FEDERAL INCOME TAX

Task:

A. Write an essay (suggested length of 2–5 pages) in which you recommend the most advantageous tax filing status for Spouse A and Spouse B on their federal tax return. In your essay:
1. Explain your recommendation based on current, applicable tax laws.
2. Explain the rules that apply to the following types of income on the couple’s tax return.
a. Taxable and nontaxable income
b. Short-term and long-term capital gains or losses
c. Profit or losses from sale of property
d. Partnership income and losses
e. Gains or losses from passive activity
3. Explain your decision to include or exclude each of the types of income in part A2 based on current, applicable tax laws.
a. For part A2e, explain the rules that apply to gains or losses from passive activity.
4. Calculate the adjustments to income that you would include on the return(s).
a. Explain each adjustment item based on the applicable tax law.
5. Determine whether the couple should use the standard deduction or itemized deductions on their return(s).
a. Explain your decision based on current, applicable tax laws.
6. Based on the given data, identify all tax credits available to the couple.
a. Explain any credits based on the applicable tax law.

B. When you use sources, include all in-text citations and references in APA format.

Note: For definitions of terms commonly used in the rubric, see the attached Rubric Terms.

Note: When using sources to support ideas and elements in a paper or project, the submission MUST include APA formatted in-text citations with a corresponding reference list for any direct quotes or paraphrasing. It is not necessary to list sources that were consulted if they have not been quoted or paraphrased in the text of the paper or project.

Note: No more than a combined total of 30% of a submission can be directly quoted or closely paraphrased from sources, even if cited correctly. For tips on using APA style, please refer to the APA Handout web link included in the APA Guidelines section.