After preparing the financials and corporate tax return for Bill’s Bakery Inc. for 2017, Bill provides you with the following information for his personal return.

Bill (ss#010-your tax id) is 47 and is married to Betty (ss#020-your tax id) who retired from her job as a school teacher at age 46 after 23 years of service. Although she is too young to collect social security, she does collect a pension and works as a self-employed tutor.

Betty received a 1099-R and 1099-MISC from the North Providence School Department and additional payments of $1,500 from other students that she tutored. Her expenses related to this business include: $100 for advertising and $400 for supplies. She used her 2015 Volvo V70 to drive to schools and students houses and has records showing 1,200 business related miles. She put total of 13,200 miles on her car for the year.

Bill and Betty have 2 children and Betty’s mother Mary Muffin also lives with them.

Their information is listed below:

Bobby Baker, age 14, SS# 333- your tax id

Bethany Baker, age 12, SS#555- your tax id

Mary Muffin, age 78 SS#111- your Tax id. Her only income is social security of $9,000.

(You must determine if she qualifies as their dependent, but do not have to do her taxes)

Bill and Betty paid mortgage interest of $6,200, real estate taxes of $2,200 and excise taxes on their vehicles of $600. They made qualified charitable contributions of $800 cash and also donated clothes to the Salvation Army on Smith Street in No. Providence on 6/30/14. The closed were originally purchased for $2,000 and had a thrift store value of $900 at the time of the donation. They have receipts for the donations.

They each contributed $1,000 to traditional IRAs and Betty took a course on “Developing Math Skills in Students” at the local college at a cost of $1,150 and has received a 1098-T. Bill also provides you with his W-2 and other 1099s that they received.

Required:

• 1)Prepare Bill and Betty’s 2017 Federal Income Tax return, filling in and printing out all required forms.
• 2)Provide Bill and Betty with a letter explaining their 2017 tax return (ex. AGI, Tax Liability or Refund etc…) and any advice on what they might do in the upcoming year. (you can also give them a bill for your services if you want)

**Please make sure you put your own name is the c/o address field.

**You must prepare the return using some type of tax software.

You can access on line tax software through the IRS Link and Learn Practice Lab from any computer by using the password TRAINPROWEB and setting up a User Id, but you will have to use the tax id they give you instead of the number on the documents at the end of the tax id #s. Also, you will not be able to print it so you will have to include your user id and zip code on your grading sheet so I can review it. HRBlock is also on our university computers and you can save the file and email it to yourself so you can finish it on another computer if you have to. You will then need to print a hard copy of the return for me to grade.

Tax Forms:

Attached Files:

• FIRSTBANK1099INT.pdf (247.15 KB)
• NORTHPROVIDENCESCHOOLDEPT1099R.pdf (334.964 KB)
• NORTHPROVIDENCESCHOOLDEPT1099MISC.pdf (251.494 KB)
• BILLSBAGELSHOPDIV.pdf (258.082 KB)
• BILLSBAGELSHOPW2.pdf (337.705 KB)
• Copy of List of TaxForms(Complete Sp18).xlsx (16.027 KB)