Module 2

1. This Monroe County resident client is married, both

spouses are under 64 and they have two children, ages
12 and 7. The client has $62,000 in W2 wages and
owns a home. Documents that the client has:
Spouse #1 W2 shows access to medical insurance
through the employer for the family, has $3,200 paid
in New York State income taxes that were withheld,
$4,800 in 401K contributions and $620 in union dues
paid.
A mortgage interest statement showing $8,500 in
interest paid on their home, which is located on a hill
overlooking Lake Ontario.
A bank loan statement for their Class A motor coach
(RV) that includes $3233 in interest and $6212 paid
towards principal
A bank statement for a home equity loan in spouse
#2s name that shows $1,200 in interest and $3,000
paid towards principal
Receipts from the rental of their home for 13 days for
the total sum of $13,000 during the month of July.
A receipt from the town showing $4,150 in town and
county property taxes
A receipt from the school district showing $3,300 in
school taxes related to their property value
A copy of their 2014 taxes which includes a
coversheet showing $700 paid to their prior tax
preparer for that work
They also provide this information:

 They paid $200 per week during the school year to a

relative to babysit for the kids
When they rented the house out, they paid $350 for
a cleaning service and $150 for lawn services. The
family went to visit out-of-state friends during that
time and spent $1,500 for gas, food and other
expenses related to the trip
Spouse #2 is a part-time student at a local college
and a volunteer at a local not-for-profit
Spouse #2 opened the home equity line of credit in
2014 and the amount used in 2015 paid for new
furniture, a vacation to Maui and a payoff on their
credit card debt
Questions:
What else do you need to know/what is missing? What
other documents do you need?
What numbers provided above are important to your
ability to complete their taxes?
What forms will be completed when you use the software
to complete their taxes?

2. This client is single, is 25 years old and has the

following documents:
A W2 which shows she has access to medical
insurance through the employer and that she
contributed $3,000 towards an HSA, has $1,500 paid
in New York State income taxes that were withheld,
and did not contribute to any retirement. Her total
taxable income was $13,200.
Rent receipts for $900 per month from September
through December
A log listing all of her job hunting expenses, including
several trips to Rochester with overnight hotel or
friends home stays
Receipts from her move from Syracuse, NY to
Rochester NY: $1,300 from the movers, $500 lease
cancellation from her Syracuse landlord, a $200 hotel
receipt for the nights she stayed in Henrietta before
she could move into the apartment, $60 in food
receipts and $40 in kennel costs for her cats while
she was in the hotel
The form from Syracuse University showing that she
paid $13,000 in tuition and fees from her final
semester of undergraduate study
A form from NELNET showing she paid $800 school
loan interest in 2015
A receipt from DMV showing that she paid $48 to
New York State for her cars two year registration
She also provides this information
She owned a home in Syracuse until August 29th and
was working full time while she went to college. She

lost the W2 and cant find her house closing

statement. Shes asked the employer and her prior
mortgage holder to send her copies.
Her grandparents gave her $8,000 and her parents
gave her $7,000 to help pay for her final semester
college costs.
She transferred with her current company to work at
their Rochester office as their offer was better than
any of those she received in her job hunt
Her job in Syracuse was in the manufacturing plant
where she wore jeans and T-shirts to work. The new
job in Rochester is an office job in the legal
department. She had to buy new working clothes
that she believes she can only wear to work (suits,
blazers, shoes, etc.) and spent $1,600 of her
graduation gift money for the clothing.
Questions:
What else do you need to know/what is missing?
What other documents do you need?
What numbers provided above are important to your
ability to complete her taxes?
What forms will be completed when you use the
software to complete her taxes?

3. This client is a married couple, ages 48 and 50. Their

children are grown and live in different states. They have
the following documents:
Spouse #1 has a W2 which shows no medical
insurance, has $700 in New York State income taxes
that were withheld, $1500 in 401K contributions and
salary of $28,000
Spouse #2 owns a shoe repair shop. A summary
page from QuickBooks shows $70,000 revenue and
$30,000 in expenses which include rent for a small
retail space and other valid expenses such as
utilities. Receipts from the IRS show $15,000 in
estimated tax payments.
A mortgage interest statement showing $5,200 in
interest paid on their home and $8,800 in principal
paid.
Receipts from a trip they took to a shoe convention in
Miami in January. Travel expenses for the 4 day
convention were $2,000 and meals were $600.
A receipt from the town showing $3,350 in town and
county property taxes
A receipt from the school district showing $3,700 in
school taxes related to their property value
A police report that shows their home was robbed
while they were in Miami and an insurance form
showing $7,000 reimbursement towards $10,000
value of the stolen property and a smashed window.
Their December statement showing bank interest
earned on their joint checking account, $22
They also provide this information:

