Tax Scenario
• John and Jamie Smith are both 30 years old and married filing jointly.
• John and Jamie live at 123 Dream St. Seagrove, NC 27341.
• John’s social security number is 123-44-5555
• Jamie’s social security number is 321-55-4444
• John worked full-time and had gross income of $30,000 and $3,000 in federal income taxes withheld.
• Jamie is currently unemployed but did have $4,000 in unemployment compensation from this tax year.
• John’s father, Mark Smith, passed away during the tax year and left John $200,000 in life insurance proceeds and land that is worth $80,000
• Jamie had unnecessary cosmetic surgery that amounted to $3,000. John had dental surgery that amounted to $5,000.
• John and Jamie often donate used clothes and appliances to the local Goodwill. Their donations for the year amounted to $200 fair market value.
• John pays student loans used to complete his Bachelor’s degree. John paid a total of $1,000 in student loan interest this tax year.
• Use the required tax forms (1040 & Schedules) to calculate and document John and Jamie’s tax refund or payment. You can also upload a Word, Excel, or other document to show your calculations. You can omit the Earned Income Tax credit for this scenario. This tax scenario is worth 40 points. Partial credit will be given where applicable.