$2023$ Advanced Exam $-$ Advanced Scenario $8$: Julia Oakley $-$ Question $5$ of $7.$

Interview Notes

$$ Julia is a data entry clerk, age $26,$ and single.

$$ Julia has investment income and a consolidated broker$$s statement.

$$ Julia is self$-$employed delivering groceries for Quick Market on the weekends. She received a Form $1099-$NEC and a Form $1099-$K$.$ She received additional cash payments of $$535.$

$$ Julia uses the cash method of accounting. She uses business code $492000.$

$$ Julia provided a statement from the grocery delivery service indicating the fees paid for the year. These fees are considered ordinary and necessary for the grocery delivery business:

o $$150$ for insulated box rental

o $$50$ for vehicle safety inspection $($required by Quick Market$)$

o $$600$ for Quick Market fees

$$ Julia also kept receipts for the following out$-$of$-$pocket expenses:

o $$80$ for business parking

o $$300$ for speeding ticket

o $$160$ for Julia's lunches

$$ Julia$$s record keeping application shows she has driven a total of $2,500$ miles during and between deliveries. She also drove $1,500$ miles between her home and the first and last delivery of each day.

o She placed her only vehicle, an SUV, in service on $3/15/2020.$ The total mileage on her SUV for tax year $2023$ was $12,000$ miles. Of that, $8,000$ miles were personal miles. Julia will take the standard business mileage rate.

$$ Julia is paying off her student loan from $2017,$ when she completed her undergraduate degree.

$$ Julia is working towards her Master of Education degree to start a new career as an Associate Professor. She took a few college courses this year at an accredited college.

$$ Julia took an early distribution of $$3,000$ from her IRA in April. She used $$2,400$ of the IRA distribution to pay her educational expenses.

$$ If Julia has a refund, she would like it deposited into her checking account.

$27.$ Julia meets the qualifications to claim the American Opportunity Credit.

a$.$ True

b$.$ False

submitted