Project1.docx

Note: This problem is for the 2021 tax year.

Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social Security numbers are 123-45-6784 and 111-11-1113, respectively. Alice's birthday is September 21, 1974, and Bruce's is June 27, 1973. They live at 473 Revere Avenue, Lowell, MA 01850. Alice is the office manager for Lowell Dental Clinic, 433 Broad Street, Lowell, MA 01850 (Employer Identification Number 98-7654321). Bruce is the manager of a Super Burgers 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 2021.

Line	Description	Alice	Bruce
1	Wages, tips, other compensation	$58,000	$62,100
2	Federal income tax withheld	4,500	5,300
3	Social Security wages	58,000	62,100
4	Social Security tax withheld	3,596	3,850
5	Medicare wages and tips	58,000	62,100
6	Medicare tax withheld	841	900
15	State	Massachusetts	Massachusetts
16	State wages, tips, etc.	58,000	62,100
17	State income tax withheld	2,950	3,100

The Byrds provide over half of the support of their two children, Cynthia (born January 25, 1997, Social Security number 123-45-6788) and John (born February 7, 2001, Social Security number 123-45-6780). Both children are full-time students and live with the Byrds except when they are away at college. Cynthia earned $6,200 from a summer internship in 2021, and John earned $3,800 from a part-time job. Both children received scholarships covering tuition and materials.

During 2021, the Byrds provided 60% of the total support of Bruce's widower father, Sam Byrd (born March 6, 1945, Social Security number 123-45-6787). Sam lived alone and covered the rest of his support with his Social Security benefits. Sam died in November, and Bruce, the beneficiary of a policy on Sam's life, received life insurance proceeds of $1,600,000 on December 28.

The Byrds had the following expenses relating to their personal residence during 2021:

Real estate property taxes	$5,000
Qualified interest on home mortgage (acquistion indebtedness)	8,700
Repairs to roof	5,750
Utilities	4,100
Fire and theft insurance	1,900

The Byrds had the following medical expenses for 2021:

Medical insurance premiums	$4,500
Doctor bill for Sam incurred in 2020 and not paid until 2021	7,600
Operation for Sam	8,500
Prescription medicines for Sam	900
Hospital expenses for Sam	3,500
Reimbursement from insurance company, received in 2021	3,600

The medical expenses for Sam represent most of the 60% that Bruce contributed toward his father's support.

Other relevant information follows:

· When they filed their 2020 state return in 2021, the Byrds paid additional state income tax of $900.

· During 2021, Alice and Bruce attended a dinner dance sponsored by the Lowell 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 $5,000 to Lowell Presbyterian Church and gave used clothing (cost of $1,200 and fair market value of $350) to the Salvation Army. All donations are supported by receipts, and the clothing is in very good condition.

· Via a crowdfunding site (gofundme.com), Alice and Bruce made a gift to a needy family who lost their home in a fire ($400). In addition, they made several cash gifts to homeless individuals downtown (estimated to be $65).

· In 2021, the Byrds received interest income of $2,750, which was reported on a Form 1099–INT from Second National Bank, 125 Oak Street, Lowell, MA 01850 (Employer Identification Number 98-7654322).

· The home mortgage interest was reported on Form 1098 by Lowell Commercial Bank, P.O. Box 1000, Lowell, MA 01850 (Employer Identification Number 98-7654323). The mortgage (outstanding balance of $425,000 as of January 1, 2021) was taken out by the Byrds on May 1, 2017.

· Alice's employer requires that all employees wear uniforms to work. During 2021, Alice spent $850 on new uniforms and $566 on laundry charges.

· Bruce paid $400 for an annual subscription to the Journal of Franchise Management and $741 for annual membership dues to his professional association.

· Neither Alice's nor Bruce's 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.

· This year the Byrds gave each of their children $2,000, which was then deposited into their Roth IRAs.

· Alice and Bruce paid no estimated Federal income tax, and they did not engage in any virtual currency transactions during the year. Neither Alice nor Bruce wants to designate $3 to the Presidential Election Campaign Fund. The Byrds received the appropriate recovery rebates (economic impact payments); related questions in ProConnect Tax should be ignored.

