Instructions:
Please
complete the 2019 federal individual income tax return (Form 1040, Schedule 1
and Schedule A) for Bob and Melissa Grant.
Stop after completing 1040 Line 12a for this project.Individual Tax Return Project Instructions: Please complete the 2019 federal individual income tax return (Form 1040, Schedule 1 and Schedule A) for Bob and Melissa Grant. Stop after completing 1040 Line 12a for this project. Submit and check your answers on D2L>Quizzes>Individual Tax Return. Bob and Melissa Grant are married and live in Lexington, Kentucky. The Grants would like to file a joint tax return for the year. They have 19-year-old twin-daughters who still qualify as their dependents on the tax return. Bob Grant received the following during the year: Employer Gross Wages Federal Income Tax Withholding State Income Tax Withholding University of Kentucky $117,450 $22,000 $6,000 Melissa Grant received the following during the year: Employer Gross Wages Federal Income Tax Withholding State Income Tax Withholding Jensen Photography $20,500 $2,450 $1,025 All applicable and appropriate payroll taxes were withheld by Grants’ respective employers. The Grants also received the following during the year: Interest Income from First Kentucky Bank $580 Interest Income from City of Lexington, KY Bond $600 Interest Income from U.S. Treasury Bond $825 Disability insurance payments received by Bob on account of injury 3,000 Bob’s employer paid for the insurance policy issued by Aflac (NYSE AFL) as part of the tax-free fringe benefits Payment to Melissa as a result of a lawsuit for damages she sustained in a car accident: · Reimbursement for her medical Expenses $14,500 · Punitive Damages $10,000 Eight years ago, Melissa purchased an annuity contract for $80,000. This year, she received her first payment on the annuity. The payment amount was $16,000. The annuity started to pay on January 1 and she received a full first year’s payment. It will pay her $16,000 per year for ten years beginning this year. In 2019, they also received $420 of Kentucky state income tax refund. They took itemized deduction in 2018 and the amount of their total itemized deduction in 2018 is $31,878. The total of their 2018 State and Local Taxes paid is $9,100. The Grants also placed $455 in the Kentucky Derby and won $3,225 from their tickets. The Grants paid or incurred the following expenses during the year: Dental/Orthdontist (not paid by insurance) $ 23,000 Medical visits (not paid by insurance) 625 Prescriptions (not paid by insurance) 380 Real property taxes on residence 1,800 Mortgage interest on principal residence 8,560 Contribution to First Baptist Church of Kentucky (Qualified Charity) 7,000 Fee paid to Jones & Company, CPAs for tax preparation 200 In addition, Melissa paid $2,500 of interest on her student loan. During the year, the Grants’ personal belongings were damaged by a federally declared disaster in September of the current year. All the items are considered damaged in one event. Item Purchase Date Decline in FMV Tax Basis of Item Insurance Reimbursement Received Laptop computer and Printer 09/01/2013 3,000 3,000 500 Rifle 03/01/2010 12,000 12,500 500 TV/Projector 03/01/2010 5,000 13,000 1,000 2005 Honda Pilot 07/01/2011 4,000 6,500 500 The Grants do not want to contribute to the Presidential Election Campaign and do not have any virtual currency. 