1. Hello, Rowan speaking. How may I help you? Mr. Walker! This is Kennedy Jenkins, your next door neighbor. Hi Kennedy, what can I help you with today? I just got all of these papers in the mail labeled important tax documents and I am so confused and overwhelmed about what I need to do with them! Okay, just relax. I can help you with that. Could you come by my office this afternoon? Oh Absolutely! What do I need to bring with me? Please bring all the documents you received in the mail labeled as important tax documents. Okay, thank you. See you in a few hours! Knock… Oh Hello Mrs. Jenkins, come on in and sit down. Thank you so much for meeting with me, I always feel so overwhelmed when it comes to doing my taxes, I just don’t know where to begin! No problem at all. Lets first take a look at what an individual tax return looks like so we can get the big picture of what we will be trying to accomplish today. The individual tax return is called a 1040. The first section begins with all of your personal information such as your address and social security number. The second section details what your filing status would be, so for you since you are married. We will check married filing joint. The third section details any dependents you may have. Do you have any dependents Mrs. Jenkins?

2. Well I have one daughter, her name is Klara. Ok perfect, so we would fill this section out with all of Klara’s information. The fourth section details any income that you have received this year. Did you or your husband receive any W-2 forms? Yes. I work at a law firm and my husband is a cop, here they are! Very good, now we will look at any interest or dividend income you may have received. Do you have a 1099-INT or 1099-DIV in that pile of yours? Let me check… no 1099-DIV, but I do have one 1099- INT from Five Star Bank. Okay, moving on. Did you receive any payments from Social Security or from a pension plan this year? Nope! But it we would have, what paperwork would I have gotten? Just to be ready in case we do in the future! You would have received either a 1099-R from a pension or annuity fund or a SSA-1099 from any Social Security money received. We will now move on to Misc. income Kennedy: What is Misc. income? Mr. Walker: Did you or your husband receive money from anyone throughout the year for providing goods or services? Kennedy: No we didn’t but I bet it would require another 1099! That is correct, you would have received a 1099- MISC. So if you did not receive one, we can move on. Now all of this income that you have in total equals the amount that will be shown on line 22 of the tax return. We may also have adjustments to this number resulting from any items in section 5. Did you have any self employment income, moving expenses, or pay for any tuition and fees for education? No we did not. So what does that mean? This just means that your AGI or adjusted gross income will be exactly the same as your total income reported on line 22 of the return!

3. Now we can move on to taxes, credits, and any deductions you may have from your AGI (adjusted gross income). We first need to decide whether or not you will take an itemized deduction or the standard deduction. The standard deduction is a standard amount that you can deduct from your return. The itemized deduction takes into consideration any medical expenses you may have paid, home mortgage interest paid, tax prep fees paid, ets. Did you keep track of any of your medical expenses during the year or any home mortgage interest that you may have paid? No I didn’t! Is that bad!? Not at all. We can just use the standard deduction on your return this year. Try to keep track next year and we can compare what your standard deduction would be compared to your itemized deduction to see which is more beneficial. Phew! What’s next? You will also receive an exemption of $3,700 for you, your husband, and your daughter. This you get no matter what! Now that we have done this, we can subtract your standard deduction and personal exemptions from your AGI to arrive at your taxable income. A tax rate is applied and line 44 determines your tax for the year. Now we will fill out the payments section, because since you did not have any self- employment income and didn’t purchase a house this year, we won’t have anything to add in the other taxes section, therefore your tax on line 44 will be the same as total tax on line 61 Any tax that was withheld on your W-2s will show up in this section, along with any credits you may be eligible for. This section will reduce your tax liability. Oh this is the part I like, no one ever likes to have to pay more taxes at the end of the year! That is very true, so once we have calculated the amount you owe or the amount you will be refunded, your tax return will be complete. I can take all of the information you have brought with you today and we can have this return back to you within the next week or so. Thank you so much! This really helped me better understand taxes and how my tax return is filled out! I will talk with you soon and will come pick up my return when it is finished!