Required:

Compute net tax payable or refund due for Alice and Bruce Byrd for 2021. If they have overpaid, they want the amount to be refunded to them.

· Make realistic assumptions about any missing data.

· If an amount box does not require an entry or the answer is zero, enter "0".

· Enter all amounts as positive numbers.

· It may be necessary to complete the tax schedules before completing Form 1040.

· When computing the tax liability, do not round your immediate calculations. If required, round your final answers to the nearest dollar.

· Use the Tax Rate Schedule provided. Do not use the Tax Tables. Note: for the Tax Planning section only, use the 2022 Tax Rate Schedule found in Appendix A of the textbook.

Form 1040

Question Content Area

Complete the Byrd's Form 1040 for 2021.

Form

1040

Department of the Treasury — Internal Revenue Service (99) U.S. Individual Income Tax Return

2021

OMB No. 1545-0074

IRS Use Only

Filing Status
Your first name and middle initial Bruce M. Byrd	Last name	Your social security number111-11-1113
If joint return, spouse's first name and middle initial Alice J. Byrd	Last name	Spouse's social security number 123-45-6784
Home address (number and street). If you have a P.O. box, see instructions. 473 Revere Avenue	Apt. no.	Presidential Election CampaignDo you, or your spouse if filing jointly, want $3 to go to this fund. Selecting an option below will not change your tax or refund.
City, town, or post office. If you have a foreign address, also complete spaces below. Lowell, MA 01850	State	ZIP code
Foreign country name	Foreign province/state/county	Foreign postal code

At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?

Standard Deduction

Someone can claim:

Age/Blindness

You:

Spouse:

DependentsIf more than four dependents, see instructions and check here ► ◻	(see instructions):	(2) Social securitynumber	(3) Relationshipto you	(4) ✓ if qualifies for (see instructions):
	(1) First name	Last name			Child tax credit	Credit for other dependents
	John Byrd		123-45-6780	Child
	Sam Byrd		123-45-6787	Parent
				◻	◻
				◻	◻

AttachSch. B ifrequired.	1	Wages, salaries, tips, etc. Attach Form(s) W-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1	fill in the blank b944f30a003cff1_11
	2a	Tax-exempt interest . .	2a		b	Taxable interest . . . . . . . . . .	2b	fill in the blank b944f30a003cff1_12
	3a	Qualified dividends . . .	3a		b	Ordinary dividends . . . . . . . .	3b
	4a	IRA distributions . . . . .	4a		b	Taxable amount . . . . . . . . . .	4b
	5a	Pensions and annuities	5a		b	Taxable amount . . . . . . . . . .	5b
Standard Deduction for– · Single or Married filing separately, $12,550 · Married filing jointly or Qualifying widow(er), $25,100 · Head of household, $18,800 · If you checked any box under Standard Deduction, see instructions.	6a	Social security benefits	6a		b	Taxable amount . . . . . . . . . .	6b
	7	Capital gain or (loss). Attach Schedule D if required. If not required, check here . . . ► ◻	7
	8	Other income from Schedule 1, line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
	9	Add lines 1, 2b, 3b, 4b, 5b, 6b, 7, and 8. This is your total income . . . . . . . . . . . . . . ►	9	fill in the blank b944f30a003cff1_13
	10	Adjustments to income from Schedule 1, line 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
	11	Subtract line 10 from line 9. This is your adjusted gross income . . . . . . . . . . . . . . ►	11	fill in the blank b944f30a003cff1_14
	12a	Standard deduction or itemized deductions (from Schedule A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12a	fill in the blank b944f30a003cff1_15
	b	Charitable contributions if you take the standard deduction (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12b
	c	Add lines 12a and 12b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12c	fill in the blank b944f30a003cff1_16
	13	Qualified business income deduction from Form 8995 or Form 8995-A . . . . . . . . . . . . .	13
	14	Add lines 12c and 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14	fill in the blank b944f30a003cff1_17
	15	Taxable income. Subtract line 14 from line 11. If zero or less, enter -0- . . . . . . . . . . . .	15	fill in the blank b944f30a003cff1_18

BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions.

