Taxes Form 1040

Jonathan and Danielle Snow are married and live at 1800 Winterland Place, Virginia Beach, VA 23453.  They have two children, Arielle and Jason who lived with them the entire year. They do not wish to contribute to the Presidential Election campaign fund. Their daytime telephone number is 757-555-6678.  Note

Below is their information:

Name                          Birthdate                     SSN

Jonathan T. Snow        02/28/80                     227-15-5555

Danielle T. Snow          12/21/82                     226-21-7948

Arielle Snow    01/04/2012                 226-13-4594

Jason P. Snow              10/16/2010                 385-14-8972

The Snows also support two other individuals who do not live in their house:  1) They support Danielle’s mother, Leah Hall (Birthdate:  06/15/1945; SSN: 227-89-3322) who lives in an assisted living facility in Virginia Beach.  Leah’s gross income for the year was $4,000.    2) They also support Jonathan’s son from his previous marriage, Jack P. Snow (SSN: 225-64-1234) (Birthdate: 11/03/2001). Jack lives in an apartment and attends college part-time at ODU.  He earned $8,670 in wages from his part-time job as a bartender. 

The entire Snow family, including Leah and Jack all have minimum essential health coverage through Jon’s company.   

1. Jonathan received a W-2 from his employer as an Architect with the following information:

            Hall, Crumb & Associates.

            10400 Columbus Avenue, Virginia Beach, VA 23453

            EIN:                              13-5569876

Wages                         $100,500

            Federal withheld            11,220

            State taxes withheld       4,500

            Social Security tax          6,231

            Medicare tax                     1,457

Danielle received a W-2 from her job as a teacher with the following information:

            Virginia Beach Public Schools

            206 Main Street, Virginia Beach, VA 23453

            EIN:                              58-2345899

Wages                         $43,740

            Federal withheld            1,680

            State taxes withheld       1,856

            Social Security tax           2,712

            Medicare tax                      634

2. Jonathan won money playing the slot machine on 7/8: MGM Casino (EIN:  13-2229999) $1,000 (from W-2 G).  100 Harbor Way, Oxon Hill, MD 20745

3. During the year, Jonathan and Danielle paid the following amounts (all of which can be substantiated).  Note you MUST prepare a Schedule A - Itemized Deductions:

Home mortgage interest (Commerce Bank)              $19,640

Mastercard interest                                                            750

Real estate taxes on personal residence                        3,800

Property taxes on cars                                                       632

Unreimbursed hospital bills                                       2,200

Income tax preparation fee                                        200

Gambling losses                                                          1,800   

Charitable contributions (receipts for all):

            Church                                                             1,700

            VA Moderate Political Party                           220

            Owens family (Go Fund Me house fire)         100      

4. In addition, Jonathan and Danielle received the following:

            Community Bank interest (EIN: 13-2416396) of $122.

            VT Growth mutual fund (EIN: 13-9854122)

                        Capital gain distribution (line 2a)                               22

                        Ordinary dividend (Box 1a and Box 1b)                      127

                        Nondividend distribution (line 3)                                24

                                                            Total                                        173                                                                              

5. Alimony paid to Jonathan’s former spouse Goldy Digger (SSN: 224-16-7777) whom he divorced on 7/5/2005.                    $10,650. 

6. Jonathan and Danielle received Form 1099-B (basis was reported to IRS) with the following capital transactions.  No adjustment codes are needed.  Enter on Form 8949 of Sch. D:

Item                                         Purch.              Sold                 Sales price       Basis    

60 shares - OMG stock            10/13/15         08/13/22         $3,600             $ **      

50 shares - LOL stock              11/10/21          09/21/22         $ 4,500            $ 5,180            

** The Snows originally purchased 150 shares of OMG stock for $6,450. 

7. Jonathan likes to spend his spare time practicing photography.  He wants to specialize in structural photography.  Pursuant to this desire, Jonathan has a photography business and incurs the following expenses:

            Photography supplies                         $1,540

            Travel to locations to take photos       2,872

During the year, Jonathan sells 7 photos for $200 each. (He received Form 1099-Misc from ACME Co.)  In the last five years, Jonathan has had similar results with this business.

8. As a school teacher, Danielle is often asked to tutor her neighbor’s children.  She does this work “on the side”.  This year, she began an entrepreneurial venture (1/15/22) which is small, but profitable. Because she tutors on location, Danielle has no rent expense.  She did not set up a home office either.  She also did not make any payments that would require filing Forms 1099.  She materially participated in this business and uses her home address as her business address.  Below is the information for Danielle’s cash basis tutoring business:

Name:  A-Plus Learning

Business address and ID:  (Use personal information)

Business Activity type:  Education Services

Business Activity Code: 611000

Tutoring Fees                                                  $3,400 (No Forms 1099-MISC received)

Expenses:

Business Miles 

            Jan - Jun:                      51 miles

            Jul – Dec:                     74 miles

Total Commuting Miles                                              3400

Other Personal Miles                                                  2800

Total Miles driven                                                       6,325

(Danielle keeps a written log of her auto miles.  Use the standard mileage rate.)

City business license               $150

Supplies                                   $262

Liability Insurance                   $180

9. Because their home is so close to the beach, the Snows rented out their home for one week in July.  During that time, the Snows went away on vacation.  They received $2,700 in rental income.  The utilities for that week were $94.  

10.  As a teacher, Danielle spent a total of $525 on her class for supplies, teaching aides, etc. She kept her receipts.  

11. Danielle’s father passed away two years ago.  In February, Danielle received a check for $10,000 of life insurance proceeds.  Danielle’s mother Leah Hall also received a check for $80,000 of life insurance proceeds which she immediately invested in a certificate of deposit. 

12.  The Snows made quarterly estimated tax payments on Form 1040-ES because they thought their federal withholdings would not be enough to cover the additional income from the photography, rental and tutoring business.

Paid 4/15/2022           $100

Paid 6/14/2022           $100

Paid 9/15/2022           $100

Paid 12/10/2022         $100

13. If they have any amount due or a refund, they want it handled by a check.

Required:  Using the TaxAct software, complete Form 1040 (including any required schedules and forms) for Jonathan and Danielle Snow for the 2022 tax year.