SOLUTION: California State University Northridge Insurance Deduction and Tax Return Report

Instructions
Accompanying these instructions is a mock 2014 tax return of Joe D. Plummer.
Pretend you are an IRS Revenue Agent and have been assigned Mr. Plummer’s tax return for
examination (audit). The return contains various entries which you will need to carefully
examine.
The return was filed on 4/15/2015 and contains the following forms and schedules: Form 1040
& Schedules A, B, C & SE. It was prepared by the taxpayer himself on Turbo Tax. Assume it
was filed with the IRS as you see it, even though it contains some missing information. Assume
it was signed by the taxpayer, and had a W-2 attached to it issued by ABC Construction Corp.,
555 South Victoria Ave., Ventura, CA and that the W-2 was for $1,500,000.
Review Form 1040 and each schedule carefully. See if any of the information from one
schedule might relate to another schedule – in other words, given what you see in one
schedule, does that information correspond or conflict with information on another schedule.
What makes this exam different from most of your past exams at CSUN is that there is no right
and wrong answer. This project requires that you make certain inferences from the information
you are provided and then make some factual assumptions or suppositions about the taxpayer,
his lifestyle, his assets, his business dealings, his sources of income, his expenses, the nature
of his business, the nature of his income, etc.
This project requires you to use your common sense and everyday experiences, as well as your
basic business, accounting and tax knowledge. What I am looking for most is your analysis,
followed by the organization of your answers.
1) Prepare a written Pre-Audit Analysis as follows:
Identify and prepare a list of all the items on the tax return that appear to be strange, unusual,
questionable, excessively large or excessively small in relation to other information on the
return, etc. To do this, provide a one or two sentence explanation for each such item. That is,
tell me why you identified the item & what the item tells you about the taxpayer (meaning, about
his assets, about his income, about his standard of living/life style, etc.) Also, tell me if you are
drawing any inferences from the dollar value of the item, how it is labeled/described on the tax
return, how it is being reported or deducted.
Form
1040
Department of the Treasury
‘ Internal Revenue Service
(99)
U.S. Individual Income Tax Return
For the year Jan 1 – Dec 31, 2014, or other tax year beginning
2014
, 2014, ending
Your first name and initial
OMB No. 1545-0074 IRS Use Only
, 20
‘ Do not write or staple in this space.
See separate instructions.
Last name
Your social security number
JOSEPH D PLUMMER
133-50-5453
If a joint return, spouse’s first name and initial
Last name
Spouse’s social security number
Home address (number and street). If you have a P.O. box, see instructions.
Apartment no.
3501 CARIBEH DRIVE
City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions).
ENCINO, CA 91436
Foreign country name
Foreign province/state/county
Foreign postal code
J
Make sure the SSN(s) above
and on line 6c are correct.
Presidential Election Campaign
Check here if you, or your spouse if filing
jointly, want $3 to go to this fund. Checking
a box below will not change your tax or
refund.
You
Filing Status
Check only
one box.
Exemptions
1
2
3
Single
4
Married filing jointly (even if only one had income)
Married filing separately. Enter spouse’s SSN above & full
name here. . G
5
Spouse
X Head of household (with qualifying person). (See
instructions.) If the qualifying person is a child
but not your dependent, enter this child’s
name here. .. G
Qualifying widow(er) with dependent child
6a X Yourself. If someone can claim you as a dependent, do not check box 6a. . . . . . . . . . .
Boxes checked
on 6a and 6b. . .
No. of children
on 6c who:
b
Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) b if
(2) Dependent’s
(3) Dependent’s
c Dependents:
child under ? lived
social security
relationship
age 17
with you. . . . . .
number
to you
qualifying for
child tax cr ? did not
Last
name
(1) First name
(see instrs) live with you
If more than four
dependents, see
instructions and
check here. . . G
JOSEPH PLUMMER II
JOSEPHINE PLUMMER
1
2
due to divorce
or separation
(see instrs). . . .
Dependents
on 6c not
entered above. .
Add numbers
on lines
claimed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . above. . . . . . G
542-12-3232 Son
546-31-3327 Daughter
X
X
d Total number of exemptions
7 Wages, salaries, tips, etc. Attach Form(s) W-2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Income
8 a Taxable interest. Attach Schedule B if required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8a
b Tax-exempt interest. Do not include on line 8a. . . . . . . . . . . . . .
