Your clients, David and Charlene Thomas, (David is 55 and Charlene is 45) have hired you to complete their 2014 tax return (2014 tax year). They wish to pay the minimum amount of taxes possible in this tax year. Disregard AMT; BUT DO CONSIDER ALL OTHER available credits). Assume they have provided you with copies of all the following information. They reside in Austin, Texas at 555 Lookout Dr., zip 78725. Their SS numbers are 111-11-1111 and 222-22-2222 respectively. They provide 100% of the support for their two adopted children: both of which are both full-time students – Austin, son (age 8) and their daughter is Stephanie (age 24). Their SS numbers are: 555-55-5555 and 333-33-3333, respectively. (All ages as of Dec 31, 2014) Charlene's mother, Hattie Hunter (age 76, widowed) lived with them all year. Her SS number is 666-66-6666. Except for $15,000 which Hattie received in Jan 2014 as an inheritance from her half-brother's estate, she has no other source of income (assume she does NOT qualify for social security/medicare). Hattie spent ALL $15,000 of her inherited money on her own education during 2014. Originally just 6 hours short of a degree, Hallie just finished her bachelor's degree at a private university in Dec 2014, and hopes to dedicate the rest of her life as a volunteer at a local children's home. Assume the taxpayer's paid over half of Hattie's total support. Charlene is a cash basis, self-employed photographer with currently only two major commercial clients. She received two 1099-Misc forms: for $35,000 and $25,000 for photo shoots in 2014. She also received a payment of $18,000 in Feb. 2014 from a former client for a photo package sold in late Dec. 2013. She did not receive a Form 1099 for this amount. *Charlene's first husband (Martin King) died 8 years ago of cancer and she inherited a lump sum of $200,000 in life insurance proceeds which she invested in mutual stock funds and an interest-bearing cash account at Edward Jones – see below. She draws money from the account throughout the year to buy "things" for her family. David in a senior site manager for a young, growing construction firm. He received a W-2 for gross wages of $95,000; Fed Tax W/H of $20,000; ASSUME ALL FICA AMOUNTS WITHHELD AT THE CORRECT AMOUNT. His firm (which is struggling due to the economy) does NOT reimburse him for any out of pocket expenses that he may incur. Daughter Stephanie is a full-time undergraduate student – at TLU. Stephanie worked for her mother when she first got out of high school and just started college in 2012. She is a junior as of Dec 2014. She lived in campus dorms, full-time during the school year. She returned to her "home" in Austin during semester breaks. She received no grants or scholarships. Her great aunt sends her $300 each and every month to spend on whatever she wishes. Addition information (no foreign accounts during the tax year) Interest Income:Bank of America Form 1099-Int $1,100Frost Bank Form 1099-Int 50Edward Jones Money Market (Cash Account) Form 1099-Int 350Interest from US Series EE savings bonds (purchased in 1985) that were cashed in (proceeds used for Stephanie's educational expenses) 150 Dividend Income:Charlene's American Mutual Funds Account At Edward Jones Form 1099-Div $8,000 ordinary; of which $1,000 is qualified Stock Transactions: ASSUME IRS NOTIFICATION PROVIDED BY BROKERDell, 50 shares sold, net sales proceeds from broker $5,500; date sold 03/1/2014, Basis $ 75 per share, date purchased 10/3/2011Clear Channel, 100 shares sold, net sales proceeds from broker $12,000; Date sold 4/1/2014, Basis $125 per share, date purchased 12/10/2009 Charlene uses her own name as the name of her company. She uses her SS number in lieu of an ENI. Charlene works out of her home but does not have a specific "office in the house" as she typically does her office related work in the den or living room. She uses a "business use only" computer system that is fully depreciated. She incurred the following business related expenses during the year:Printing/copying $5,000Legal & Agent fees $125Office Supplies $1,750 Internet Service used 100% for her work $500 (this is the total Time Warner service bill)Postage/UPS $300 Medical Expenses (unreimbursed portions)Premiums for health insurance for the family $12,800 (this is the portion husband had to pay)(medical plan is through husband's job)Medicine and drugs (prescription) 3,500Eyeglasses (for three members of the family) 1,500 Mileage to & from a medical clinic in Houston 475 miles (on Dec 11, 2014)Other Unreimbursed "qualified" medical expenses paid by the taxpayer – all relating to doctor care and a hospital stay when Hallie fell and broke several bones, etc. $18,000 InterestHome Mortgage paid on Austin home 12,200 (paid to Country Wide)Home Mortgage paid on weekend house 7,150 (paid to Regional Finance)Business Use Credit Card (100%) used by Charlene 500 TaxesReal Estate Taxes - Austin home 8,800Real Estate Taxes – weekend home 1,200 Contributions (you have verified all dates as correct)All "cash" and clients have all required receipts and required documentation. (all are IRS recognized non-profit organizations)United Way of Austin 125 (paid by credit card on 12/31/14)Salvation Army 175 (check dated in 6/20/14)American Heart Association 500 (check dated and mailed on 12/31/14; received "thank you" note is dated 1/12/15)First Baptist Church 5,200 (paid by check dated 10/11/14) Other/MiscellaneousIncome Tax preparation fee $850 (paid in May 2014 for 2013 return; this is full amount: assume 50% is related to Charlene's Sch C) Safe deposit box used 100% for storage of Hallie's mementos $125 David's Engineers Society dues and State license $1,150David's unreimbursed "work related" office supplies 3,175 David's airfare to a one-day business meeting in Chicago 2,850 (first class; no advance purchase, RT)Interest paid on David's student loan (got his master's in 2013) 800David lost gross $200 in a poker game; winnings = 0; he has documentation. Child care ExpensesPaid for (son) Austin: Growing Child After School Day Care, Austin ID# 05-3434567 (two days a week) $5,850 Educational Expenses –paid during tax yearPaid in 2014 to TLU for Stephanie's 2014 Tuition $35,000Stephanie's textbooks (total) 2,500Stephanie's room and board expenses (total) 7,000Austin attends public school. Estimated Taxes Paid (on time)Paid $5,000 for each of the four quarters; total of $20,000.If applicable, client would like any over-payment to be applied to 2015. You may work in groups of up to four MAX. You do not need to send me the name of your team in advance.Do not come to me with questions other than those that you would normally ask of the client (so you may ask for "clarification of information provided" issues). Remember the client is coming to you to prepare the taxes because: (1) They don't want to do their own taxes, and (2) They don't know anything about taxes.Required: You must complete the return manually Then staple the forms together (one staple) in attachment order. Turn in Form 1040 and any of the tax forms/schedules that the IRS would require to be filed with the returnsYour clients, David and Charlene Thomas, (David is 55 and Charlene is 45) have hired you to complete their 2014 tax return (2014 tax year). They wish to pay the minimum amount of taxes possible in this tax year. Disregard AMT; BUT DO CONSIDER ALL OTHER available credits). Assume they have provided you with copies of all the following information. They reside in Austin, Texas at 555 Lookout Dr., zip 78725. Their SS numbers are 111-11-1111 and 222-22-2222 respectively. They provide 100% of the support for their two adopted children: both of which are both full-time students – Austin, son (age 8) and their daughter is Stephanie (age 24). Their SS numbers are: 555-55-5555 and 333-33-3333, respectively. (All ages as of Dec 31, 2014) Charlene's mother, Hattie Hunter (age 76, widowed) lived with them all year. Her SS number is 666-66-6666. Except for $15,000 which Hattie received in Jan 2014 as an inheritance from her half-brother's estate, she has no other source of income (assume she does NOT qualify for social security/medicare). Hattie spent ALL $15,000 of her inherited money on her own education during 2014. Originally just 6 hours short of a degree, Hallie just finished her bachelor's degree at a private university in Dec 2014, and hopes to dedicate the rest of her life as a volunteer at a local children's home. Assume the taxpayer's paid over half of Hattie's total support. Charlene is a cash basis, self-employed photographer with currently only two major commercial clients. She received two 1099-Misc forms: for $35,000 and $25,000 for photo shoots in 2014. She also received a payment of $18,000 in Feb. 2014 from a former client for a photo package sold in late Dec. 2013. She did not receive a Form 1099 for this amount. *Charlene's first husband (Martin King) died 8 years ago of cancer and she inherited a lump sum of $200,000 in life insurance proceeds which she invested in mutual stock funds and an interest-bearing cash account at Edward Jones – see below. She draws money from the account throughout the year to buy "things" for her family. David in a senior site manager for a young, growing construction firm. He received a W-2 for gross wages of $95,000; Fed Tax W/H of $20,000; ASSUME ALL FICA AMOUNTS WITHHELD AT THE CORRECT AMOUNT. His firm (which is struggling due to the economy) does NOT reimburse him for any out of pocket expenses that he