Form 1040 (2021)

Form 1040 (2021)

Bruce M. and Alice J. Byrd

111-11-1113

Page 2

	16	Tax (see instructions). Check if any from Form(s): 1 ◻ 8814 2 ◻ 4972 3 ◻ . .	16	fill in the blank b944f30a003cff1_19
	17	Amount from Schedule 2, line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
	18	Add lines 16 and 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18	fill in the blank b944f30a003cff1_20
	19	Nonrefundable child tax credit or credit for other dependents from Schedule 8812 . . . .	19	fill in the blank b944f30a003cff1_21
	20	Amount from Schedule 3, line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
	21	Add lines 19 and 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21	fill in the blank b944f30a003cff1_22
	22	Subtract line 21 from line 18. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . .	22	fill in the blank b944f30a003cff1_23
	23	Other taxes, including self-employment tax, from Schedule 2, line 21 . . . . . . . . . . . . . .	23
	24	Add lines 22 and 23. This is your total tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ►	24	fill in the blank b944f30a003cff1_24
	25	Federal income tax withheld from: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
	a	Form(s) W-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25a	fill in the blank b944f30a003cff1_25
	b	Form(s) 1099 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25b
	c	Other forms (see instructions) . . . . . . . . . . . . . . . . . . . . . .	25c
	d	Add lines 25a through 25c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25d	fill in the blank b944f30a003cff1_26
If you have a qualifying child, attach Sch. EIC.	26	2021 estimated tax payments and amount applied from 2020 return . . . . . . . . . . . . . .	26
	27a	Earned income credit (EIC) . . . . . . . . . . . . . . . . . . . . . . . . .	27a
		Check here if you were born after January 1, 1998, and before January 2, 2004, and you satisfy all the other requirements for taxpayers who are at least age 18, to claim the EIC. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ► ▢

	b	Nontaxable combat pay election . .	27b
	c	Prior year (2019) earned income . .	27c
	28	Refundable child tax credit or additional child tax credit from Schedule 8812 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28
	29	American opportunity credit from Form 8863, line 8 . . . . . . . .	29
	30	Recovery rebate credit. See instructions . . . . . . . . . . . . . . . .	30
	31	Amount from Schedule 3, line 15 . . . . . . . . . . . . . . . . . . . . .	31
	32	Add lines 27a and 28 through 31. These are your total other payments and refundable credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ►	32
	33	Add lines 25d, 26, and 32. These are your total payments . . . . . . . . . . . . . . . . . . . ►	33	fill in the blank b944f30a003cff1_27

Refund

If line 33 is more than line 24, subtract line 24 from line 33. This is the amount you overpaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

fill in the blank b944f30a003cff1_28

35a

Amount of line 34 you want refunded to you. If Form 8888 is attached, check here ► ◻

35a

fill in the blank b944f30a003cff1_29

Direct deposit?

► b

Routing number

► c Type: ◻ Checking ◻ Savings

See instructions.

► d

Account number

Amount of line 34 you want applied to your 2022 estimated tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ►

AmountYou Owe

Amount You Owe. Subtract line 33 from line 24. For details on how to pay, see instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ►

Estimated tax penalty (see instructions) . . . . . . . . . . . . . . ►

Third Party Designee

Do you want to allow another person to discuss this return with the IRS? See instructions. ►

▢ Yes. Complete below.☒ No

Designee'sname ►

Phoneno. ►

Personal identificationnumber (PIN) ►

SignHereJoint return? See instructions. Keep a copy for your records.

Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

►

Your signature

Date

Your occupation Manager

If the IRS sent you an Identity Protection PIN, enter it here
(see inst.) ►

Spouse's signature. If a joint return, both must sign.

Date

Spouse's occupation Manager

If the IRS sent your spouse an Identity Protection PIN, enter it here
(see inst.) ►

Phone no.

Email address

Paid Preparer Use Only	Preparer's name	Preparer's signature Self-Prepared	Date	PTIN	Check if:◻ Self-employed
	Firm's name ►	Phone no.
	Firm's address ►	Firm's EIN ►

Go to for instructions and the latest information.

Form 1040 (2021)

Schedule A

Question Content Area

Complete Alice and Bruce Byrd's Schedule A for 2021.

