Linda and her sister Hannah own a bed and breakfast hotel in Maine in which they provide maid services and breakfast to their tenants. Which of the following is true regarding the tax return that Linda must file. Select one: a. She must file Schedule C b. She must file Schedule E C. She must file Schedule C and E d. None of the above
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- A paid tax preparer must demonstrate due diligence. Review the following scenario, and then choose the appropriate response. Cherylynn Johnson (58) comes in to your office to have her tax return prepared. She states that she wants to use the head of household filing status and claim the Earned Income Tax Credit (EITC). She also tells you that her dependent child is her granddaughter, Alana (12), who currently lives with her. All of the following are appropriate questions to ask or actions to take EXCEPT: Ask Cherylynn how long Alana has lived with her and inquire into the whereabouts of Alana's parents. Ask Cherylynn who paid most of the expenses of maintaining her home. Inform Cherylynn that she must provide you with documentation proving Alana lived with her before you can prepare the return. Inquire whether the IRS has ever denied or reduced Cherylynn's EITC in a prior year.Which one of the following conditions must be satisfied in order for a married taxpayer to be taxed on only his income if he resides in a community property state? a.The husband and wife must live apart for the entire year. b.The husband and wife must live apart for more than half the year. c.The husband and wife must be in the process of filing for a divorce. d.Only one of the spouses can be working and earning an income. e.None of these choices are correct.Mary(58) comes into your office to have her tax return prepared. She states that she wants to use the head of household filing status and claim the Earned Income Tax Credit (EITC). She also tells you that her dependent child is her granddaughter, Julie (12), who currently lives with her. You as a paid tax preparer, all of the following are appropriate questions to ask or actions to take EXCEPT: 1). Ask Mary how long Julie has lived with her and inquire into the whereabouts of Julie's parents. 2). Ask Mary who paid most of the expenses of maintaining her home. 3). Inform Mary that she must show you documentation proving Julie lived with her before you can prepare the return. 4) Inquire as to whether anyone else can possibly claim Julie as a dependent.
- As a tax return preparer for The Fernando Rodriguez Tax & Accounting Service, you have been asked to calculate the missing information for one of the firm's tax clients. The following table gives the standard deduction for various filing statuses. Standard Deductions Single or married filing separately Married filing jointly or surviving spouse Head of household Name 65 or older and/or blind and/or someone else can claim you (or your spouse if filing jointly) as a dependent: Campbell Filing Status Income Using the standard deduction table above, complete the following table (in $). Adjusted Gross Married filing jointly $56,120 Adjustments to Income $1,760 $12,000 $ $24,000 Varies (See www.irs.gov for information.) $18,000 When finding your client's taxable income, which deduction did you use? Ostandard deduction O itemized deductions Income Standard Deduction ---Select--- ✓ Itemized Deductions $5,710 $ Taxable IncomeWhat tax forms are needed for the following example? Tim and Sarah Lawrence are married and filing a joint return. Tim's social security number is 123-45-6789, and Sarah's social security number is 111-11-1111. They reside at 100 Olive Lane, Covington, LA 70434. They have two dependent children, Sean and Debra, ages 12 and 16. Tim is a self-employed business person (sole proprietor of an unincorporated business) and Sarah a corporate executive. Tim has the following income and expenses from his business: Gross income $325,000Business Expenses $201.000 Records Related to Sarah's employment show the following:Salary $145,000Unreimbursed Travel (including $200 in meals) $1,600 Other pertinent information for the tax year include the following:Proceeds from the sale of stock acquired July 15, 2018 (cost $12,000) and sold August 1, 2018 for $9,800Proceeds from sale of stock acquired on September 18, 2017 (cost $5,000) and sold on October 5, 2018 for $3,800Wages paid to full-time…As a tax return preparer for The Fernando Rodriguez Tax & Accounting Service, you have been asked to calculate the missing information for one of the firm's tax clients. The following table gives the standard deduction for various filing statuses. Standard Deductions Single or married filing separately Married filing jointly or surviving spouse Head of household 65 or older and/or blind and/or someone else can claim you (or your spouse if filing jointly) as a dependent: Warfield Name Filing Status single Using the standard deduction table above, complete the following table (in $). Income $12,000 $3,340 $24,000 $18,000 Varies (See www.irs.gov for information.) When finding your client's taxable income, which deduction did you use? standard deduction itemized deductions Adjustments to Adjusted Gross Income Income $49,160 Standard Deduction ---Select--- Itemized Deductions $13,160 tA Taxable Income
