other supplies for her classroom.
• Walter is employed as a CPA and makes $100,000 a year.
• They provided you a 1099-INT which reported $4,500 in interest, of which $500 was savings bond interest.
• They provided you a 1099-DIV which reported $300 in dividends.
• They received a state tax refund last year of $385.
• They provided you a list of expenses including:
  • Doctor’s bills, $800.
  • Prescriptions, $400.
  • New glasses, $2,000.
  • Dental bills, $560.
  • Braces, $5,000.
  • Property taxes for their two cars of $800, which included $50 in decal fees (tabs).
  • Real estate taxes of $4,500.
  • Mortgage interest of $12,000.
  • Gifts to charities, $1,000.
  • GoFundMe contribution to a local family in need, $100.
  • Tax preparation fees for last year’s taxes, $400.

Instructions

Consider the most beneficial way for Judy and Walter to file their federal income tax return.

Prepare a brief written summary, no more than 500 words that address the following:

• Estimated taxable income for Judy and Walter (please show computations).
• Summary of tax return, including any suggestions or tax planning considerations.
• Explain how you determined the filing status, dependents, and use of standard/itemized deduction.

This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.

The specific course learning outcome associated with this assignment:

• Complete a tax analysis that is informed by tax law and strategies to determine the most beneficial way for a client/family to file their federal income tax return.