SCHEDULE A (Form 1040)Department of the Treasury Internal Revenue Service (99)

Itemized Deductions

► Go to for instructions and the latest information.

► Attach to Form 1040 or 1040-SR.

Caution: If you are claiming a net qualified disaster loss on Form 4684, see the instructions for line 16.

OMB No. 1545-0074

2021

AttachmentSequence No. 07

Name(s) shown on Form 1040 or 1040-SR Bruce M. and Alice J. Byrd

Your social security number

111-11-1113

		Caution: Do not include expenses reimbursed or paid by others.
Medical and Dental Expenses	1	Medical and dental expenses (see instructions) . . . . . . . . . .	1	fill in the blank c95ffd002018034_1
	2	Enter amount from Form 1040 or 1040-SR, line 11. . . . . . . . . . . . . . . . . . . . . .	2	fill in the blank c95ffd002018034_2
	3	Multiply line 2 by 7.5% (0.075) . . . . . . . . . . . . . . . . . . . . . .	3	fill in the blank c95ffd002018034_3
	4	Subtract line 3 from line 1. If line 3 is more than line 1, enter -0- . . . . . . . . . . . . . . . . .	4	fill in the blank c95ffd002018034_4
Taxes You Paid	5	State and local taxes.
	a	State and local income taxes or general sales taxes. You may include either income taxes or general sales taxes on line 5a, but not both. If you elect to include general sales taxes instead of income taxes, check this box . . . . . . . . . . . . . . . . . . . ► ◻
			5a	fill in the blank c95ffd002018034_5
	b	State and local real estate taxes (see instructions) . . . . . . . . .	5b	fill in the blank c95ffd002018034_6
	c	State and local personal property taxes . . . . . . . . . . . . . . . .	5c	fill in the blank c95ffd002018034_7
	d	Add lines 5a through 5c . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5d	fill in the blank c95ffd002018034_8
	e	Enter the smaller of line 5d or $10,000 ($5,000 if married filing separately) . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5e	fill in the blank c95ffd002018034_9
	6	Other taxes. List type and amount ► _ _ _ _ _ _ _ _ _ _ _ _ _ _
		_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _	6	fill in the blank c95ffd002018034_10
	7	Add lines 5e and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7	fill in the blank c95ffd002018034_11
Interest You Paid Caution:Your mortgage interest deduction may be limited (see instructions).	8	Home mortgage interest and points. If you didn't use all of your home mortgage loan(s) to buy, build, or improve your home, see instructions and check this box . . . . . . . . . . . . . . . . ► ◻
	a	Home mortgage interest and points reported to you on Form 1098. See instructions if limited . . . . . . . . . . . . . . . . . . . . . . . . . .	8a	fill in the blank c95ffd002018034_12
	b	Home mortgage interest not reported to you on Form 1098. Seeinstructions if limited. If paid to the person from whom youbought the home, see instructions and show that person's name,identifying no., and address ► _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
		_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _	8b
	c	Points not reported to you on Form 1098. See instructions for special rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8c
	d	Mortage insurance premiums (see instructions) . . . . . . . . . . . . . .	8d
	e	Add lines 8a through 8d . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8e	fill in the blank c95ffd002018034_13
	9	Investment interest. Attach Form 4952 if required. See instructions.	9
	10	Add lines 8e and 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10	fill in the blank c95ffd002018034_14
Gifts to Charity Caution:If you made a gift and got a benefit for it, see instructions.	11	Gifts by cash or check. If you made any gift of $250 or more,
		see instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11	fill in the blank c95ffd002018034_15
	12	Other than by cash or check. If you made any gift of $250 or more, see instructions. You must attach Form 8283 if over $500 . . . .	12	fill in the blank c95ffd002018034_16
	13	Carryover from prior year . . . . . . . . . . . . . . . . . . . . . . . . . .	13
	14	Add lines 11 through 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14	fill in the blank c95ffd002018034_17
Casualty and Theft Losses	15	Casualty and theft loss(es) from a federally declared disaster (other than net qualified disaster losses). Attach Form 4684 and enter the amount from line 18 of that form. See instructions.	15	fill in the blank c95ffd002018034_18
Other Itemized Deductions	16	Other—from list in instructions. List type and amount ► _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
		16	fill in the blank c95ffd002018034_19
Total Itemized Deductions	17	Add the amounts in the far right column for lines 4 through 16. Also, enter this amount on Form 1040 or 1040-SR, line 12a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17	fill in the blank c95ffd002018034_20
	18	If you elect to itemize deductions even though they are less than your standard deduction, check this box . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ► ◻

BAA For Paperwork Reduction Act Notice, see the Instructions for Forms 1040 and 1040-SR.