 Spouse #2 works at the shoe repair business on the

weekends
They didnt know much about the Affordable Care
Act, so they just signed up for the Gold plan at a cost
of $900 per month and paid the bill directly to the
insurer. They were covered for the full year.
Theyve been thinking about an IRA but havent put
any money into one
Questions:
What else do you need to know/what is missing? What
other documents do you need?
What numbers provided above are important to your
ability to complete their taxes?
What forms will be completed when you use the software
to complete their taxes?

4. This client is 67 and retired at the end of November.

She has the following documents:
A W2 which shows earnings of $125,000; medical
insurance coverage, has $11,000 paid in New York
State income taxes that were withheld, $12,000 in
401K contributions
A mortgage interest statement showing $10,600 in
interest paid on her home and $22,000 in principal
paid.
A receipt from the town showing $8,020 in town and
county property taxes
A receipt from the school district showing $7,300 in
school taxes
Her December brokerage statement showing stock
dividends of $7,000
Charity receipts for $6,000; a receipt for the donation
of a car valued at $2,800 and political campaign
contributions of $2,000.
A 1098 from the University of Rochester for $15,000
in tuition for her 23 year grandson who was her
dependent until May when he moved to Alaska for
his new job.
The sales contract from her November purchase of a
Nissan Leaf: $32,000 plus $2,560 in New York State
sales tax.
A log and plastic bag with receipts for miscellaneous
itemized expenses such unreimbursed work
expenses, tax preparation fees, safe deposit box
rental fees and job hunting expenses related to her
job search in San Francisco (she decided to stay
here). The total of these expenses is $14,000.

She also tells you that:

She has no other income and wont take Social
Security until next year. Shell be living on funds
from her investments this year.
She has applied for and will be covered by Medicare
Her New York State income tax refund for 2014
overpayment, received in April, was $845
She volunteers regularly at the Veterans Outreach,
at least once per week. During the holidays, she
generally puts $20-$25 in the Salvation Army
buckets.
Questions:
What else do you need to know/what is missing? What
other documents do you need?
What numbers provided above are important to your
ability to complete her taxes?
What forms will be completed when you use the software
to complete her taxes?

5. Your last client of the day is a father, age 28. His

documents include:
A receipt from Rochester Playful Child Care for
$2,000
His December bank statement showing $2,000 in
interest
A W2 from his Rochester full time job where he
earned $18,000, was covered by medical insurance
and had no retirement account contributions. He
started this job in October.
Receipts from his move from Albany to Rochester in
September. The total cost was $300 for the truck
rental and $500 for his apartment deposit.
A closing costs statement in his girlfriends name for
the home she purchased in August where they both
live now
He also tells you that:
He did not hold a full time job while in Albany and he
lived in an apartment, for which he paid $800 rent
per month
His adopted son, Jake, is 3 years old, the adoption
was finalized in April and he has asked his attorney
to summarize the costs for him.
He received a monthly check from Social Services for
his son for January March when he was still Jakes
foster parent.
He received a $250,000 life insurance payout in 2014
when his aunt passed away and he uses money from
that whenever needed. The remainder of that

money is in the bank account for which he supplied

the bank statement above.
He makes the mortgage payments, pays for utilities
and his girlfriend pays the other home related costs.
Total monthly costs to maintain the home are $1,600
and his monthly contribution to that amount is
$1,200.
Questions:
What else do you need to know/what is missing?
What other documents do you need?
What numbers provided above are important to your
ability to complete his taxes?
What forms will be completed when you use the
software to complete his taxes?
Then:

There are five scenarios, similar to those you might

encounter as a tax preparer. These scenarios are designed
to assess your ability to bring together what you have
learned in these three chapters in a close-to-reality
environment.

The taxpayer will provide information that may or

may not be important to you, so you will need to sift out
what is important to your ability to complete their tax
forms.

At the end of the day, you must summarize your

meetings in an email. Write your summaries as if you are

writing to your supervisor about the taxpayer's situation:

be professional and polite

Substantiate your answer by including references to

the page or textbook topic

Only include calculations if they are meaningful and

support your ideas (for example, if you need to show
their income meets a threshold applicable to your
explanation)