Training Home – Understanding Taxes – Exercise 11A

Exercise 11A – Madison R. Mailey

You should have completed the federal simulation return for Madison Mailey before starting this exercise. If you have not completed the federal return, you may access and complete the IRS module for Madison at http://www.irs.gov/app/understandingTaxes/jsp/s_student_simulations.jsp

The filing status on Madison's federal return was Head of Household. The following information was reported on her federal return:

Federal adjusted gross income	$45,216
Standard deduction	$7,550
Federal tax	$ 2,666

Madison elected to have her federal refund directly deposited into her checking account. If Madison receives a Utah refund, she would like it deposited directly into her checking account. The bank routing number entered on her federal return was 242278077 and her account number was 10230223311.

Madison wants to designate $2.00 of her tax liability to go to the Personal Choice Party.

During the year Madison used the Internet to purchase a home entertainment system for $2,495. The company she purchased it from is in California and shipped it to her home in Provo, Utah. The California company did not collect Utah use tax. The following worksheet is used to calculate the use tax Madison owes on the purchase of the entertainment system:

1	Total amount of purchases subject to use tax	$2,495
2	Use tax rate (decimal from chart)	.0625
3	Use tax (multiply line 1 by line 2)	$156
4	Credit for sales tax paid to another state	$0
5	Use tax due (subtract line 4 from line 3) Enter ZERO if less than ZERO	$156

See TC-40 Instructions use tax rate chart.

You will need the following forms to complete Madison's income tax return:

Madison's W-2. You need the Utah state wages and state income tax that was withheld from her wages.
Utah Individual Income Tax Return. Your instructor may provide you with a blank copy of the Utah return or you may complete a fill-in return online Form TC-40.
Utah use tax rate chart (see TC-40 Instructions use tax rate chart).
2006 Utah Tax Calculation Worksheet.

If you need to review the step-by-step instructions click here.

When you have completed Monica's return click here to check your work.

If you are finished, go back to the index.

Tax Commission Home | Contact the Utah State Tax Commission