Schedule A (Form 1040) 2021

Schedule B

Question Content Area

Complete Alice and Bruce Byrd's Schedule B 2021.

SCHEDULE B (Form 1040)Department of the Treasury Internal Revenue Service (99)

Interest and Ordinary Dividends ▶ Go to for instructions and the latest information. ▶ Attach to Form 1040 or 1040-SR.

OMB No. 1545-0074

2021

AttachmentSequence No. 08

Name(s) shown on return Bruce M. and Alice J. Byrd

Your social security number111-11-1113

Part IInterest(See instructions and the instructions for Form 1040, line 2b.) Note: If you received a Form 1099-INT, Form 1099-OID, or substitute statement from a brokerage firm, list the firm's name as the payer and enter the total interest shown on that form.	1	List name of payer. If any interest is from a seller-financed mortgage and the buyer used the property as a personal residence, see the instructions and list this interest first. Also, show that buyer's social security number and address ▶		Amount

				fill in the blank 32d186fe2079025_2



			1



	2	Add the amounts on line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2	fill in the blank 32d186fe2079025_3
	3	Excludable interest on series EE and I U.S. savings bonds issued after 1989. Attach Form 8815 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
	4	Subtract line 3 from line 2. Enter the result here and on Form 1040 or 1040-SR,line 2b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ▶	4	fill in the blank 32d186fe2079025_4
	Note: If line 4 is over $1,500, you must complete Part III.		Amount
Part IIOrdinaryDividends(See instructions and the instructions for Form 1040, line 3b.) Note: If you received a Form 1099-DIV or substitute statement from a brokerage firm, list the firm's name as the payer and enter the ordinary dividends shown on that form.	5	List name of payer ▶ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _






			5






	6	Add the amounts on line 5. Enter the total here and on Form 1040 or 1040-SR,line 3b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ▶	6	fill in the blank 32d186fe2079025_5
	Note: If line 6 is over $1,500, you must complete Part III.

Part III	You must complete this part if you (a) had over $1,500 of taxable interest or ordinary dividends; (b) had a foreign account; or (c) received a distribution from, or were a grantor of, or a transferor to, a foreign trust.	Yes	No
ForeignAccountsand Trusts Caution: If required, failure to file FinCEN Form 114 may result in substantial penalties. See instructions.	7a	At any time during 2021, did you have a financial interest in or signature authority over a financial account (such as a bank account, securities account, or brokerage account) located in a foreign country? See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
				X
		If 'Yes,' are you required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), to report that financial interest or signature authority? See FinCEN Form 114 and its instructions for filing requirements and exceptions to those requirements . . . . . . . . . . .

	b	If you are required to file FinCEN Form 114, enter the name of the foreign country where the financial account is located ▶ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
	8	During 2021, did you receive a distribution from, or were you the grantor of, or transferor to, a foreign trust? If 'Yes,' you may have to file Form 3520. See instructions . . . . . . . . .
				X

BAA For Paperwork Reduction Act Notice, see your tax return instructions.

Schedule B (Form 1040) 2021

Schedule 8812

Question Content Area

Complete Alice and Bruce Byrd's Schedule 8812.

SCHEDULE 8812 (Form 1040)Department of the Treasury Internal Revenue Service (99)

Credits for Qualifying Childrenand Other Dependents

▶ Attach to Form 1040, 1040-SR, or 1040-NR.

▶ Go to for instructions and the latest information.

