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(solution) Matthew received Form 1095-A from the Marketplace. How is this


 Matthew received Form 1095-A from the Marketplace. How is this information used on his tax return?

Matthew must repay a portion of the advance premium tax credit that he received.

What is the total amount of qualified educational expenses used in the calculation of Matthew?s American opportunity credit? $________. 



Advanced Scenario 5: Matthew Clark

 

Directions

 

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario.

 

Note: When using the Link & Learn Taxes Practice Lab, complete the Social Security

 

numbers and employer identification numbers by replacing the Xs with your User ID.

 

In classroom situations, replace the Xs with the numbers provided by your instructor.

 

Complete Form 1040 and the appropriate forms, schedules, and worksheets to answer

 

each of the following questions. Interview Notes

 

? In September 2015, Matthew enrolled in college to pursue a bachelor?s degree. He

 

had no other post-secondary education. Brown College is a qualified educational

 

institution.

 

? Matthew does not have a felony drug conviction.

 

? Matthew brought a Form 1098-T and an account statement from the college. The

 

Form 1098-T includes the amount billed for the Spring 2016 semester. Matthew has

 

not yet paid this amount.

 

? The terms of Matthew?s scholarship require that it be used to pay for tuition.

 

? Matthew took a distribution from his IRA to pay for some of his education expenses.

 

All his IRA contributions were deductible in the year he made them.

 

? For the purposes of this scenario, assume Matthew lives in the lower 48 states.

 

? Matthew underestimated his 2015 income when he purchased insurance through

 

the Marketplace.

 

? Matthew purchased minimum essential health care coverage through the

 

Marketplace.

 

? Matthew was solvent at the time the credit card debt was cancelled. Advanced Scenarios 67 68 Advanced Scenarios Advanced Scenarios 69 70 Advanced Scenarios Advanced Scenarios 71 72 Advanced Scenarios Advanced Scenarios 73 74 Advanced Scenarios Advanced Scenarios 75 Advanced Scenario 6: Kelly Floyd

 

Directions

 

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario.

 

Note: When using the Link & Learn Taxes Practice Lab, complete the Social Security

 

numbers and employer identification numbers by replacing the Xs with your User ID. In

 

classroom situations, replace the Xs with the numbers provided by your instructor. Interview Notes

 

? Kelly?s husband died in March 2012. She has not remarried.

 

? Kelly provided the entire cost of maintaining the household and all the support for

 

her children, Mia and Logan, in 2015.

 

? Her younger brother, Brian, is permanently and totally disabled. He received disability income which he used to provide more than half of his own support.

 

? Kelly lost her job in December 2014. She received unemployment for two months in

 

2015 until she found a new job.

 

? While she was unemployed, she cashed in her 401(k) savings from her previous

 

employer and used the money for household expenses. She does not qualify for any

 

exception to the additional tax on early distributions.

 

? Mia and Logan attended day care while Kelly worked.

 

? Kelly, Mia, and Logan had health insurance that provided minimum essential

 

coverage (MEC) through her new employer beginning on March 1, 2015. She and

 

the children did not have MEC for January and February. Brian had MEC all year.

 

None of them purchased insurance through the Marketplace. Advanced Scenarios 77 78 Advanced Scenarios Advanced Scenarios 79 80 Advanced Scenarios Advanced Scenarios 81 82 Advanced Scenarios Advanced Scenarios 83 Advanced Scenario 7: Elliot and Kathy Blackburn

 

Directions

 

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario.

 

Note: When using the Link & Learn Taxes Practice Lab, complete the Social Security

 

numbers and employer identification numbers by replacing the Xs with your User ID. In

 

classroom situations, replace the Xs with the numbers provided by your instructor. Interview Notes

 

? Elliot retired and began receiving retirement income on March 1, 2015. No

 

distributions were received prior to his retirement. Elliot did not select a joint survivor

 

annuity for these payments.

 

? Elliot brought last year?s tax return. It includes a capital loss carryover worksheet.

 

? Elliot and Kathy want to file a joint return. They provided all the cost of keeping up

 

the home and all of the support for their son Carter.

 

? Elliot had Medicare Part A and Part B health coverage all year. Kathy and Carter did

 

not have health insurance at all for 2015.

 

? Kathy and Carter do not qualify for any health insurance coverage exemptions.

 

? Carter has no filing requirement. Advanced Scenarios 85 86 Advanced Scenarios Advanced Scenarios 87 88 Advanced Scenarios Advanced Scenarios 89 90 Advanced Scenarios Advanced Scenarios 91 92 Advanced Scenarios Advanced Scenarios 93 94 Advanced Scenarios Advanced Scenario 8: Enrique Clayton

 

Directions

 

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario.

 

Note: When using the Link & Learn Taxes Practice Lab, complete the Social Security

 

numbers and employer identification numbers by replacing the Xs with your User ID. In

 

classroom situations, replace the Xs with the numbers provided by your instructor. Interview Notes

 

? Enrique works as a customer service employee during the day. He also has a business as a personal trainer. After work, he travels to teach classes at the gym five

 

days a week.

 

? Enrique is a cash-basis taxpayer who materially participates in the operation of his

 

business. He did not make any payments that would require him to file Form 1099.

 

Enrique uses business code 713900.

 

? He received Form 1099-MISC for classes he taught at the gym. He had an additional $3,729 cash income in tips and payments from individual clients.

 

? He has a written mileage log showing the following miles for 2015. All his travel is

 

within his local commuting area.

 

? 3,750 miles from home to his main job

 

? 2,750 miles from his main job to the gym

 

? 1,200 miles from the gym each day to his home

 

? The total mileage on his car for 2015 was 11,000 miles. He placed his car in service

 

on January 6, 2010. He always takes the standard mileage rate. This is Enrique?s

 

only car and it was available for personal use.

 

? Enrique has records for other expenses relating to his business:

 

? Advertising: $300

 

? Supplies: $1,000

 

? Nutritional supplements for his own consumption: $675

 

? Business liability insurance: $610

 

? Business license: $150

 

? Enrique has a statement from his church stating he donated $500 in 2015.

 

? Enrique has receipts for an eye exam for $80 and prescription contact lenses for

 

$300.

 

? This year, Enrique will deduct state income tax on Schedule A. Last year, he

 

deducted state sales tax instead of state income tax.

 

? Enrique?s school loan was for qualified education expenses at an eligible institution. 96 Advanced Scenarios ? Enrique has never taken a distribution from a retirement account and he was not a

 

full-time student during 2015.

 

? Enrique has health insurance through his employer that qualifies as minimum

 

essential coverage. Advanced Scenarios 97 98 Advanced Scenarios Advanced Scenarios 99 100 Advanced Scenarios Advanced Scenarios 101 102 Advanced Scenarios Advanced Scenarios 103

 


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