Writing Project

Part 1-Letter:

On December 31 of the current year, Russell Powell got married to Denise Powell.  Denise had a daughter from a previous relationship that is currently 13 years old.  Using your understanding of the concepts in the first 3 chapters, please draft a letter to Russell and Denise and help them understand their options for which filing status to use, and whether or not they may claim Denise’s daughter as a dependent on their current year tax return. Your letter to Mr. Powell should summarize the facts, issues, and conclusions in non-technical language.  Dont forget your authorities, cites, etc.

Part 2- Tax Form:

Fill out the appropriate tax form for Russell and Denise Powell.  Tax forms can be obtained from the IRS website.  **Be sure you save the form to your computer BEFORE you fill in any information or your data will be lost when you save the file with the data entered. Once saved, access the saved form from your computer, not the web browser.**

Russell and Denise Powell are married filing jointly.  Their address is 525 Spencer Street Miami, FL  33054.

Additional Information about Mr. and Mrs. Powell is as follows:

Russell Powell                                                                Denise Powell
Social Security Number:  412-34-5670            Social Security Number:  412-34-5671
Date of Birth:  4/11/1971                                    Date of Birth:  7/24/1974
W-2 For Russell shows these amounts:     W-2 for Denise shows these amounts:
Wages (Box 1):  $75,000                            Wages (Box 1):  $35,000
Federal W/H (Box 2): $6,950                            Federal W/H (Box 2): $3,820
Social Security Wages (Box 3): $75,000      Social Security Wages (Box 3): $35,000
Social Security W/H (Box 4): $4,650            Social Security W/H (Box 4): $2,025
Medicare Wages (Box 5): $75,000                    Medicare Wages (Box 5): $35,000
Medicare W/H (Box 6): $1,088                    Medicare W/H (Box 6): $475

Form 1099-INT for Russell and Denise show this amount: Box 1 = $3,740 Peninsula Bank

They also received tax-exempt interest of $1,500, as well as $90 for jury duty pay when Denise went to court to serve for two days.

Denise received two weeks of workers compensation pay for a total of $1,750.

Dependent:  Daughter Sarah Powell.  Her date of birth is 6/15/2008.  Her Social Security number is 412-34-5672

Part 3-Letter and Excel Calculation:

Create a 1-2 page letter to the Powell’s explaining their deductibility of their medial expenses  by providing them a spreadsheet in Excel to calculate Denises medical expense deduction.  Use the formula for calculating a taxpayers medical expense deduction presented in your textbook in learning object 5.6 as a guide.  Use the AGI you calculated for the couple in week 2 in your calculation.  Make sure to properly label each medical expense and provide an explanation for any medical expenses that are nondeductible in the letter.  Embed your spreadsheet into the letter.

During the current year Denise has paid the following medical expenses:

Drugs (prescribed by a physician                                          $1,850
Marijuana (prescribed by physician)                                  $2,125
Health Insurance Premiums After Taxes                            $775
Doctors Fees                                                                          $1,450
Contact Lenses                                                                  $280
Over-the-Counter-Drugs                                                          $325

Denise received $750 for a portion of her doctors fees from her insurance.

Writing Requirements:

The week 1 and 3 letters to the Powell’s should be 1-2 pages with references.
Use an Excel spreadsheet for the medical expense deduction calculation in week 3.
All sources used are to be submitted in APA format. Please use the writing center if needed.

 

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