Sheila and Shane are married and have two children

QUESTION

Use the information from this question (Sheila and Shane) to complete Form 1040. Use the form for2014. You can hand write to complete the form or complete electronically. For this assignment assumethat federal tax withheld is $25,000. You can either assume the standard deduction or attempt toitemize deductions. If you itemize deductions, assume that state tax withheld was $7,000.2. Sheila and Shane are married and have two children: Erik, age 17, who isa junior in high school, and Becky, age 10. Sheila does not work outside thehome, and Shane is an electrical engineer who earns $130,000 working as anemployee of Tectronics, Inc., in 2015. Together, they also receive $10,000 ininterest on corporate bonds and $5,000 in interest on Ohio state bonds. InChapter 2, you will learn that the interest on the Ohio state bonds isexcludable from Gross Income under the authority of § 103. They contribute$5,000 to the Cleveland Orchestra, which is a deductible contribution under §170. They pay $7,000 in real property taxes on their personal residence totheir local Ohio county jurisdiction, and they pay $8,000 in Ohio state incometaxesfor 2015, both payments of which are deductible under § 164(a). They alsopay $6,000 in interest on their home mortgage, which satisfies the definitionof “qualified residence interest” within the meaning of § 163(h)(3) and is thusdeductible (as explored more fully in Chapter 18). Finally, Shane paysprofessional dues and travels to several professional association meetings inthe field of electrical engineering out of his own pocket in order to keep up todate on the latest information in his field, even though Tectronics, Inc., doesnot reimburse these costs to Shane. The total amount that is deductible byShane under § 162 is $2,500. Sheila and Shane file a joint tax return for2015.

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