may incur. Daughter Stephanie is a full-time undergraduate student – at TLU. Stephanie worked for her mother when she first got out of high school and just started college in 2012. She is a junior as of Dec 2014. She lived in campus dorms, full-time during the school year. She returned to her "home" in Austin during semester breaks. She received no grants or scholarships. Her great aunt sends her $300 each and every month to spend on whatever she wishes. Addition information (no foreign accounts during the tax year) Interest Income:Bank of America Form 1099-Int $1,100Frost Bank Form 1099-Int 50Edward Jones Money Market (Cash Account) Form 1099-Int 350Interest from US Series EE savings bonds (purchased in 1985) that were cashed in (proceeds used for Stephanie's educational expenses) 150 Dividend Income:Charlene's American Mutual Funds Account At Edward Jones Form 1099-Div $8,000 ordinary; of which $1,000 is qualified Stock Transactions: ASSUME IRS NOTIFICATION PROVIDED BY BROKERDell, 50 shares sold, net sales proceeds from broker $5,500; date sold 03/1/2014, Basis $ 75 per share, date purchased 10/3/2011Clear Channel, 100 shares sold, net sales proceeds from broker $12,000; Date sold 4/1/2014, Basis $125 per share, date purchased 12/10/2009 Charlene uses her own name as the name of her company. She uses her SS number in lieu of an ENI. Charlene works out of her home but does not have a specific "office in the house" as she typically does her office related work in the den or living room. She uses a "business use only" computer system that is fully depreciated. She incurred the following business related expenses during the year:Printing/copying $5,000Legal & Agent fees $125Office Supplies $1,750 Internet Service used 100% for her work $500 (this is the total Time Warner service bill)Postage/UPS $300 Medical Expenses (unreimbursed portions)Premiums for health insurance for the family $12,800 (this is the portion husband had to pay)(medical plan is through husband's job)Medicine and drugs (prescription) 3,500Eyeglasses (for three members of the family) 1,500 Mileage to & from a medical clinic in Houston 475 miles (on Dec 11, 2014)Other Unreimbursed "qualified" medical expenses paid by the taxpayer – all relating to doctor care and a hospital stay when Hallie fell and broke several bones, etc. $18,000 InterestHome Mortgage paid on Austin home 12,200 (paid to Country Wide)Home Mortgage paid on weekend house 7,150 (paid to Regional Finance)Business Use Credit Card (100%) used by Charlene 500 TaxesReal Estate Taxes - Austin home 8,800Real Estate Taxes – weekend home 1,200 Contributions (you have verified all dates as correct)All "cash" and clients have all required receipts and required documentation. (all are IRS recognized non-profit organizations)United Way of Austin 125 (paid by credit card on 12/31/14)Salvation Army 175 (check dated in 6/20/14)American Heart Association 500 (check dated and mailed on 12/31/14; received "thank you" note is dated 1/12/15)First Baptist Church 5,200 (paid by check dated 10/11/14) Other/MiscellaneousIncome Tax preparation fee $850 (paid in May 2014 for 2013 return; this is full amount: assume 50% is related to Charlene's Sch C) Safe deposit box used 100% for storage of Hallie's mementos $125 David's Engineers Society dues and State license $1,150David's unreimbursed "work related" office supplies 3,175 David's airfare to a one-day business meeting in Chicago 2,850 (first class; no advance purchase, RT)Interest paid on David's student loan (got his master's in 2013) 800David lost gross $200 in a poker game; winnings = 0; he has documentation. Child care ExpensesPaid for (son) Austin: Growing Child After School Day Care, Austin ID# 05-3434567 (two days a week) $5,850 Educational Expenses –paid during tax yearPaid in 2014 to TLU for Stephanie's 2014 Tuition $35,000Stephanie's textbooks (total) 2,500Stephanie's room and board expenses (total) 7,000Austin attends public school. Estimated Taxes Paid (on time)Paid $5,000 for each of the four quarters; total of $20,000.If applicable, client would like any over-payment to be applied to 2015. You may work in groups of up to four MAX. You do not need to send me the name of your team in advance.Do not come to me with questions other than those that you would normally ask of the client (so you may ask for "clarification of information provided" issues). Remember the client is coming to you to prepare the taxes because: (1) They don't want to do their own taxes, and (2) They don't know anything about taxes.Required: You must complete the return manually Then staple the forms together (one staple) in attachment order. Turn in Form 1040 and any of the tax forms/schedules that the IRS would require to be filed with the returns