8b
9 a Ordinary dividends. Attach Schedule B if required. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9a
Attach Form(s)
b Qualified dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9b
W-2 here. Also
attach Forms
10 Taxable refunds, credits, or offsets of state and local income taxes . . . . . . . . . . . . . . . . . . . . . 10
W-2G and 1099-R
11 Alimony received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
if tax was withheld.
12 Business income or (loss). Attach Schedule C or C-EZ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
If you did not
13 Capital gain or (loss). Att Sch D if reqd. If not reqd, ck here . . . . . . . . . . . . . . . . . . . . . . . . G
13
get a W-2,
14 Other gains or (losses). Attach Form 4797. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
see instructions.
15 a IRA distributions. . . . . . . . . . . . 15 a
b Taxable amount. . . . . . . . . . . . . 15 b
16 a Pensions and annuities . . . . . 16 a
b Taxable amount. . . . . . . . . . . . . 16 b
17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E. 17
18 Farm income or (loss). Attach Schedule F. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
19 Unemployment compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
20 a Social security benefits . . . . . . . . . . 20 a
b Taxable amount. . . . . . . . . . . . . 20 b
21 Other income
21
22 Combine the amounts in the far right column for lines 7 through 21. This is your total income. . . . . . . . . . . . . G 22
23 Educator expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Adjusted
24 Certain business expenses of reservists, performing artists, and fee-basis
government officials. Attach Form 2106 or 2106-EZ . . . . . . . . . . . . . . . . . . . . 24
Gross
25 Health savings account deduction. Attach Form 8889. . . . . . . . 25
Income
26 Moving expenses. Attach Form 3903 . . . . . . . . . . . . . . . . . . . . . . . 26
27 Deductible part of self-employment tax. Attach Schedule SE. . . . . . . . . . . . . . 27
8,604.
28 Self-employed SEP, SIMPLE, and qualified plans. . . . . . . . . . . 28
29 Self-employed health insurance deduction. . . . . . . . . . . . . . . . . . 29
30 Penalty on early withdrawal of savings . . . . . . . . . . . . . . . . . . . . . 30
31,203.
31 a Alimony paid b Recipient’s SSN . . . . G 121-43-4341
31 a
240,000.
32 IRA deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
33 Student loan interest deduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
34 Tuition and fees. Attach Form 8917 . . . . . . . . . . . . . . . . . . . . . . . . 34
10,219.
35 Domestic production activities deduction. Attach Form 8903. . . . . . . . . . . . . . 35
36 Add lines 23 through 35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
37 Subtract line 36 from line 22. This is your adjusted gross income. . . . . . . . . . . . . . . . . . . . . G 37
BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions.
FDIA0112L 12/29/14
3
750,000.
114,217.
303.
191,095.
312,032.
1,367,647.
290,026.
1,077,621.
Form 1040 (2014)
Form 1040 (2014)
Tax and
Credits
Standard
Deduction
for ‘
? People who
check any box
on line 39a or
39b or who can
be claimed as a
dependent, see
instructions.
? All others:
Single or
Married filing
separately,
$6,200
Married filing
jointly or
Qualifying
widow(er),
$12,400
Head of
household,
$9,100
Other
Taxes
Payments
If you have a
qualifying
child, attach
Schedule EIC.
Refund
Direct deposit?
See instructions.
Amount
You Owe
Third Party
Designee
Sign
Here
Joint return?
See instructions.
Keep a copy
for your records.
JOSEPH D PLUMMER
38 Amount from line 37 (adjusted gross income). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39 a Check
You were born before January 2, 1950,
Blind.
Total boxes
Spouse was born before January 2, 1950,
if:
Blind.
checked G 39 a
b If your spouse itemizes on a separate return or you were a dual-status alien, check here . . . . . . . . . G 39 b
Itemized deductions (from Schedule A) or your standard deduction (see left margin) . . . . . . . . . . . . . . . . . . . .
Subtract line 40 from line 38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exemptions. If line 38 is $152,525 or less, multiply $3,950 by the number on line 6d. Otherwise, see instrs. . . . . .
Taxable income. Subtract line 42 from line 41.
If line 42 is more than line 41, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44 Tax (see instrs). Check if any from:
a
c
Form(s) 8814
b
Form 4972 . . . . . . . . . . . . . . . . . . . . . . . . . . .
