Tax Return Project
This project involves preparation of a comprehensive individual tax return for tax year 2015 using TurboTax (or similar tax preparation software). TurboTax is available in the School of Business computer lab (on the second floor of SB) or you can choose to use any other tax preparation software (for the 2015 tax year) such as Tax Act (https://www.taxact.com/). Information on using TurboTax in the computer lab is posted on Blackboard (note this software is only loaded on the machines in the back part of the lab).
Based on the information presented below, prepare an individual tax return (married filing jointly) including all required forms and schedules for Harry and HenriettaHurricane for 2015. Submit one printed tax return (as you would mail to IRS) per group. Make sure the forms are in the order they would be filed with IRS (per form attachment sequence number in the upper right corner). Include a plain-paper cover page that includes the names of all group members. Do not use any other special covers (just staple in the upper left corner).
Harry (SSN 150-23-3344) and Henrietta (SSN 150-23-4444) Hurricane are a married couple who reside at 1034 Alhambra Blvd. Coral Gables, Florida, 33146. Their home phone is: 305-709-1234. They have two children: Isabel (SSN 167-22-5555) was born on January 20, 1998 and Sebastian (SSN 167-22-7777) was born on April 1, 2003.Both children lived at home all year, attended school full-time, and were fully supported by their parents. Harrywas born on February 18 1976. Henrietta was born March 16 1976. They also provide the full support for Henrietta's single mother, Sarah Cane(SSN 150-37-6973), who lived with them all year. Sarah was born on April 1, 1950. Sarah's only income is $14,000 of social security benefits that she puts in a savings account for possible unexpected medical expenses and $75 interest income from the savings account.
Harryworked for Biscayne Design, Inc. (EIN 99-8654332) at 111Brickell Avenue in Miami, FL 33143as an architect. His Form W-2 for 2015 reported the following information:
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Box 1: Wages
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$70,000
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Box 2: Federal income tax withheld
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$6,000
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Box 3: Social Securitywages
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$70,000
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Box 4: Social Security tax withheld
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$4,340
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Box 5: Medicare wages
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$70,000
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Box 6: Medicare tax withheld
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$1,015
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He was covered by his employer's retirement plan (box 13 was checked on his Form W-2).
Henrietta operated her own financial consulting business as a sole proprietor (business code 541219). She operated the business under her own name and rented a small furnished office at 250 Bird Road, Miami, Florida 33155, phone 305-278-7654. Henrietta's gross income for the year was $43,000. She incurred the following expenses: $2,400 supplies, $1,200 utilities, $13,200 office rent, $800 business meals, and $1,500 advertising. She used the cash method and did not may any payments that would require filing a form 1099.
Henrietta drove her Toyota (which she purchased March 1, 2014) a total of 13,000 miles during the year of which 18,000 were business miles, 500 commuting from her home to her office, and 5,500 other personal miles. Henrietta kept detailed written records of her business use of the car but she did not keep track of her actual expenses other than business parking of $260. They also have a second car that Harry drives during the week and that Henrietta uses on weekends.
Harry and Henrietta received interest income from a joint account at Bank United in the amount of $510 reported on Form 1099-INT in box
1. They received qualified dividend income on Striker Oil stock of $480 (reported on Form 1099-DIV as $480 total dividends in Box 1a and $480 qualified dividends in Box 1b). They did not have any foreign bank accounts.
They received a Form 1099-B from Fidelity Investments reporting the following stock sale. On December 1, 2015 they sold 400 shares of Striker Oil stock for $5,000 which was reported on Form 1099-B (Box Dlong-term with basis reported). They had purchased the Striker Oil stock on October 15, 2010 for $1,850. They had no other stock sales or purchases during the year but did have a long-term capital loss carryover from last year of $970.
Harry owns 10% of the stock of EngineersCorporation, an S corporation (EIN 59-2334211) located at 10700 Kendall Drive, Miami, FL 33155. His stock basis is $2,250 and it is all at-risk. He received a Schedule K-1 reporting $1,900 on line 1 as his share of ordinary business income for 2015. He did not receive any distributions from the corporation this year. He materially participated in the business.
In May, Henrietta inherited $60,000 from her grandfather. In August, Henrietta received $50 in jury duty pay.
The Hurricane family has medical insurance that covered the entire family for the entire year that they purchased through the cafeteria plan offered by Harry's employer (on a pre-tax basis). The annual cost of this medical insurance for the entire family was $7,000. The Hurricane family paid $3,100 for prescription drugs, $2,100 to doctors, $5,000to dentists, and $1,000 to hospitals and clinics. These amounts were co-payments or amounts that were not paid for by insurance. They also paid $500 for contact lenses for Isabel that was not covered by insurance.
The Hurricane family paid $17,000 in interest on their home mortgage (which BankUnited reported to them on Form 1098 in box 1). They also paid $6,100 for real property taxes and $5,070 for homeowner's insurance on their home. Other interest and taxes paid by Harry and Henrietta include: $1,010 interest for loan on Harry's personal automobile, $420 interest on credit cards, and total general sales taxes of $2,925 for which they have receipts.
The Hurricane family made the following contributions to qualified charitable organizations (and they received receipts from the organizations):
• $2,000 (paid by check) given to the Fairchild Tropical Botanic Garden,10901 Old Cutler Road, Miami, FL33156 on February 25, 2015. This donation entitled the family to annual membership passes for the family and invitations to two special event receptions (total valued of passes and events is $250).
• A sofa and two chairs given to Goodwill, 6842 SW 40 Street, Miami, FL 33155 on April 10, 2015. They had purchased the furniture on April 18, 2013 for $700 and the fair market value (based on comparable sales in thrift shops) at the date of contribution was $160.
• Intuit stock (INTU) was given to the University of Miami Business School Scholarship Fund. The stock was purchased on February 1, 2005for $1,100. When it was donated on October 16,1 2015, it had a value of $2,960 (based on the average value of comparable sales).
Harry paid employment-related expenses that were not reimbursed by his employer:
• In September, Harry attended a business-related architecturalconference in New York. He paid a conference registration fee of $275, $350 for airfare, $700 for hotel, and $280 for meals while attending the conference.
Harry and Henrietta also paid for the following during 2015:
• Fees for preparation of their 2014 tax return of $225 paid in April 2015.
• Safe deposit box rental fee of $50 (for storage of investment securities)
Henrietta contributed $3,000 to a traditional individual retirement account on December 15, 2015. This is the first time she has contributed to an IRA.
Neither Harry nor Henrietta served in the U.S. armed forces in 2015.
Your clients (or professor) will not accept a late project (but will accept it early). Your clients (or professor) will not be able to provide you with any check figures or review your project in advance of its final submission. (Projects submitted early will not be graded in advance of the due date.)