9 SCHEDULE A (Form 1040) Itemized Deductions Go to www.irs.gov/ScheduleA for instructions and the latest information. OMB No. 1545-0074 Department of the Treasury Attach to Form 1040. (99) | Caution: If you are claiming a net qualified disaster loss on Form 4684, see the instructions for line 16. 2018 Internal Revenue Service Attachment Name(s) shown on Form 1040 Sequence No. 07 Your social security number Medical Caution. Do not include expenses reimbursed or paid by others. and 0 Dental Medical and dental expenses (see instructions) Expenses 2 Enter amount from Form 1040, line 7 2 3 Multiply line 2 by 7.5% (0.075). 0 4 Subtract line 3 from line 1. If line 3 is more than line 1, enter -0- Taxes You 5 State and local taxes. Paid a State and local income taxes or general sales taxes. You may include either income taxes or general sales taxes on line 5a, but not both. If you elect to include general sales taxes instead of income taxes, check this box . D 5a b State and local real estate taxes (see instructions) 5b 0 c State and local personal property taxes 5c d Add lines 5a through 5c . . 5d 0 e Enter the smaller of line 5d or $10,000 ($5,000 if married filing separately) . . 5e 0 6 Other taxes. List type and amount > 6 0 7 Add lines 5e and 6 7 Interest You Home mortgage interest and points. If you didn't use all of your Paid home mortgage loan(s) to buy, build, or improve your home, Caution: Your see instructions and check this box mortgage interest deduction may be a Home mortgage interest and points reported to you on Form limited (see 1098 ga instructions b Home mortgage interest not reported to you on Form 1098. If paid to the person from whom you bought the home, see instructions and show that person's name, identifying no., and address 8b c Points not reported to you on Form 1098. See instructions for special rules 8c d Reserved 8d e Add lines 8a through 8c Be 0 9 Investment interest. Attach Form 4952 if required. See instructions 9 10 Add lines 8e and 9 10 Gifts by cash or check. If you made any gift of $250 or more, . . .. 0 Gifts to 11 Charity see instructions 11 12 If you made a Other than by cash or check. If any gift of $250 or more, see gift and got a instructions. You must attach Form 8283 if over $500 12 benefit for it, 13 Carryover from prior year see instructions. 14 Add lines 11 through 13 13 14 Casualty and Theft Losses 15 Casualty and theft loss(es) from a federally declared disaster (other than net qualified instructions disaster losses). Attach Form 4684 and enter the amount from line 18 of that form. See 0 Other 16 Other - from list in instructions. List type and amount 15 Itemized Deductions 0 Total 17 16 Itemized Add the amounts in the far right column for lines 4 through 16. Also, enter this amount on Form 1040, line 8 Deductions 18 If you elect to itemize deductions even though they are less than your standard 17 deduction, check here KIA For Paperwork Reduction Act Notice, see the instructions for Form 1040. Schedule A (Form 1040) 2018COMPREHENSIVE PROBLEM 1:7-62 Dan and Cheryl are married, file a joint return, and have no children. Dan, age 45, is an independent contractor working in pharmaceutical sales and Cheryl, age 42, is a nurse at a local hospital. Dan's SSN is 400-20-1000 and Cheryl's SSN is 200-40-8000 and they reside at 2033 Palmetto Drive, Atlanta, GA 30304. Dan is paid according to commissions from sales, and he has no income tax or payroll tax withholdings. Dan operates his busi- ness from his home office. During 2018, Dan earned total commissions in his business of $125,000. Cheryl earned a salary during 2018 of $45,400, with the following withhold- ings: $6,000 federal taxes, $1,800 state taxes, $2,815 OASDI, and $658 Medicare taxes. During 2018, Dan and Cheryl had interest income from corporate bonds and bank ac- counts of $1,450 and qualified dividends from stocks of $5,950. Dan also actively trades stocks and had the following results for 2018: LTCG $4,900 LTCL (3,200) STCG 0 STCL (7,800) He had no capital loss carryovers from previous years. Dan does a considerable amount of travel in connection with his business and uses his own car. During 2018, Dan drove his car a total of 38,000 miles, of which 32,000 were business related. He also had business-related parking fees and tolls during the year of $280. Dan uses the mileage method for deducting auto expenses. Dan also had the follow- ing travel expenses while away from home during the year: Hotel $4,200 Meals 820 Entertainment of customers 1,080 Tips 100 Laundry and cleaning 150 Total $6,350 Dan uses the simplified method to deduct expenses for his office-in-home. His office measures 15 feet by 12 feet in size. Cheryl incurred several expenses in connection with her nursing job. She paid $450 in professional dues, $200 in professional journals, and $350 for uniforms. Dan and Cheryl had the following other expenditures during the year: Health insurance premiums (after-tax) $ 4,400 Doctor bills 470 Real estate taxes on home 6,800 Personal property taxes 1,400 Mortgage interest-all deductible 7,400 Charitable contributions-cash 9,000 Charitable contributions-GE stock owned for 5 years: FMV $8,000 Adjusted basis 2,000 Tax preparation fees 750 During 2018, Dan and Cheryl paid federal and state estimated tax payments on a quarterly basis. Federal payments for the year amounted to $24,000. State estimated pay- ments for the year amounted to $2,200. Compute Dan and Cheryl's income tax liability for 2018. Disregard the alternative minimum tax