45 Alternative minimum tax (see instructions). Attach Form 6251. . . . . . . . . . . . . . . . . . . . . . . . . .
46 Excess advance premium tax credit repayment. Attach Form 8962. . . . . . . . . . . . . . . . . . . . . .
47 Add lines 44, 45 and 46. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G
48 Foreign tax credit. Attach Form 1116 if required. . . . . . . . . . . . .
48
49 Credit for child and dependent care expenses. Attach Form 2441 . . . . . . . . . .
49
50 Education credits from Form 8863, line 19. . . . . . . . . . . . . . . . . .
50
51 Retirement savings contributions credit. Attach Form 8880. . .
51
52 Child tax credit. Attach Schedule 8812, if required . . . . . . . . . .
52
53 Residential energy credits. Attach Form 5695. . . . . . . . . . . . . . .
53
40
41
42
43
54 Other crs from Form: a
54
3800 b
8801 c
55 Add lines 48 through 54. These are your total credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56 Subtract line 55 from line 47. If line 55 is more than line 47, enter -0-. . . . . . . . . . . . . . . . . . G
57 Self-employment tax. Attach Schedule SE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58 Unreported social security and Medicare tax from Form: a
8919. . . . . . . . . . . . . . . . . . . . . . .
4137 b
59 Additional tax on IRAs, other qualified retirement plans, etc. Attach Form 5329 if required. . . . . . . . . . . . . . . . . . .
60 a Household employment taxes from Schedule H. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b First-time homebuyer credit repayment. Attach Form 5405 if required . . . . . . . . . . . . . . . . . . .
X ………..
61 Health care: individual responsibility (see instructions) Full-year coverage
62 Taxes from: a X Form 8959 b
Form 8960 c
Instrs; enter code(s)
63 Add lines 56-62. This is your total tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G
64 Federal income tax withheld from Forms W-2 and 1099 . . . . .
64
236,250.
65 2014 estimated tax payments and amount applied from 2013 return. . . . . . . .
65
66 a Earned income credit (EIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66 a
b Nontaxable combat pay election . . . . . G 66 b
67 Additional child tax credit. Attach Schedule 8812. . . . . . . . . . . .
67
68 American opportunity credit from Form 8863, line 8. . . . . . . . .
68
69 Net premium tax credit. Attach Form 8962. . . . . . . . . . . . . . . . . .
69
70 Amount paid with request for extension to file . . . . . . . . . . . . . .
70
71 Excess social security and tier 1 RRTA tax withheld. . . . . . . . .
71
72 Credit for federal tax on fuels. Attach Form 4136. . . . . . . . . . . .
72
73 Credits from Form: a
73
Reserved c
Reserved d
2439 b
74 Add lns 64, 65, 66a, & 67-73. These are your total pmts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G
75 If line 74 is more than line 63, subtract line 63 from line 74. This is the amount you overpaid . . . . . . . . . . . . . . .
76 a Amount of line 75 you want refunded to you. If Form 8888 is attached, check here. . G
G b Routing number . . . . . . . . XXXXXXXXXX
G c Type:
Checking
Savings
G d Account number. . . . . . . . XXXXXXXXXXXXXXXXXXXXXXXX
77 Amount of line 75 you want applied to your 2015 estimated tax. . . . . . . . G 77
78 Amount you owe. Subtract line 74 from line 63. For details on how to pay, see instructions. . . . . . . . . . . . . . . G
79 Estimated tax penalty (see instructions). . . . . . . . . . . . . . . . . . . .
79
Do you want to allow another person to discuss this return with the IRS (see instructions)?. . . . . . . . . . .
Designee’s
name
FDIA0112L
12/29/14
Phone
no.
G
40
41
42
575,325.
502,296.
0.
43
502,296.
44
45
46
47
151,182.
240.
151,422.
55
56
57
58
59
60 a
60 b
61
62
63
151,422.
17,208.
6,538.
175,168.
236,250.
61,082.
61,082.
74
75
76 a
78
X No
Yes. Complete below.
Personal identification
number (PIN)
G
G
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and
belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Your signature
Date
Your occupation
Daytime phone number
A Spouse’s signature. If a joint return, both must sign.
Print/Type preparer’s name
Paid
Preparer
Use Only
Page 2
133-50-5453
38
1,077,621.
