-
Karl Frederickson is employed as a human resources manager for Toys Unlimited, Inc., and Ellie is a financial planner for her mother's company, Frederickson Investments, Inc., a full service wealth planning firm. They provide the following information:
-
They both want to contribute to the presidential election campaign.
-
They live at 9876 Fighting Irish Lane, South Bend, IN.
-
Karl's birthday is 7/17/1965 and his Social Security number is 555-12-6789.
-
Ellie's birthday is 9/11/1967 and her Social Security number is 987-65-4321.
-
Karl or Ellie do not have any foreign bank accounts or trusts.
-
Karl received a Form W-2 from Toys Unlimited, Inc. that contained the following information:
| • |
Line 1 Wages, tips, other compensation: |
$45,000 |
| • |
Line 2 Federal income tax withheld: |
7,500 |
| • |
Line 3 Social Security wages: |
45,000 |
| • |
Line 4 Social Security tax withheld: |
1,890 |
| • |
Line 5 Medicare wages and tips: |
45,000 |
| • |
Line 6 Medicare tax withheld: |
653 |
| • |
Line 17 State income tax: |
2,200 |
-
Ellie received a Form W-2 from Frederickson Investments, Inc. that contained the following information:
| • |
Line 1 Wages, tips, other compensation: |
$85,000 |
| • |
Line 2 Federal income tax withheld: |
12,500 |
| • |
Line 3 Social Security wages: |
85,000 |
| • |
Line 4 Social Security tax withheld: |
3,570 |
| • |
Line 5 Medicare wages and tips: |
85,000 |
| • |
Line 6 Medicare tax withheld: |
1,233 |
| • |
Line 17 State income tax: |
4,200 |
Page C-3
-
Karl and Ellie incurred the following medical expenses for the year:
| • |
Transportation to Chicago for Karl's cancer treatment: |
2,000 miles |
| • |
Unreimbursed hospital charges for Karl: |
$6,500 |
| • |
Unreimbursed prescription drug charges for Karl and Ellie: |
1,750 |
| • |
Unreimbursed physician charges for Karl and Ellie: |
2,200 |
| • |
Unreimbursed prescription glasses for Ellie: |
150 |
| • |
Laser hair treatment for Ellie (so that she will no longer need to shave her legs) |
2,000 |
-
Karl and Ellie paid $12,000 of interest payments on their primary residence (acquisition debt of $225,000). They also paid $1,750 of interest expense on Ellie's car loan and $500 of interest on their Visa card.
-
Karl and Ellie paid $4,000 of real estate taxes on their home and $1,000 of real estate tax on a vacant lot they purchased with the hope of building their dream home in the future. They also paid $3,000 in sales tax on Ellie's car and other purchases and $1,000 of ad valoreum tax on their cars.
-
Karl and Ellie made the following contributions this year:
| • |
American Red Cross |
$?200 |
| • |
United Way |
150 |
| • |
St. Joseph's Catholic Church |
8,000 |
| • |
Food for the family of Hannah Barbara (a neighbor who suffered a tragic car accident this past year). |
225 |
| • |
Stock transfer to the University of Notre Dame (originally purchased for $1,000 in 2005) |
750 |
-
Karl incurred $4,000 of unreimbursed meals and entertainment related to his job. Ellie incurred $1,200 of expenses for investment publications, and last year they paid their CPA $500 to prepare their tax return.
-
The roof on Karl and Ellie's house was severely damaged in a hail storm. They had to replace the roof ($7,500), which unfortunately was not covered by insurance because of their high deductible ($10,000).
-
Karl won $5,000 in the state lottery. He has been playing the lottery for years ($10 in lottery tickets every week ($520 in total) that he saves to keep track of the numbers he plays).