- In connection with the application of the kiddie tax, comment on the following: The child has only earned income. The child has a modest amount of unearned income. The child is age 20, is not a student, and is not disabled. The child is married. Effect of the parental election. The result is when the parental election is made and the married parents file separate returns. show answers with explanationAs a tax return preparer for The Fernando Rodriguez Tax & Accounting Service, you have been asked to calculate the missing information for one of the firm's tax clients. The following table gives the standard deduction for various filing statuses. Name Standard Deductions Single or married filing separately Campbe || Married filing jointly or surviving spouse Head of household 65 or older and/or blind and/or someone else can claim you (or your spouse if filing jointly) as a dependent: Incom e Using the standard deduction table above, complete the following table (in $). Filing Statu S Adjusted Gross Income Adjustmen ts to Income $52,12 0 $1,560 $12,000 $ $24,000 Marrie d filing jointly When finding your client's taxable income, which deduction did you use? C standard deduction itemized deductions $18,000 Varies (See www.irs.gov for information.) $ Standard Deduction Itemized Deduction S $5,910 Taxable Income $As a tax return preparer for The Fernando Rodriguez Tax & Accounting Service, you have been asked to calculate the missing information for one of the firm's tax clients. The following table gives the standard deduction for various filing statuses. Standard Deductions Single or married filing separately $12,000 Married filing jointly or surviving spouse $24,000 Head of household $18,000 65 or older and/or blind and/or someone else can claim you (or your spouse if filing jointly) as a dependent: Varies (See www.irs.gov for information.) Using the standard deduction table above, complete the following table (in $). Adjustments Adjusted Filing Standard Itemized Taxable Name Income to Gross Status Deduction Deductions Income Income Income $ $ Warfield single $3,240 $53,660 $13,160 ---Select--- When finding your client's taxable income, which deduction did you use? O standard deduction itemized deductions
- As a tax return preparer for The Fernando Rodriguez Tax & Accounting Service, you have been asked to calculate the missing information for one of the firm's tax clients. The following table gives the standard deduction for various filing statuses. Standard Deductions Single or married filing separately $12,000 Married filing jointly or surviving spouse $24,000 Head of household $18,000 65 or older and/or blind and/or someone else can claim you (or your spouse if filing jointly) as a dependent: Varies (See www.irs.gov for information.) Using the standard deduction table above, complete the following table (in $). Adjusted Gross Adjustments Filing Standard Itemized Taxable Name Income to Status Deduction Deductions Income Income Income 2$ $ 56,500 12,000 Warfield single $3,340 $53,160 $13,160 41,160 When finding your client's taxable income, which deduction did you use? standard deduction itemized deductionsWhat is the income tax liability for the following question: Note: This problem is for the 2018 tax year. Roberta Santos, age 41, is single and lives at 120 Sanborne Avenue, Springfield, IL 60781. Her Social Security number is 123-45-6789. Roberta has been divorced from her former husband, Wayne, for three years. She has a son, Jason, who is 17, and a daughter, June, who is 18. Jason's Social Security number is 111-11-1112, and June's is 123-45-6788. Roberta does not want to contribute $3 to the Presidential Election Campaign Fund. Roberta, an advertising executive, earned a salary from ABC Advertising of $80,000 in 2018. Her employer withheld $9,000 in Federal income tax and $3,100 in state income tax. Roberta has legal custody of Jason and June. The divorce decree provides that Roberta is to receive the dependency deductions for the children. Jason lives with his father during summer vacation. Wayne indicates that his expenses for Jason are $5,500. Roberta can document that…As a tax return preparer for The Fernando Rodriguez Tax & Accounting Service, you have been asked to calculate the missing information for one of the firm's tax clients. The following table gives the standard deduction for various filing statuses. Standard Deductions Single or married filing separately $12,000 Married filing jointly or surviving spouse $24,000 Head of household $18,000 65 or older and/or blindand/or someone else canclaim you (or your spouseif filing jointly) as a dependent: Varies(See www.irs.gov for information.) Using the standard deduction table above, complete the following table (in $). Name Filing Status Income Adjustments toIncome Adjusted GrossIncome StandardDeduction ItemizedDeductions TaxableIncome Campbell Married filingjointly $56,320 $1,560 $ $ ---Select--- 12,000 24,000 18,000 $5,710 $ When finding your client's taxable income, which deduction did you use? A. standard deduction B. itemized deductions