Advanced Scenario $8$: Julia Oakley

Directions

Using the tax software, complete the tax return, including Form $1040$ and all appropriate forms, schedules, or

worksheets. Answer the questions following the scenario.

When entering Social Security numbers $($SSNs$)$ or Employer Identification Numbers $($EINs$),$ replace the

$xs$ as directed, or with any four digits of your choice.

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:

$$150$ for insulated box rental

$$ $$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:

$$80$ for business parking

$$300$ for speeding ticket

$$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 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, $9,500$ miles were personal and commuting 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 for the current year.

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

Julia spent $$300$ on textbooks for her classes.

Julia purchased a house on $\frac{01}{01}\frac{?}{2020}.$ She paid $$375,000$ for the house, with $$100,000$ of the purchase

attributable to land. She used the house as a rental property for the entire time since purchase. Her yearly

property taxes are $$12,000$ and property insurance is $$1,000$ for the year. The house is leased for $$3,000/$

month.

Last year she contributed $$1,000$ to her church, $$100$ to Girl Scouts of American in exchange for cookies,

$$10$ to a homeless person, $$100$ of groceries to the food bank and she volunteered her services for $1$ hour

of delivery work to the food bank. Normally she would have been paid $$50$ for the delivery work.

The property taxes for her home were $$15,000.$ Her home insurance was $$3,000.$