Advanced Scenario 7: Vincent and Faith Hunter Interview Notes • Vincent is a 5th grade teacher at a public school. Vincent and Faith are married and choose to file Married Filing Jointly on their 2024 tax return. • Vincent worked a total of 1,800 hours in 2024. During the school year, he spent $844 on unreimbursed classroom expenses. • Faith retired in 2021 and began receiving her pension on November 1st of that year. She explains that this is a joint and survivor annuity. She has already recovered $1,259 of the cost of the plan. • Vincent settled with his credit card company on an outstanding bill and brought the Form 1099-C to the site. They aren’t sure how it will impact their tax return for tax year 2024. The Hunters determined that they were solvent as of the date of the canceled debt. • Faith received $280 from Jury duty. • Their daughter, Hope, is in her second year of college pursuing a bachelor’s degree in Physics at a qualified educational institution. She received a scholarship, and the terms require that it be used to pay tuition. Box 2 was not filled in and Box 7 was not checked on her Form 1098-T for the previous tax year. The Hunters provided Form 1098-T and an account statement from the college that included additional expenses. The Hunters paid $1,500 for books and equipment required for Hope's courses. This information is also included on the college statement of account. The Hunters claimed the American Opportunity Credit last year for the first time. • Hope does not have a felony drug conviction. • They are all U.S. citizens with valid Social Security numbers. Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Review this taxpayer’s scenario information, Intake/Interview Sheet, and other tax forms in Publication 6744 (or click here to download this scenario). Advanced Scenario 7: Retest Questions The taxable portion of Faith's pension from Liberty Enterprises using the simplified method is $23,899.

Based on the information provided, let's address the key tax considerations for Vincent and Faith Hunter's 2024 tax return: 1. **Vincent's Unreimbursed Classroom Expenses**: As a teacher, Vincent can claim up to $300 of unreimbursed classroom expenses as an adjustment to income on their tax return. Since he spent $844, he can deduct $300. 2. **Faith's Pension**: The taxable portion of Faith's pension is $23,899, as determined using the simplified method. This amount should be reported as taxable income on their tax return. 3. **Canceled Debt (Form 1099-C)**: Since Vincent and Faith were solvent at the time of the debt cancellation, the canceled debt amount reported on Form 1099-C is generally considered taxable income. This amount should be included in their gross income unless they qualify for an exclusion or exception. 4. **Jury Duty Income**: Faith's $280 from jury duty is taxable and should be reported as income. 5. **Education Expenses and Credits**: Since Hope is in her second year of college and the Hunters claimed the American Opportunity Credit last year for the first time, they can claim it again this year. The credit can be claimed for up to four years. The Hunters paid $1,500 for books and equipment, which are qualified expenses. They should ensure that the scholarship is used for tuition and not for other expenses to maximize the credit. 6. **Filing Status

Get Started

Get your tax questions answered