Advanced Scenario 6:
Matthew and Mary Donnelly Directions Using the tax software, complete the tax return, including Form 1040 and all appropri- ate forms, schedules, or worksheets . Answer the questions following the scenario .
Note: When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice.
• Matthew and Mary are married and want to file a joint return. They provided all the cost of keeping up the home and all of the support for their son Ryan .
• Ryan has no income and no filing requirement.
• Matthew retired and began receiving retirement income on April 1, 2018 . No distribu- tions were received prior to his retirement . Matthew selected a joint survivor annuity for these payments .
• Matthew was covered by Medicare all year . Mary and Ryan had minimum essen- tial healthcare coverage (MEC) through Mary’s employer until October 14th when she was laid off . Mary and Ryan did not have MEC all of November and December 2018 .
• Matthew and Mary stated if they are entitled to a refund, they want half of it depos- ited into their checking account and the other half deposited into their savings account . The checking account number is 123456789 and the savings account number is 987654321 .
18 . Ryan qualifies the Donnellys for the credit for other dependents. a . True b . False 19 .
19. The Donnellys must pay an individual shared responsibility payment because Mary and Ryan did NOT have healthcare coverage for each month of 2018 . a . True b . False
20. The net capital gain or loss reported on Schedule D, Capital Gains and Losses, is a gain of $638 . a . True b . False
21 . The combined age used to calculate the taxable portion of the pension using the Simplified Method is 129. a . True b . False
22 . None of Matthew’s Social Security income is taxable . a . True b . False
23 . The Donnellys can split their refund using Form 8888, Allocation of Refund (Including Savings Bond Purchases) . a . True b . False
24 . The total withholding on the tax return is $4,146 . a . True b . False