1 D Appendix D Tax Rates 2019 Tax Rate Schedules Individuals Schedule X-Single If taxable income is But not over: over: The tax is: $ 0 $ 9,700 10% of taxable income $ 9,700 $ 39,475 $970 plus 12% of the excess over $9,700 $ 39,475 $ 84,200 $4,543 plus 22% of the excess over $39,475 $ 84,200 $160,725 $14,382.50 plus 24% of the excess over $84,200 $160,725 $204,100 $32,748.50 plus 32% of the excess over $160,725 $204,100 $510,300 $46,628.50 plus 35% of the excess over $204,100 $510,300 — $153,798.50 plus 37% of the excess over $510,300 Schedule Z-Head of Household If taxable income is But not over: over: The tax is: $ 0 $ 13,850 10% of taxable income $ 13,850 $ 52,850 $1,385 plus 12% of the excess over $13,850 $ 52,850 $ 84,200 $6,065 plus 22% of the excess over $52,850 $ 84,200 $160,700 $12,962 plus 24% of the excess over $84,200 $160,700 $204,100 $31,322 plus 32% of the excess over $160,700 $204,100 $510,300 $45,210 plus 35% of the excess over $204,100 $510,300 — $152,380 plus 37% of the excess over $510,300 Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is But not over: over: The tax is: $ 0 $ 19,400 10% of taxable income $ 19,400 $ 78,950 $1,940 plus 12% of the excess over $19,400 $ 78,950 $168,400 $9,086 plus 22% of the excess over $78,950 $168,400 $321,450 $28,765 plus 24% of the excess over $168,400 $321,450 $408,200 $65,497 plus 32% of the excess over $321,450 $408,200 $612,350 $93,257 plus 35% of the excess over $408,200 $612,350 — $164,709.50 plus 37% of the excess over $612,350 Schedule Y-2-Married Filing Separately If taxable income is But not over: over: The tax is: $ 0 $ 9,700 10% of taxable income $ 9,700 $ 39,475 $970 plus 12% of the excess over $9,700 $ 39,475 $ 84,200 $4,543 plus 22% of the excess over $39,475 $ 84,200 $160,725 $14,382.50 plus 24% of the excess over $84,200 $160,725 $204,100 $32,748.50 plus 32% of the excess over $160,725 $204,100 $306,175 $46,628.50 plus 35% of the excess over $204,100 $306,175 — $82,354.75 plus 37% of the excess over $306,175 spi69614_appd_D-D1.indd 4 2/20/19 5:51 PM Appendix D D-1 Amount of Each Additional Standard Deduction for Taxpayers Who Are Age 65 or Blind 2018 2019 Amount Amount Married taxpayers $1,300 $1,300 Single taxpayer or head of household $1,600 $1,650 If taxable income is But not over: over: The tax is: $ 0 $ 2,600 10% of taxable income $ 2,600 $ 9,300 $260 plus 24% of the excess over $2,600 $ 9,300 $12,750 $1,868 plus 35% of the excess over $9,300 $12,750 $3,075.50 plus 37% of the excess over $12,750 Estates and Trusts Tax Rates for Net Capital Gains and Qualified Dividends Rate* Taxable Income Married Married Head of Trusts Filing Jointly Filing Separately Single Household and Estates 0% $0 − $78,750 $0 − $39,375 $0 − $39,375 $0 − $52,750 $0 − $2,650 15% $78,751 − $488,850 $39,376 − $244,425 $39,376 − $434,550 $52,751 − $461,700 $2,651 − $12,950 20% $488,851+ $244,426+ $434,551+ $461,701+ $12,951+ *This rate applies to the net capital gains and qualified dividends that fall within the range of taxable income specified in the table (net capital gains and qualified divi- dends are included in taxable income last for this purpose). Basic Standard Deduction Amounts* 2018 2019 Filing Status Amount Amount Married Filing Jointly $24,000 $24,400 Qualifying Widow or Widower $24,000 $24,400 Married Filing Separately $12.000 $12,200 Head of Household $18,000 $18,350 Single $12,000 $12,200 *For individuals claimed as a dependent on another return, the 2019 standard deduction is the greater of (1) $1,100 or (2) $350 plus earned income not to exceed the standard deduction amount of those who are not dependents. Corporations Rate Taxable Income 21% All Exemption Amount 2018 2019 $4,150 $4,200* *Used for qualifying relative gross income test. spi69614_appd_D-D1.indd 1 2/20/19 5:51 PM 2019 Form 1040 Fo rm1040 Department of the Treasury—Internal Revenue Service (99)U.S. Individual Income Tax Return 2019 OMB No. 1545-0074 IRS Use Only—Do not write or staple in this space. Filing Status