Question: Obtain a copy of the most recent year's Form 1040 (U.S. Individual Income Tax Return), along with Schedules A (Itemized Deductions), B (Interest and Dividend Income), and D (Capital Gains and Losses) and instructions for preparing the return. Use your actual (or forecast) data to prepare your return for the most recent year. If you earn no or very low income, use data provided by a family member.
a. Discuss the exemptions claimed and their effect on taxable income.
b. Study Schedule A and discuss how each of the following is treated:
1. Medical and dental expenses
2. Mortgage interest
3. Job expenses
c. Discuss the key factor affecting whether to itemize deductions or take the standard deduction.
d. Describe how the total tax was calculated. What top tax bracket applied?
e. What, if any, recommendation would you give with regard to actions that might be advantageous from a tax standpoint?