Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

Exercise 36

Brenda Carlyle attended Kansas State University during 2006-2010. She incurred education expenses of $10,000. To finance her education, she borrowed $7,000 through a federal student loan program and borrowed another $3,000 from Kansas State Credit Union for educational purposes. After graduation, she accepted a position with the Houston Deloitte Touche office and moved there in June 2010. She lives at 4560 Apple Blossom Lane with her cat, Misty. Her social security number is 412-34-5670
Her W-2 contained the following information:
Wages of $61,533.05.
Federal Income Tax Withheld of $8,829.95.
Social Security Wages of $61,533.05.
Social Security Tax Withheld of $3,815.05.
Medicare Wages of $61,533.05.
Medicare Tax Withheld of $892.23.
In moving to Houston, she incurred the following moving expenses:
$475 in gasoline.
$295 for renting a truck from IGOTYA rentals.
$75 in food.
$410 for motel lodging on the way to Houston.
She also received two 1098-E's. One was from the Federal Student Loan Program which showed $850 of student loan interest and the other was from the Kansas State Credit Union and showed $450.75 of student loan interest.
Prepare a Form 1040 and a Schedule M as well as a Form 3903 and a student loan interest worksheet for Brenda.