Question:
Use the subsequent information to complete Paul and Judy Vance's 2011 federal income tax return. If information is missing, use logical assumptions to fill in the gaps.
You may need the subsequent forms and schedules to complete the project: Form 1040, Schedule A, Schedule B, Schedule C, Schedule D, Schedule E, Schedule SE, Form 2106-EZ, Form 4562 (for the dental practice), Form 4562 (for the rental property), Form 4797, and Form 8863. The forms, schedules, and instructions can be found at the IRS Web site. The instructions can be helpful in completing the forms.
Facts:
Paul J. and Judy L. Vance are married and file a joint return. Paul is self-employed as a dentist, and Judy is a college professor. Judy and Paul have three children. The oldest is Vince who lives at home. Vince is a law student at the University of Cincinnati and worked part-time during the year, earning $1,500, which he spent for his own support. Judy and Paul provided $6,000 toward Vince's support (counting $4,000 for Vince's fall tuition). They also provided over half the support of their daughter, Joan, who is a full-time student at Edgecliff College in Cincinnati. Joan worked part-time as an independent contractor throughout the year, earning $3,200. Joan lived at home until she was married in December 2011. She filed a joint return with her husband, Patrick, who earned $20,000 during the year. Jennifer is the youngest and lived in the Vances' home for the entire year. The Vances provide you with the subsequent additional information:
Paul and Judy could like to take advantage on their return of any educational expenses paid for their children.
The Vances do not want to contribute to the presidential election campaign.
The Vances live at 621 Franklin Avenue, Cincinnati, OH 45211.
Paul's birthday is 3/5/1957 and his Social Security number is 333-45-6666.
Judy's birthday is 4/24/1960 and her Social Security number is 566-77-8888.
Vince's birthday is 11/6/1988 and his Social Security number is 576-18-7928.
Joan's birthday is 2/1/1992 and her Social Security number is 575-92-4321.
Jennifer's birthday is 12/12/1999 and her Social Security number is 613-97-8465.
The Vances do not have any foreign bank accounts or trusts.
Judy is a lecturer at Xavier University in Cincinnati, where she earned $30,000. The university withheld federal income tax of $3,375, state income tax of $900, Cincinnati city income tax of $375, $1,260 of Social Security tax and $435 of Medicare tax. She also worked part of the year for Delta Airlines. Delta paid her $10,000 in salary, and withheld federal income tax of $1,125, state income tax of $300, Cincinnati city income tax of $125, Social Security tax of $420, and Medicare tax of $145.
The Vances received $800 of interest from State Savings Bank on a joint account. They received interest of $1,000 on City of Cincinnati bonds they bought in January with the proceeds of a loan from Third National Bank of Cincinnati. They paid interest of $1,100 on the loan. Paul received a dividend of $540 on General Bicycle Corporation stock he owns. Judy received a dividend of $390 on Acme Clothing Corporation stock she owns. Judy and Paul received a dividend of $865 on jointly owned stock in Maple Company. All of the dividends received in 2011 are qualified dividends.
Paul practices under the name "Paul J. Vance, DDS." His business is located at 645 West Avenue, Cincinnati, OH 45211, and his employer identification number is 01-2222222. Paul's gross receipts throughout the year were $111,000. Paul uses the cash method of accounting for his business. Paul's business expenses are as follows:
Advertising $1,200
Professional dues 490
Professional journals 360
Contributions to employee benefit plans 2,000
Malpractice insurance 3,200
Fine for overbilling State of Ohio for work performed on welfare patient 5,000
Insurance on office contents 720
Interest on money borrowed to refurbish office 600
Accounting services 2,100
Miscellaneous office expense 388
Office rent 12,000
Dental supplies 7,672
Utilities and telephone 3,360
Wages 30,000
Payroll taxes 2,400
Accounting