This discussion will include the forms used for the Peterson’s tax return and why they were used. We will also discuss the 1040 and how it is composed of five main sections that are income, adjusted Gross income, Tax, and credits, other taxes, and payments. These five sections will help determine the amount owed is refunded to you.
The Petersons tax return
When doing Harold and Sarah Peterson tax return, I choose to use 1040 because they had a home sale so I could not use any other 1040 form. Schedule A was also selected because it gave the Peterson’s the highest deduction. The sale of their home was inputted on Sale of Home Gain or loss, exclusion, and taxable gain worksheet. Had they not lived there it would not be excluded and would have pulled to Schedule D. Form 2441 was completed for their childcare cost that was paid for the year. The making it work credit was also calculated on Schedule M for the Peterson’s. With all the forms and information completed the Peterson’s will be collecting a refund of $1384.
Filing Status and Exemptions
The first two sections of the 1040 are filing status and exemption portion although these sections are quite small, they should be discuss because the way they are filled out will play a part and how the 1040 is filled out. Filing status of a taxpayer depends on their situation from the previous year, the different options available are Single, married filing a jointly, married filing separately, head of household, and qualifying widower. When filing taxes, if the taxpayer choices standard deduction, the filing status is important in arriving at that amount. Another important item in lower ones AGI is personal exemptions. In computing taxable income, taxpayers can deduct an exemption amount from AGI for each personal and dependency exemption the taxpayer receives an exemption for themselves, their spouse, and each dependent (Cruz,...