Southern Illinois University Tax Returns Problem Schedule Paper

Question Description


Carlos and Maria Gomez live in Lubbock, Texas.The Gomez’s have three children: Luis (age 15), Amanda (age 13) and Joe (born in January 2019).All three children qualify as federal income tax dependents of Carlos and Maria.The Gomez’s provided the following information:

  • Joe’s social security number is 589-74-2833(See prior return for other SS#s)
  • The Gomez’s current mailing address is still 543 West La Patera, Lubbock, Texas 79401

Carlos was laid off from his previous job and received $10,000 of unemployment compensation.

Carlos made 15,000 as an independent contractor with no expenses related to his job before he decided to stay home with the kids. (SCHEDULE C and Schedule SE)

Maria’s bookkeeping service took off after she completed her MSA passed the CPA exam.She had the following income and expenses: (SCHEDULE C & SCHEDULE SE…Maria and Carlos will each have their own schedule C and SE, so you will have 2 of each of these forms)


Accounting Income$ 120,000



Office Supplies$2,000

Rent (She no longer uses a home office)$12,000

Professional Insurance$4,000


Business Travel$6,000

Total Expenses$35,000

No form 1099s were required to be filed.

Carlos and Maria had $6,000 of childcare expenses in 2018 for the baby from DAYAWAY Childcare at 911 Helpme St., Lubbock Texas.FEIN 43-4564564 (Form 2441)

Maria won the Showcase Showdown on the Price is Right.She received $10,000 in cash and a new boat worth $35,000. (SCHEDULE 1)

Maria also taught on-line courses for a local college and received a w-2.  (FORM 1040)

Investment Income

Carlos and Maria had the following interest income listed on the appropriate line of form 1099 from the following sources: (SCHEDULE B)

First Bank of Texas$275

U.S. Treasury Bonds$175

Rio Tinto Minerals$800

Grand Junction City Bonds$ 3,500

Carlos and Maria had the following dividend income listed on the appropriate line of form 1099 from the following sources:(All were qualified dividends.) (SCHEDULE B)

General Mills $ 1,850

Sysco Corporation$600

Tyco Intergrated Security$500

The J.M. Smucker Co.$700

IBM Stock$ 4,000

Carlos and Maris sold the following stocks:

Sales PurchaseSale

SecurityDateDate Price Basis 

Grand Junction Bonds03/14/19 10/31/14$2,400  3,000

Big Splash 03/18/19 06/19/18$9,5005,000

Tesla07/21/19 09/15/08$18,000  7,500


Other Income

Carlos and Maria also use Air BNB to occasionally rent out Maria’s old office which they converted to a guest suite.The guest suite does not have its own entrance or kitchen facilities.They made $3,500 renting the guest suite for 70 days in 2018.The rest of the time they used the space themselves.(SCHEDULE E – IF REQUIRED)

Carlos and Maria continue to rent out El Mar unit.It was rented for the entire year with no vacancies. (SCHEDULE E)

Rental revenue$14,000

HOA fee expense$1,200

Property taxes paid$800

Utilities expense$1,650

Liability and hazard insurance$2,000


Tax Depreciation$500

(Do not do Form 4562)

Information for Itemized Deductions

Carlos and Maria received a form 1098 from the First Bank of Texas related to the mortgage on their primary home.The following information was reported:(Schedule A)

Mortgage interest expense$17,500

Real Estate Taxes$11,000

On May 20, 2018, Carlos and Maria contributed clothing, furniture and a coin collection to the Salvation Army.The original cost of the clothing was $3,000. They received a statement from the Salvation Army valuing the donation at $750. The Salvation Army is located at 350 Stone Ridge Road, Lubbock, TX 79401.In addition, they made the following cash contributions and received a statement from each of the above organizations acknowledging her contribution.(SCHEDULE A and FORM 8283)


United Way (501( C)(3))  3,000

First Methodist Church  2,500

Democratic National Convention (Carlos)250

Republican National Convention (Maria) 250

Alliance for Nuclear Responsibility (501( C)(3))    1,200

The Gomezes paid the following medical expenses during the year:

Dentist Checkups & Cavities (unreimbursed by insurance)$4,000

Orthodontist$ 12,000

Chiropractor (unreimbursed by insurance)$3,500

Prescriptions (unreimbursed by insurance)$ 425


Fertility Treatments$ 15,000

Cosmetic Surgery (tummy tuck)$8,000



Other Expenses

Vehicle property tax based upon value$ 1,950


Other Information for Personal Tax Return

The Gomez’s made timely federal estimated tax payments for the 2019 tax year of $30,000.

The Gomez’s want to contribute to the Presidential Election Campaign Fund.The Gomez’s would like to receive a refund (if any) of tax they may have overpaid for the year.Their preferred method of receiving the refund is by check.