ACT 4494 GSU Tax Return Exercises

Tax Return 2ACT 4494
FA 2023
Name: ____________________________________________________________________________
Harvey and Donna’s taxable income from this return is: $ __________________________
I worked on this return with:
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I worked for approximately _________________________hrs/min on this return.
Harvey greatly appreciates the tax estimate you prepared for him a few days ago. He has big news though (he got
married!!!), which will require some changes to the original return you did for him. Please read the new
information and make whatever changes are required to update the 2022 Form 1040 you have already prepared.
Harvey R. Specter, born April 3, 1983, is a married taxpayer who works at the law firm Pearson Hardman. He
lives at 901 20 Stewart Street, New York, New York (in the penthouse!!!). His Social Security number is 933-669999. Harvey earned $90,000 in wages and had $10,439 withheld in federal income taxes; both items were
reported to him on his W-2. He also earned $1,000 in bank interest from Goldman Sachs (at 200 West St.) on his
savings account. This amount was reported to him on his December 2022 bank statement.
Harvey married his long time, secret love, Donna Paulsen, on December 31, 2022 at 11:45pm. They would like to
file a joint return for 2022. Harvey and Donna will live in Harvey’s apartment. Donna has not changed her last
name with the Social Security Administration. Donna’s Social Security number is 944-55-8888.
Harvey provides support for a few people. He has a daughter, named Lily after his mother, with his former flame
Dana Scott. Even though he didn’t love Dana, he married her when she became pregnant so that his daughter
would not be born out of wedlock. The two were divorced soon after Lily’s birth on August 23, 2015. Their
divorce was finalized on January 1, 2016. Lily was born in New York, but currently lives in the United Kingdom
with her mother who is her custodial parent. Harvey provides more than half of Lily’s support. Harvey and Dana
are still friends and they do not have a formal agreement as to which of them claim Lily as a dependent. He also
provides support to his younger brother Marcus. Marcus lives in Boston. Harvey provides approximately one half
of Marcus’ support, which includes bailing him out of gambling debts.
Donna earned wages of $70,000 as an administrative assistant at Pearson Hardman. She had $7,384 withheld for
federal income taxes. Both items were reported to her on her W-2, along with tips of $500 given to her by one of
the firm’s clients. Since Donna’s bank does not pay interest on savings or checking accounts, she has moved her
money over to Harvey’s account. While Donna did not earn any interest on her money in the bank, her financial
news for the year wasn’t all bad. Two of her stock investments paid dividends. She received total dividends of
$286.
Donna and Harvey had a busy year. Donna had to obtain a loan of $20,000 to pay off her credit cards; Harvey
refused to pay them for her. She started out with $20,100 of debt but $5,000 of her credit card debt was forgiven
by the credit card company. She received a 1099-C from the credit card company for that amount. She is so glad
that her debt is almost clear!
Harvey found a black cloth bag full of cash in the elevator in their apartment building. He took it home and
counted it and discovered there was $8,000 in the bag! Since Harvey believed the cash likely belonged to a
criminal, he decided not to turn it in to the cops, and kept it instead.
Harvey’s father Gordon died in 2022. His insurance policy named Harvey and Marcus as beneficiaries. Each of
them received $2,000,000 from the policy. Harvey also received $50,000 in cash from his father’s estate, in
addition to the life insurance benefit; Harvey promptly put all of his inheritance into the bank.
Harvey and Marcus went on a few gambling trips during which Harvey won $11,523 dollars at the poker tables.
They went to the Turning Stone Resort Casino, a luxury establishment in central New York. Unfortunately
Marcus lost each time they went.
Since Harvey was uncertain of the amount of taxes he and Donna would owe, he made an estimated tax payment
of $6,000. They would like any refund they may receive to be deposited into their checking account. Their
account number is 321456987. They cannot remember the routing number for the bank. They would like for you,
their professional tax preparer and CPA, to deal with the IRS if needed with regards to their 2022 tax return. If
they owe money, they will send in a check to the IRS.
Please prepare Harvey and Donna’s 2022 Form 1040 and any required schedules.
The assignment should be stapled and assembled in the correct IRS order, with the attached cover sheet on the
front. Please include the names of everyone you worked with to complete the return. This assignment is due on
10/10 at 2:00pm.
All tax return assignments are to be turned in on paper with handwritten tax forms. Workpapers may be prepared
either by hand or by using Excel or Word, but the return forms should be completed by hand. Any electronic
(Word or Excel) file used to help you prepare the return should be turned in on paper with the return and
electronically through Canvas. Only the files you use to show me your work (your workpapers) are required to be
uploaded. While this can be a group assignment, each person is required to turn in their own tax return and
workpapers. If you use Excel to complete your workpapers, you MAY NOT copy another student’s file.
I would highly recommend using the Form 1040 instructions to help with the forms if you have questions about
what goes on what line. I expect that while completing this return you will need to perform some research. You
may even need to go outside of your textbook. If you do so, please remember to cite your sources. Tax returns
also require some critical thinking. While facts have been given to you, you may need to interpret those facts or
make assumptions. Please document any assumptions you make to complete the return. If you feel that you are
missing required information, please let me know and I will ask the client for you.