Accounting

Accounting

Tax Return

James R. and Patricia L. Link are married and live at 541 Memory Lane, Evansville, IN 47712.  James works for the local visitors bureau, and Patricia works part time as a medical transcriptionist.  During 2014, the Links had the following receipts:

Salaries (61,000 for James and 41,000 for Patricia)    $102,000

Interest income:

City of Evansville Bonds    1,000

General Electric Bonds    1,100

Old National certificate of deposit    400

Child support from Bob Stone    9,200

Gifts from parents    26,000

Settlement from Greyhound tours    90,000

Lottery winnings    600

Federal tax refund from tax year 2013    400

Patricia had been married to Bob Stone.  When they divorced several years ago she was awarded custody of their children, Shannon and Wesley.  (Patricia has never signed a Form 8332 waiver).

In June while going to dinner in Evansville, Patricia was injured by a Greyhound bus.  The driver was clearly at fault, so Greyhound paid her medical expenses.  In addition, Greyhound paid her $90,000 in settlement of her personal injuries sustained.

The Links had the following expenditures:

Medical expenses not covered by insurance    $7,200

Taxes:

Property taxes on personal residence    3,600

State of Indiana income taxes withheld    4,200

Interest on home mortgage    6,000

Paid church donation    3,600

Life insurance premiums on James’ life    1,200

Contribution to traditional IRA (on Patricia’s behalf)    5,000

Parking tickets    150

Contribution to the Re-elect Winnecke campaign (mayor)    600

Funeral expenses for Paul Buttram    6,300

As a part-time employee, Patricia is not covered under her employer’s pension plan, so she provides for her own retirement with a traditional IRA.  Because the mayor is a member of the visitors bureau board, James felt compelled to make the political contribution.

The Link’s household includes the following, for whom they provide more than half the support:

Social Security Number    Birthdate

James Link     123-45-6786    12/16/1972

Patrticia Link    123-45-6787    8/8/1974

Shannon Stone    123-45-6788    10/9/1995

Wesley Stone    123-45-6789    5/3/1997

Paul Buttram    123-45-6785    6/15/1939

Shannon graduated from high school on May 9, 2014, and is undecided about college.  During 2014, she earned $8,500 (which was placed in a savings account) through a part-time job.  Paul is Patricia’s widowed father who died January 3, 2014.  For the past several years, Paul has qualified as a dependent of James and Patricia.

Federal income tax withheld is $5,200 (James) and $3,100 (Patricia).  The proper amount of Social Security and Medicare tax was withheld.

Prepare a joint income tax return for the Links for 2014 including all required forms.  They want to contribute to the Presidential Election Campaign fund.  All members of the family had health insurance for the entire year.  If they have an overpayment, they want it refunded.

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