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

Exercise 44

In February 2010, Phillip and Barbara Jones, and their two dependent children, who are both over 17, moved from Chicago to Albuquerque, a distance of 1,327 miles which they drove in their own car. The children's names are Roger and Gwen. The move was a result of a job transfer for Phillip. The distance from their old home to Phillip's old office was 30 miles. Barbara quit her job in Chicago and decided to perform volunteer work for a year before seeking further employment. Phillip and Barbara incurred expenses of $4,550 to the moving company (which included $320 for furniture storage), hotel charges of $550, meals of $712 en route from Chicago to Albuquerque. Their new home was located at 7432 Desert Springs Way. Phillip, but not Barbara, was employed in the new location throughout the year. Phillip's social security number is 412-34-5670, Barbara's is 412-34-5671, Roger's is 412-34-5672 and Gwen's is 412-34-5673.
Phillip is an attorney for a national law firm; his W-2 contained the following information:
Wages of $124,220.45.
Federal Income Tax Withheld of $29,765.12
Social Security Wages of $ 106,800.
Social Security Tax Withheld of $6,621.60
Medicare Wages of $124,220.45
Medicare Tax Withheld of $1,801.20
Employer Moving Expense Reimbursement (Box 12, code P) of $5,000.
In addition, both he and Barbara received 1098-E's from the Federal Student Loan Program. Philip's had student loan interest of $1,050 and Barbara's had student loan interest of $750.
Prepare a Form 1040 and a Schedule M for Phillip and Barbara, as well as a Form 3903 and a student loan interest worksheet.