| SCHEDULE 2 (Form 1040) Department of the Treasury Internal Revenue Service | Additional Taxes ▶ Attach to Form 1040, 1040-SR, or 1040-NR. ▶ Go to www.irs.gov/Form1040 for instructions and the latest information. | OMB No. 1545-0074 |
| 2021Attachment Sequence No. 02 |
| Name(s) shown on Form 1040, 1040-SR, or 1040-NR Beth R. Jordan | Your social security number123-45-6785 |
| Part I | Tax |
| 1 | Alternative minimum tax. Attach Form 6251 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1 | |
| 2 | Excess advance premium tax credit repayment. Attach Form 8962 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2 | |
| 3 | Add lines 1 and 2. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 17 . . . . . . . . . . . . . . . . . . . . . . | 3 |
| Part II | Other Taxes |
| 4 | Self-employment tax. Attach Schedule SE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4 | |||
| 5 | Social security and Medicare tax on unreported tip income. Attach Form 4137 . . . . | 5 | |||
| 6 | Uncollected social security and Medicare tax on wages. Attach Form 8919 . . . . . . . | 6 | |||
| 7 | Total additional social security and Medicare tax. Add lines 5 and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7 | |||
| 8 | Additional tax on IRAs or other tax-favored accounts. Attach Form 5329 if required . . . . . . . . . . . . . . . . . . . | 8 | |||
| 9 | Household employment taxes. Attach Schedule H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 9 | |||
| 10 | Repayment of first-time homebuyer credit. Attach Form 5405 if required . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10 | |||
| 11 | Additional Medicare Tax. Attach Form 8959 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 11 | |||
| 12 | Net investment income tax. Attach Form 8960 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 12 | |||
| 13 | Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance from Form W-2, box 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 13 | |||
| 14 | Interest on tax due on installment income from the sale of certain residential lots and timeshares . . . . . . . . . | 14 | |||
| 15 | Interest on the deferred tax on gain from certain installment sales with a sales price over $150,000 . . . . . . . . | 15 | |||
| 16 | Recapture of low-income housing credit. Attach Form 8611 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 16 | |||
| (continued on page 2) | |||||
Note: This problem is for the 2021 tax year. Need help with amount for line 4.
Beth R. Jordan lives at 2322 Skyview Road, Mesa, AZ 85201. She is a tax accountant with Mesa Manufacturing Company, 1203 Western Avenue, Mesa, AZ 85201 (employer identification number 11-1111111). She also writes computer software programs for tax practitioners and has a part-time tax practice. Beth is single and has no dependents. Beth was born on July 4, 1975, and her Social Security number is 123-45-6785. She did not engage in any virtual currency transactions during the year, and she wants to contribute $3 to the Presidential Election Campaign Fund. Beth received the appropriate coronavirus recovery rebates (economic impact payments); related questions in ProConnect Tax should be ignored.
The following information is shown on Beth’s Wage and Tax Statement (Form W-2) for 2021.
| Line | Description | Amount |
| 1 | Wages, tips, other compensation | $65,000.00 |
| 2 | Federal income tax withheld | 9,500.00 |
| 3 | Social Security wages | 65,000.00 |
| 4 | Social Security tax withheld | 4,030.00 |
| 5 | Medicare wages and tips | 65,000.00 |
| 6 | Medicare tax withheld | 942.50 |
| 15 | State | Arizona |
| 16 | State wages, tips, etc. | 65,000.00 |
| 17 | State income tax withheld | 1,954.00 |
During the year, Beth received interest of $1,300 from Arizona Federal Savings and Loan and $400 from Arizona State Bank. Each financial institution reported the interest income on a Form 1099-INT. She received qualified dividends of $800 from Blue Corporation, $750 from Green Corporation, and $650 from Orange Corporation. Each corporation reported Beth’s dividend payments on a Form 1099-DIV.
Beth received a $1,100 income tax refund from the state of Arizona on April 29, 2021. On her 2020 Federal income tax return, she used the standard deduction.
Fees earned from her part-time tax practice in 2021 totaled $3,800. She paid $600 to have the tax returns processed by a computerized tax return service.
On February 8, 2021, Beth bought 500 shares of Gray Corporation common stock for $17.60 a share. On September 12, 2021, Beth sold the stock for $14 a share.
On January 2, 2021, Beth acquired 100 shares of Blue Corporation common stock for $30 a share. She sold the stock on December 19, 2021, for $55 a share. Both stock transactions were reported to Beth on Form 1099-B; basis was not reported to the IRS.
Beth bought a used sport utility vehicle for $6,000 on June 5, 2021. She purchased the vehicle from her brother-in-law, who was unemployed and was in need of cash. On November 2, 2021, she sold the vehicle to a friend for $6,500.
During the year, Beth records revenues of $16,000 from the sale of a software program she developed. Beth incurred the following expenses in connection with her software development business.
| Cost of personal computer | $7,000 |
| Cost of printer | 2,000 |
| Furniture | 3,000 |
| Supplies | 650 |
| Fee paid to computer consultant | 3,500 |
Beth elected to expense the maximum portion of the cost of the computer, printer, and furniture allowed under the provisions of § 179. These items were placed in service on January 15, 2021, and used 100% in her business.
Although her employer suggested that Beth attend an in-person conference on current developments in corporate taxation, Beth was not reimbursed for the travel expenses of $1,420 she incurred in attending the meeting. The $1,420 included $200 for the cost of meals.
During the year, Beth paid $300 for prescription medicines and $2,875 for doctor bills and hospital bills. Medical insurance premiums were paid by her employer. Beth paid real property taxes of $1,766 on her home. Interest on her home mortgage (Valley National Bank) was $3,845, and credit card interest was $320. Beth contributed $2,080 in cash to various qualifying charities during the year. Professional dues and subscriptions totaled $350.
Beth paid estimated taxes of $1,000.
Required:
Compute Beth Jordan’s 2021 Federal income tax payable (or refund due), and complete her 2021 tax return using appropriate forms and schedules and the Qualified Dividends and Capital Gain Tax Worksheet.
- 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, unless instructed otherwise.
- 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 2021 Tax Rate Schedule provided. Do not use the Tax Tables.
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