Problem
Tax return preparation
Jack and Jill chambers, ages 45 and 43, are married and live at 6584 Beltem Drive, Laurel, MD 20707. Jack's social Security number is 111-11-1111 and Jill's 222-22-2222. The Chambers have two children: Jon (age 23) and Don (age 19). Their Social security are 333-33-3333 and 444-44-4444, respectively. Jon is a single college student and earned $8,000 during the summer. Jack and Jill help Jon through school by paying for his room, board, and tuition. Jon lives at home during the summer. Don lives at home and attends a local university. He earned $4,000 working for a marketing firm. In sum, Jack and Jill provide more than 50% of both Jon's and Don's total support for the year.
Jack is a commercial pilot for a small airline. His salary is $98,000, from which $21,000 of federal income tax and $9,000 of state income tax were withheld. Jack also pays premiums for health, disability, and life insurance. The family had health insurance for whole year. $3,000 of the premium was for health insurance, $350 for disability, and $500 for life insurance. The family had health insurance for whole year.
Jill owns Alliance Networks, a proprietorship that does network consulting.
During the year, Jill's gross revenues were $29,800. She incurred the following expenses in her business:
Liability insurance $975
Software rental $5,400
Journals and magazine $150
Training seminars $1,800
Supplies $1,300
Donations to a political campaign fund $1,000
Jack enjoys playing guitar and plays in a band. Jack's band has developed a local following. This year, his gross revenues were $1,200 for playing shows and $7,00 on CD sales. He incurred the following expenses:
Studio rent expenses $1,300
Sound system repairs $200
CD production $500
New guitar and amplifier $800
Instruction
Prepare Jack and Jill's tax return form 1040 and schedule A, B, C, D and SE for the current year. You are the tax preparer, so enter your first name and last name as well as date on the page 2 of form 1040. In addition, indicate the version completing on the required title page for the final exam.