OMB No. 1545-0074

2021

AttachmentSequence No. 47

Name(s) shown on return Bruce M. and Alice J. Byrd

Your social security number 111-11-1113

Part I-A

Child Tax Credit and Credit for Other Dependents

1	Enter the amount from line 11 of your Form 1040, 1040-SR, or 1040-NR . . . . . . . . . . . . . . . . . . . . . . . . . . .	1	fill in the blank 50955bfe4029052_1
2a	Enter income from Puerto Rico that you excluded . . . . . . . . . . . . . . . . . . . . . . . .	2a
b	Enter the amounts from lines 45 and 50 of your Form 2555 . . . . . . . . . . . . . . . . .	2b
c	Enter the amount from line 15 of your Form 4563 . . . . . . . . . . . . . . . . . . . . . . . .	2c
d	Add lines 2a through 2c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2d
3	Add lines 1 and 2d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3	fill in the blank 50955bfe4029052_2
4a	Number of qualifying children under age 18 with the required social security number	4a
b	Number of children included on line 4a who were under age 6 at the end of 2021 . .	4b
c	Subtract line 4b from line 4a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4c
5	If line 4a is more than zero, enter the amount from the Line 5 Worksheet; otherwise, enter -0- . . . . . . . . .	5	fill in the blank 50955bfe4029052_3
6	Number of other dependents, including any qualifying children who are not under age 18 or who do not have the required social security number . . . . . . . . . . . . . .	6	fill in the blank 50955bfe4029052_4
	Caution: Do not include yourself, your spouse, or anyone who is not a U.S. citizen, U.S. national, or U.S. resident alien. Also, do not include anyone you included on line 4a.
7	Multiply line 6 by $500 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7	fill in the blank 50955bfe4029052_5
8	Add lines 5 and 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8	fill in the blank 50955bfe4029052_6
9	Enter the amount shown below for your filing status.
	•	Married filing jointly—$400,000	}
	•	All other filing statuses—$200,000		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9	fill in the blank 50955bfe4029052_7
10	Subtract line 9 from line 3.
	•	If zero or less, enter -0-.	}
	•	If more than zero and not a multiple of $1,000, enter the next multiple of $1,000. For example, if the result is $425, enter $1,000; if the result is $1,025, enter $2,000, etc.		. . . . . . . . . . . . . .	10	fill in the blank 50955bfe4029052_8
11	Multiply line 10 by 5% (0.05) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
12	Subtract line 11 from line 8. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12	fill in the blank 50955bfe4029052_9
13	Check all the boxes that apply to you (or your spouse if married filing jointly).
	A	Check here if you (or your spouse if married filing jointly) have a principal place of abode in the United States for more than half of 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ☒
	B	Check here if you (or your spouse if married filing jointly) are a bona fide resident of Puerto Rico for 2021 ◻

Part I-B

Filers Who Check a Box on Line 13

Caution: If you did not check a box on line 13, do not complete Part I-B; instead, skip to Part I-C.
14a	Enter the smaller of line 7 or line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14a	fill in the blank 50955bfe4029052_10
b	Subtract line 14a from line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14b
c	If line 14a is zero, enter -0-; otherwise, enter the amount from the Credit Limit Worksheet A . . . . . . . . . .	14c	fill in the blank 50955bfe4029052_11
d	Enter the smaller of line 14a or line 14c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14d	fill in the blank 50955bfe4029052_12
e	Add lines 14b and 14d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14e	fill in the blank 50955bfe4029052_13
f	Enter the aggregate amount of advance child tax credit payments you (and your spouse if filing jointly) received for 2021. See your Letter(s) 6419 for the amounts to include on this line. If you are missing Letter 6419, see the instructions before entering an amount on this line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14f	fill in the blank 50955bfe4029052_14
	Caution: If the amount on this line doesn’t match the aggregate amounts reported to you (and your spouse if filing jointly) on your Letter(s) 6419, the processing of your return will be delayed.
g	Subtract line 14f from line 14e. If zero or less, enter -0- on lines 14g through 14i and go to Part III . . . . . . . .	14g	fill in the blank 50955bfe4029052_15
h	Enter the smaller of line 14d or line 14g. This is your credit for other dependents. Enter this amount on line 19 of your Form 1040, 1040-SR, or 1040-NR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14h	fill in the blank 50955bfe4029052_16
i	Subtract line 14h from line 14g. This is your refundable child tax credit. Enter this amount on line 28 of your Form 1040, 1040-SR, or 1040-NR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14i	fill in the blank 50955bfe4029052_17

For Paperwork Reduction Act Notice, see your tax return instructions.

