Jayne Johnson (SSN# 123-44-5555) lives at 5245 Delhi Drive, Indianapolis, IN 46239.
Jayne, a single taxpayer, born April 1, 1947 provided 100% of her mother's support. Her mother lives in an assisted living facility in Tucson, Arizona and has no income.. She does not want to take advantage of the presidential election campaign check-off. Jayne is a retired automobile factory engineer who works as a part time consultant for Mackenzie Associates based on the book she wrote.
Her W-2 from Mackenzie showed:
Salary from Mackenzie $106,000 with a 401(k) contribution of $23,000, for net salary subject to income tax of $83,000. Indiana Income Tax Withheld: $5,000, and Federal Income Tax Withheld of $21,000.
During 2013, Jayne received the following:
Twelve monthly annuity payments of $4,000 per month on an annuity that she purchased from Statute Mutual Insurance Company for $500,000 in December, 2012. The annuity started in January, 2013
Social Security benefits that totaled $24,000
A portfolio of stock and bonds in settlement of her brother's estate. The portfolio had a Fair Market Value of $125,000. Her brother passed away early in 2013, and the Estate was settled on December 23, 2013.
$120,000 from a life insurance policy upon her brother's death. She was the sole beneficiary on the policy. Her brother paid all the premiums on the policy.
Interest Income from the Autoworkers Credit Union of $3,800
Dividends of $1450 of which $900 are qualified dividends from US corporations
Interest on City of Indianapolis General Obligation Bonds of $4,500
Royalties of $30,000 from her book, "I Lost my Job to Robots", written in 2011.
During November 2013: Jayne negotiated with her publisher for an advance of $50,000 on her new proposed book, "You Will Lose Your Job to a 3-D Printer". The advance was based on a manuscript she showed the publisher. The advance will be paid in January, 2014 with a promise that the book will be ready for publishing in September, 2014.
During 2013, Jayne paid the following:
IRA Contribution $5,000
Real Estate Taxes* $1,500
Charitable Contributions* $6,000
Home Mortgage Interest* $3,200
Indiana Income tax Estimated Tax Payment* of $5,200, paid in equal installments.
Estimated Federal Tax Payment of $8,000 paid in equal quarterly installments.
*Assume the expenditures marked with an asterisk are deductible on Schedule A as itemized deductions.
Prepare Jayne's 2013 US Federal Income Tax Return, Form 1040