Posted: March 3rd, 2022

DeVry University Chicago Tax Filings of Joseph Smith and Rita Smith Case Study

DeVry University Chicago Tax Filings of Joseph Smith and Rita Smith Case Study

Joseph L. Smith (age 45, Social Safety quantity 145-26-9210) and Rita M. Smith (age 43, Social Safety quantity 142-46-5108) are husband and spouse. They dwell at 1650 Belmont Avenue, Chicago, IL 60615. David is a self-employed CPA and Rita is a 3rd grade instructor. They’ve two youngsters: Blake (age 5, Social Safety quantity 310-51-2108) and Amelia (age three, Social Safety quantity 314-62-8924).

In 2018, Joseph earned $182,000 and Rita earned $46,000. The Smith household has medical protection by way of the varsity system for which Rita works. As an worker, Rita had $9,500 of federal tax withheld, $2,300 of IL state tax withheld, and the required Social Safety and Medicare taxes.

Joseph has an workplace with enterprise bills for 2018 as follows:

Should fill out the next kinds from the standards given:

Kind 1040

Schedule A

Schedule C

Schedule SE

Schedule 4562

Schedule 2441

Schedule E

Merchandise Quantity

Workplace Lease $24,000

Workplace Provides $eight,000

Web Prices $1,200

Telephone System Prices $four,800

Promoting Bills $1,800

Postage Prices $1,500

Audit/Tax Software program Prices $20,000

Enterprise Items $400

The promoting bills included native newspaper ads, digital advertising, and direct advertising flyers. The enterprise presents have been $40 present certificates given to his 10 largest purchasers in appreciation for his or her enterprise.

Joseph bought a 2017 Honda Civic in 2017. In 2018, he drove 24,000 enterprise miles and 6,000 private miles, and makes use of the usual mileage methodology for tax functions.

In 2018, Joseph made estimated quarterly federal tax funds of $18,000/quarter and estimated quarterly IL state tax funds of $three,000. All of the funds have been made inside calendar 2018. Joseph additionally contributed $eight,000 to his SEP account.

Rita purchased varied provides for her classroom, however didn’t intently monitor expenditures and thus solely needs to take the allowed educator bills deduction. Her instructor’s license was additionally renewed in 2018 for $125.

Blake and Amelia are each in day care on the Riley Day Care Heart at 1325 Lake Road, Chicago, IL 60612 (EIN 36-2875647). They’re solely in day take care of 9 months of the 12 months (weekly cost of $240.00/week), as a result of Rita doesn’t work throughout the summer time.

Along with the wages and bills as detailed, the Smiths have the next documented earnings and bills:

Merchandise Quantity

Curiosity earnings from CDs $1,800

Curiosity Revenue from Collection EE $four,000

Authorities Bonds Mortgage Curiosity on Principal Residence $15,000

Property taxes on Residence $eight,000

PMI Insurance coverage Funds $three,000

Money Charitable Contributions $2,500

Non-Money Contributions (Used Clothes to Salvation Military) $350

The Smiths itemized deductions in 2017. The federal tax refund was $three,500 and the IL state tax refund was $600.

As well as, the Smiths personal rental property (a “two flat” in Chicago) which they’ve rented out for all the 12 months. Complete rental earnings was $30,000. Rental property associated bills have been as follows:

Merchandise Quantity

Mortgage Curiosity on Rental Property $13,000

Property Tax $9,000

Repairs on Rental Models $2,600

Depreciation on Rental Models (utilizing SL Depreciation) $three,500

Utilities $three,000

Landscaping $500

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