Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social Security numbers are 123-45-6789…

Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social Security numbers are 123-45-6789 and 111-11-1111 respectively. Alices birthday is September 21 1960 and Bruces is June 27 1959. They live at 473 Revere Avenue. Ames MA 01850. Alice is the office manager for Ames Dental Clinic 433 Broad Street Ames Ma 01850(employer identification number 98-765432). Bruce is the manager of a Super Burger fast-food outlet owned and operated by Plymouth Corporation 1247 Central Avenue Hauppauge NY 11788 (employer identification number 11-1111111).The following information is shown on their Wage and Tax Statements ( Form W-2) for 2007.
Line Description Alice Bruce1 Wages tips other compensation $58000 $621002 Federal income tax withheld 4500 63003 Social Security wages 58000 621004 Social Security tax withheld 3596 38505 Medicare wages and tips 58000 621006 Medicare tax withheld 841 90015 State Massachusetts Massachusetts16 State wages tips etc. 58000 6210017 State income tax withheld 2950 3100
The Byrds provide over half of the support of their two children Cynthia (born January 25 1983 Social Security number 123-45-6788) and John (born February 7 1987 social Security number 123-45-6786. Both children are full-time students and live with the Byrds except when they are away at college. Cynthia earned $4200 from a summer internship in 2007 and John earned $3800 from a part-time job.
During 2007 the Byrds furnished 60% of the total support of Bruces widower father Sam Byrds ( born March 6 1931 Social Security number 123-45-6787). Sam lived alone and covered the rest of his support with Social Security benefits. Sam died in November and Bruce the beneficiary of a policy on Sams life received life insurance proceeds of $800000 on December 28.The Byrds had the following expenses relating to their personal residence during 2007:
Property taxes $5000Qualified interest on home mortgage 8800Repairs of roof 5750Utilities 4100Fire and theft insurance 1900
The following facts relate to medical expenses for 2007:
Medical insurance premiums $4500Doctor bill for Sam incurred in 2006 and not paid until 2007 7600Operation for Sam 8500Prescription medicines for Sam 900Hospital expenses for Sam 3500Reimbursement from insurance company received in 2007 3600
The medical expenses for Sam represent most of the 60% Bruce contributed toward his fathers support.
Other relevant information follows:
When they filed their 2006 state return in 2007 the Byrds paid additional state income tax of $900. During 2007 Alice and Bruce attended a dinner dance sponsored by the Ames police Disability Association ( a qualified charitable organization). The Byrds paid $300 for the tickets. The cost of comparable entertainment would normally be $50. The Byrds contributed $5000 to Ames Presbyterian Church and gave used clothing (cost of $1200 and fair market value of $350) to the Salvation Army. All donations are supported by receipts and are in very good condition. In 2007 the Byrds received interest income of $2750 which was reported on a Form 1099-INT from Second National Bank. Alices employer requires that all employees wear uniforms to work. During 2007 Alice spent $450 on new uniforms and $225 on laundry charges. Bruce paid $400 for an annual subscription to the Journal of Franchise Management. Neither Alices nor Bruces employer reimburses for employee expenses. The Byrds do not keep the receipts for the sales taxes they paid and had no major purchases subject to sales tax. Alice and Bruce paid no estimated Federal income tax. Neither Alice nor Bruce wishes to designate $3 to the Presidential Election Campaign Fund.
Part 1 – Tax ComputationCompute net tax payable or refund due for Alice and Bruce Byrd for 2007. If they have overpaid they want the amount to be refunded to them. If you use tax forms for your computations you will need Forms 1040 Schedules A B and Form 2106.
Part 2-Tax PlanningAlice and Bruce are planning some significant changes for 2008.They have provided you with the following information and asked you to project their taxable income and tax liability for 2008.
The Byrds will invest the $800000 of life insurance proceeds in short term certificates of deposit(CD) and use the interest for living expenses during 2008. They expect to earn total interest of $32000 on the CDs.
Bruce has been promoted to regional manager and his salary for 2008 will be $88000.He estimates that state income tax withheld will increase by $4000.
Alice Who has been diagnosed with a serious illness will take a leave of absence from work during 2008. The estimated cost for her medical treatment is $15400 of which $4700 will be reimbursed by theirInsurance company in 2008. Their medical insurance premiums will increase to $5000.
John will graduate from college in December 2007 and will take a job in New York City in January 2008.His starting salary will be $46000.
Assume All the information reported in 2007 will be the same in 2008 unless other information has been
presented above.
So I need FORM 1040 Sch. A& B and FORM 2106..Please enter all the numbers inside the form Dont worry about name or ss..etc.I just need the correct AGI itemized deduction exemption Taxable income and taxes.etc for part 1 and part 2.Check figures:Part 1AGI 122850.Taxable income 70714..Tax 10529
Part 2AGI 122750.Taxable income 82756.Tax 13337
So those numbers are accurate %100