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Tax Return

In: Business and Management

Submitted By poormom01
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Return 1

Harold and Sarah’s Federal Return
Carla Sroufe
ACC401
Christine Errico
October 15, 2012

Return 2
Harold and Sarah’s Federal Return To complete Harold and Sarah’s Federal tax return, Form 1040 was the form that was chosen when using Tax Act CD. Form 1040 or 1040A are the forms that are required when itemizing deductions. The Petersan’s have many deductions that may help them reduce the tax they owe. I used Schedule A to report the sale of the house, medical expenses, and the mortgage interest. The medical expenses are the medical insurance that both Sarah and Harold had contributed through payroll payments. They both contributed $1,347 which equals $2,694. The real estate taxes are the taxes paid on the property for the year which was $1,500. The mortgage interest was also reported on Schedule A in the amount of $14,400. The total for Schedule A on line 40 is $18,014. The adjusted AGI for Harold and Sarah is $90,916. After subtracting the itemized deductions, the amount is $72,902. I used Form 2441 to configure the Child and Dependent Care expenses. This form helped to configure how much the Petersan’s can report for child care expenses. The maximum amount that can be considered out of the $10,320 is $3,000 for a qualified dependent. With consideration of the AGI, the decimal amount .20 was used to determine the amount that is allowable for the child care expenses. The total amount that the Petersan’s can report is $3,000 multiplied by .20 which equals 600. Using the Credit Limit worksheet, the credit is lowered to $265 instead of the $600 since it is the lower amount of the two. Assignment 3
The Petersan’s are eligible for the Child Tax Credit. Using part one of the Worksheet for the Child Tax Credit, the Petersan’s are just under the $110,000 that is the maximum for individuals who are filing married filing…...

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