Individual tax return – bob and melissa grant

Prepare 2013 Individual Tax Return 1040 form.

Bob and Melissa Grant are married and live in Lexington, Kentucky. The Grants have two children Jared age 15 and Alese age 12. The Grants would like to file a joint tax return for the year.

The following information relates to the Grant’s tax year:

• Bob’s Social Security number is 987-45-1234
• Melissa’s Social Security number is 494-37-4883
• Jared’s Social Security number is 412-32-5690
• Alese’s Social Security number is 412-32-6940
• The Grants’ mailing address is 95 Hickory Road, Lexington, Kentucky 40502.
• Jared and Alese are tax dependents for federal tax purposes

Bob Grant received the following during the year:

Employer Gross Wages Federal Income Tax Withholding State Income Tax Withholding
National Storage $66,200 $8,000 $3,750
Lexington Little League $2,710 0 0

Melissa Grant received the following during the year:

Employer Gross Wages Federal Income Tax Withholding State Income Tax Withholding

Jensen Photography $25,400 $2,450 $1,225

All applicable and appropriate payroll taxes were withheld by Grants’ respective employers.

The Grants also received the following during the year:

Interest Income from First Kentucky Bank $130
Interest Income from City of Lexington, KY Bond $450
Interest Income from U.S. Treasury Bond $675
Interest Income from Nevada State School Board Bond $150
Workers’ Compensation payments to Bob $4,350

Disability payments received by Bob on account of injury $3,500
• National Storage paid 100% of premiums the premiums on the policy and included the premium payments in Bob’s taxable wages
Receipt of payment by Melissa as a result of a lawsuit for damages sustained in a car accident:
• Medical Expenses $2,500
• Emotional Distress $12,000
• Punitive Damages $10,000
Total $24,500

Eight years ago, Melissa purchased an annuity contract for $88,000. This year, she received her first payment on the annuity. The payment amount was $15,000. The annuity started to pay on January 1 and she received a full first year’s payment. It will pay her $15,000 per year for ten years (beginning with this year). The $15,000 payment was reported to Melissa a form 1099-R for the current year (box 7 contained an entry of “7” on the form).

The Grants did not own, control or manage any foreign bank accounts nor were they a grantor or beneficiary of a foreign trust during the tax year.

The Grants paid or incurred the following expenses during the year:

Dentist/Orthodontist (unreimbursed by insurance) $8,500
Doctors (unreimbursed by insurance) $ 625
Prescriptions (unreimbursed by insurance) $ 380
KY state tax payment made on 4/15/13 for 2012 liability $1,350
Real property taxes on residence $1,800
Vehicle property tax based upon age of vehicle $250
Mortgage interest on principal residence $8,560
Interest paid on borrowed money to purchase the City of
Lexington, KY municipal bonds $400
Interest paid on borrowed money to purchase 
U.S. Treasury bonds $240
Contribution to the Red Cross $1,000
Contribution to Senator Rick Hartley’s Re-election Campaign $2,500
Contribution to First Baptist Church of Kentucky $6,000
Fee paid to Jones & Company, CPAs for tax preparation $200

In addition, Bob drove 6,750 miles commuting to work and Melissa drove 8,230 miles commuting to work. Both the Grants have represented to you that they maintained careful logs to support their respective mileage.

The Grants drove 465 miles in total to receive medical treatment at a hospital in April. 

During the year, the Grants’ personal residence was burglarized on October 1 of the current year. The theft occurred during the day while both the Grants were at work and their children were at school. The Grants had the following personal property stolen:

Item Purchase Date Fair Value on Date of Theft Tax Basis of Item Insurance Reimbursement Received
Laptop computer and Printer 09/01/2012 3,000 3,000 500
Rifle 03/01/2010 2,000 2,500 500
TV/Projector 03/01/2010 5,000 13,000 1,000
2005 Honda Pilot 07/01/2011 4,000 6,500 500
Total 14,000 25,000 2,500

The Grants want to contribute to the Presidential Election Campaign. The Grants would like to receive a refund (if any) of any tax they may have overpaid for the year. Their preferred method of receiving the refund is by check.