Schedule 8812 (Form 1040) 2021

2021 Tax Rate Schedules

Question Content Area

Use the 2021 Tax Rate Schedules to compute the tax. (Note: Because the tax rate schedules are used instead of the tax tables, the amount of tax computed may vary slightly from the amount listed in the tables.)

2021 Tax Rate Schedules

Single—Schedule X

Head of household—Schedule Z

If taxableincome is: Over—

But notover—

The tax is:

of theamountover—

If taxableincome is: Over—

But notover—

The tax is:

of theamountover—

$ 0

$ 9,950

. . . . . .

10%

$ 0

$ 0

$ 14,200

. . . . . .

10%

$ 0

9,950

40,525

$ 995.00

12%

9,950

14,200

54,200

$ 1,420.00

12%

14,200

40,525

86,375

4,664.00

22%

40,525

54,200

86,350

6,220.00

22%

54,200

86,375

164,925

14,751.00

24%

86,375

86,350

164,900

13,293.00

24%

86,350

164,925

209,425

33,603.00

32%

164,925

164,900

209,400

32,145.00

32%

164,900

209,425

523,600

47,843.00

35%

209,425

209,400

523,600

46,385.00

35%

209,400

523,600

. . . . . .

157,804.25

37%

523,600

523,600

. . . . . .

156,355.00

37%

523,600

Married filing jointly or Qualifying widow(er)—Schedule Y-1

Married filing separately—Schedule Y-2

If taxableincome is: Over—

But notover—

The tax is:

of theamountover—

If taxableincome is: Over—

But notover—

The tax is:

of theamountover—

$ 0

$ 19,900

. . . . . .

10%

$ 0

$ 0

$ 9,950

. . . . . .

10%

$ 0

19,900

81,050

$ 1,990.00

12%

19,900

9,950

40,525

$ 995.00

12%

9,950

81,050

172,750

9,328.00

22%

81,050

40,525

86,375

4,664.00

22%

40,525

172,750

329,850

29,502.00

24%

172,750

86,375

164,925

14,751.00

24%

86,375

329,850

418,850

67,206.00

32%

329,850

164,925

209,425

33,603.00

32%

164,925

418,850

628,300

95,686.00

35%

418,850

209,425

314,150

47,843.00

35%

209,425

628,300

. . . . . .

168,993.50

37%

628,300

314,150

. . . . . .

84,496.75

37%

314,150

Tax Planning for 2022

Question Content Area

Alice and Bruce are planning some significant changes for 2022. They have provided you with the following information and asked you to project their taxable income and tax liability for 2022. Assume that the Byrds will itemize their deductions next year.

· The Byrds will invest the $1,600,000 of life insurance proceeds in short-term certificates of deposit (CDs) and use the interest for living expenses during 2022. They expect to earn interest of $32,000 on the CDs.

· Bruce has been promoted to regional manager, and his salary for 2022 will be $88,000. He estimates that state income tax withheld will increase by $4,000 and the Social Security tax withheld will be $5,456.

· Alice, who has been diagnosed with a serious illness, will take a leave of absence from work during 2022, so she will not receive a salary or incur any work-related expenses during the year. The estimated cost for her medical treatment is $15,400, of which $6,400 will be reimbursed by their insurance company in 2022. Their medical insurance premiums will increase to $9,769.

· Property taxes on their residence are expected to increase to $5,100.

· The Byrds' home mortgage interest expense and charitable contributions are expected to be unchanged from 2021.

· John will graduate from college in December 2021 and will take a job in New York City in January 2022. His starting salary will be $46,000.

In 2022, the medical expenses are reduced by 7.5% of AGI.

Assume that all of the information reported in 2021 will be the same in 2022 unless other information has been presented above. Use the 2022 Tax Rate Schedule found in Appendix A of the textbook.

Based on this information, the Bryd's projected itemized deductions for 2022 would be

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