Question

Based on the source documents provided and relevant data provided below, complete the 2018 individual tax return for Bob and Melissa Grant. Complete all relevant schedules and forms included in the “2018 Form 1040 and Schedules” PDF document. If a form is not included in the PDF file, you do not need to complete it. If required or relevant information is missing, you may disregard it for this assignment.

You may work together, but each student must submit his or her own copy of the assignment through Blackboard. If you work with one or more classmates, please make note of who you worked with when submitting through Blackboard.

Taxpayer Profile:

Bob (age 43) and Melissa (age 43) Grant are married and live in San Antonio, TX. 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 Grants’ tax year:

•  Bob’s Social Security number is 987‐45‐1235

•  Melissa’s Social Security number is 494‐37‐4893

•  Jared’s Social Security number is 412‐32‐5690

•  Alese’s Social Security number is 412‐32‐6940

•  The Grants’ mailing address is 95 Roadrunner Way, San Antonio, TX 78249.

•  Jared and Alese are tax dependents for federal tax purposes

  Source Documents provided:

•  Bob and Melissa paid property taxes on their personal residence of $15,000 in 2018

•  Bob and Melissa made a $25,000 cash contribution to their church, a qualified public charity, in

  2018

•  Bob and Melissa did not incur any child care costs in 2018

•  Bob does not materially participate in ABC Company, LLC

•  2018 Form W‐2 for Bob

•  2018 Form W‐2 for Melissa

•  2018 Form 1099‐INT for Bob and Melissa

•  1099‐MISC for Bob’s business, Bob’s Consulting Service

•  Schedule K‐1 for Bob for an investment in ABC Company, LLC

•  2018 Form 1098‐INT for Bob and Melissa’s primary residence

  Additional information:

• Bob quit his job in 2018 and began his own business providing consulting services. Bob did not organize or incorporate, remaining as a sole proprietorship (doing business as Bob’s Consulting Service)

• Bob incurred the following costs for his new consulting business (assume none are startup costs)

o New laptop computer, used exclusively for business, purchased in August 2018 ‐ $2,000o Travel (assume 100% deductible) ‐ $10,000
o Meals ‐ $5,000

o Client entertainment ‐ $1,500
o Office supplies ‐ $1,000
o Accounting and legal expenses ‐ $2,500o Contract Labor ‐ $2,500

Other information: Consulting company (Bob Grant) W2 wages- $150000 income, federal income tax withheld $25000, social security tax withheld $7,960.80, Medicare tax withheld $2,175

XYZ Firm PLLC (Melissa Grant) W2- $90000 income, federal income tax withheld $15000, social security tax withheld $5580, medicare tax withheld $1305

Frost Bank interest income- $1000

Client Company LLC form 1099(miscellaneous income)- $40000

Community credit union mortgage- mortgage interest received $18000

Schedule K-1 for abc company LLC- ordinary business income $2500, distributions $2500, ending capital account $5000

Fill out a joint tax return for Bob and Melissa Grant.