SALESMAN
Date
Preparer’s signature
Self-Prepared
Firm’s name
If the IRS sent you an Identity Protection PIN, enter
it here (see instrs)
Spouse’s occupation
Date
Check
if
PTIN
self-employed
G
Firm’s address G
Firm’s EIN G
Phone no.
Form 1040 (2014)
SCHEDULE A
OMB No. 1545-0074
Itemized Deductions
(Form 1040)
Department of the Treasury
Internal Revenue Service
(99)
2014
G Information about Schedule A and its separate instructions is at www.irs.gov/schedulea.
G Attach to Form 1040.
Attachment
Sequence No.
Name(s) shown on Form 1040
Your social security number
JOSEPH D PLUMMER
133-50-5453
Medical
and
Dental
Expenses
Taxes You
Paid
Interest
You Paid
Note.
Your mortgage
interest
deduction may
be limited (see
instructions).
Gifts to
Charity
If you made a
gift and got a
benefit for it,
see instructions.
1
2
3
07
Caution. Do not include expenses reimbursed or paid by others.
Medical and dental expenses (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Enter amount from Form 1040, line 38. . . . . .
2
Multiply line 2 by 10% (.10). But if either you or your spouse was born before
3
January 2, 1950, multiply line 2 by 7.5% (.075) instead
4 Subtract line 3 from line 1. If line 3 is more than line 1, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . . . .
5 State and local (check only one box):
a X Income taxes, or
5
50,250.
…………………………
b
General sales taxes
6 Real estate taxes (see instructions). . . . . . . . . . . . . . . . . . . . . . . . . . .
6
25,221.
7 Personal property taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
8 Other taxes. List type and amount G
8
9 Add lines 5 through 8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10 Home mtg interest and points reported to you on Form 1098. . . . . . . . . . . . . . . .
11 Home mortgage interest not reported to you on Form 1098. If paid to the person
from whom you bought the home, see instructions and show that person’s name,
identifying number, and address G
10
4
0.
9
75,471.
93,212.
11
28,443.
12
12 Points not reported to you on Form 1098. See instrs for spcl rules. . . . . . . . . . . .
13 Mortgage insurance premiums (see instructions) . . . . . . . . . . . . . .
13
14 Investment interest. Attach Form 4952 if required.
14
(See instrs.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15 Add lines 10 through 14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
16 Gifts by cash or check. If you made any gift of $250 or
more, see instrs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
121,655.
16
17 Other than by cash or check. If any gift of $250 or
more, see instructions. You must attach Form 8283 if
over $500. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17
18 Carryover from prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
19
0.
20 Casualty or theft loss(es). Attach Form 4684. (See instructions.). . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Job Expenses 21 Unreimbursed employee expenses ‘ job travel, union dues,
job education, etc. Attach Form 2106 or 2106-EZ if
and Certain
Miscellaneous
required. (See instructions.) G
Deductions
21
22 Tax preparation fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
500.
23 Other expenses ‘ investment, safe deposit box, etc. List
type and amount G
402,138.
19 Add lines 16 through 18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Casualty and
Theft Losses
Other
Miscellaneous
Deductions
Total
Itemized
Deductions
24
25
26
27
28
23
24
Add lines 21 through 23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
500.
1,077,621.
Enter amount from Form 1040, line 38. . . . . 25
26
Multiply line 25 by 2% (.02) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21,552.
Subtract line 26 from line 24. If line 26 is more than line 24, enter -0- . . . . . . . . . . . . . . . . . . . . . . 27
Other ‘ from list in instructions. List type and amount G
28
29 Is Form 1040, line 38, over $152,525?
Reduction
No. Your deduction is not limited. Add the amounts in the far right column
-23,939.
for lines 4 through 28. Also, enter this amount on Form 1040, line 40.
29
…………………..
Yes.
Your
deduction
may
be
limited.
See
the
Itemized
Deductions
Worksheet
X in the instructions to figure the amount to enter.
30 If you elect to itemize deductions even though they are less than your standard
deduction, check here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . …
Purchase answer to see full
attachment

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550 words
We'll send you the first draft for approval by September 11, 2020 at 10:52 AM
Total price:
$26
The price is based on these factors:
Customer Academic level
Number of pages required
Urgency of paper