ACC $330$ Instructions for Tax Research #$21.$ Assume you are a self$-$employed CPA who prepared the $2022$ federal and state income tax returns for your clients, Chance and Chloe Smith, in March of $2023.$ In early April, Chance and Chloe sent you an email thanking you for preparing their returns and letting you know they plan to start a family in a couple of years and although they both have full$-$time jobs, they are considering starting their own part$-$time $($for now$)$ business$($es$)$ to earn$/$save extra money to take a trip before they have children. They attached the following list of questions to their email. Prepare a professional memo addressing their questions and submit it in Canvas.a$.$ Chloe plans to start a wedding planning business. Her questions follow:i$.$ We have two guest bedrooms and I plan to turn one into an office. I plan to use it only for my business and to meet with clients there. I plan to use my personal cell phone, laptop, and internet for my business, too. I plan to purchase a copier$/$scanner and camera to use only for my business. I also need a desk, desk chair, client chair, and small table. I plan to purchase dressy clothes for viewing wedding venues with clients. Can I deduct all my purchases and expenses for my new business? I can deduct the cost of the internet, right? Friends told me I can deduct some household expenses like property tax, mortgage interest, and utilities, is that correct?ii$.$ I will be using my personal vehicle to meet with clients and vendors at wedding venues, shows, and other events. What vehicle expenses can I deduct? Do I need to keep any records or receipts?iii. Chance has a sister in New York who we are visiting in May; we already have our flights booked. This is perfect timing to get wedding planning ideas in New York and there is a one$-$day conference for wedding planners while we are there. Friends told me I can turn my personal trip into a business trip since I will go to the conference one day. Are they correct? Does that mean the business can pay for our trip?iv$.$ Although I am planning to meet with clients in my office nights and weekends, my friends told me I can meet with them over evening dinners or weekend meals at a restaurant to have the business pay for them. Does that mean I can invite my spouse and the clients spouse to join us for dinner and drinks on my business?b$.$ Chance wants to have a business where he works evenings and weekends. He plans to mow lawns in the summer and plow snow in the winter. His questions follow:i$.$ I will not need an office or place to meet with my lawn care or snowplow customers; I plan to call them on my cell phone and meet with them at their home or business. I have a truck and both a push and riding lawnmower I plan to also use in my business. I will need to buy a plow I can attach to the front of the truck for snowplowing and a trailer to the back of it to haul the lawn mowers. I can deduct the cost of the plow attachment and trailer, right?ii$.$ Since I plan to have a completely paperless business, I want an amazing presence online, so I plan to hire someone to create and manage my business website, and social media accounts such as Instagram, Face Book, etc. Can I just pay this person cash or is this person my employee? What if I hire a web developing company? Ive never done anything like this so I dont know what to do$.$iii. Since my truck and lawnmowers will be used in my business, I can deduct all the gas I use in them, right? My day job is only $10$ minutes from my house so I dont use much gas and our lawn is only a few acres so my friends thought it was immaterial. I can have the business pay for all the maintenance and service appointments, too, right?iv$.$ I dont have any clients yet, but Im assuming some of my clients lawns will need to be mowed during weekdays. Because Im only available nights and weekends, my $20-$year brother said hed help me out. I can just pay him cash or Venmo him a few bucks now and then, right? My sister thinks I need to give him a W$-2$ and my brother$-$in$-$law thinks I need to give him a $1099$ or something. Any help you can give me would be great.v$.$ If I decide to accept a few lawncare clients who have homes in La Crecent, Minnesota which is only $5$ minutes from where we live, is there anything I need to know? A coworker said I might have to file a Minnesota return, too. Why would I have to do that, I live in La Crosse, Wisconsin? Summary of $100$ Points Possible Introduction $(5$ points$)$ Professionally written $/$ Content Questions $(9$ @ $10$ points each$)$ Professionally writtenQuality $-$ Fully answering the question$($s$)$ Content $-$ FactualSource noted or linked in parentheses after each. Conclusion $(5$ points$)$ Professionally written $/$ Content