Ashley Panda lives at 1310 Meadow Lane, Wayne, OH 43466, and her Social Security number is 123-45-6777. Ashley is single and has a 20-year-old son, Bill. His Social Security number is 111-11-1112. Bill lives with Ashley, and she fully supports him. Bill spent 2020 traveling in Europe and was not a college student. He had gross income of $4,655 in 2020. Bill paid $4,000 of lodging expenses that Ashley reimbursed after they were fully documented. Ashley paid the $4,000 to Bill using a check from her sole proprietorship. That amount is not included in the items listed below. Ashley had substantial health problems during 2020, and many of her expenses were not reimbursed by her health insurance. Ashley owns Panda Enterprises LLC (98-7654321), a data processing service that she reports as a sole proprietorship. Her business is located at 456 Hill Street, Wayne, OH 43466. The business activity code is 514210. Her 2020 Form 1040, Schedule C for Panda Enterprises shows revenues or $315,000, office expenses of $65,759, employee salary of $63,000, employee payroll taxes of $4,820, business meal expenses (before the 50% reduction) of $22,000, and rent expense of $34,000. The rent expense includes payments related to renting an office ($30,000) and payments related to renting various equipment ($4,000). There is no depreciation because all depreciable equipment owned has been fully depreciated in previous years. No fringe benefits are provided to the employee. Ashley personally purchases health insurance on herself and Bill. The premiums are $23,000 per year. Ashley has an extensive stock portfolio and has prepared the following analysis: Per-Share Number of Date Per-Share Total Date Sold Selling Shares Purchased Cost Dividends Stock Price 10 10/18/2019 10/11/2020 $80 $74 $30 Beige Garland Peach 43 70 30 15 10/11/2013 10/11/2020 3/10/2020 8/11/2020 157 33 62 45 Note: Ashley received a Form 1099-B from her stockbroker that included the adjusted basis and sales proceeds for each of her stock transactions. The per-share cost includes commissions, and the per-share selling price is net of commissions. Also, the dividends are the actual dividends received in 2020, and these are both ordinary dividends and qualified dividends. Ashley had $800 of interest income from State of Ohio bonds and $600 of interest income on her Wayne Savings Bank account. She paid $25,000 of alimony to her former husband (divorce finalized in June 2017). His Social Security number is 123-45-6788. Ashley itemizes her deductions and provides the following information, which may be relevant to her retum: Item Amount Comment $9,748 Does not include health insurance premiums. Unreimbursed medical expenses for Ashley State income taxes paid Real property taxes on personal residence Interest paid on home mortgage (Form 1098) 1,830 3,230 8,137 Charitable contributions 1.399 The loan is secured by the residence and was incurred when the home was purchased $940 cash payments to Ashley's church and $459 cash payments made to homeless persons for whom she felt sorry. She can document all the expenditures. Amount per sales tax table. Sales taxes 619 Ashley paid $27,000 in estimated Federal income taxes, did not engage in any virtual currency transactions during the year, does not want any of her taxes to finance presidential elections, has no foreign bank accounts or trusts, and wants any refund to be applied against her 2021 taxes. Ashley received the appropriate coronavirus recovery rebates (economic impact payments); related questions in ProConnect Tax should be ignored. Compute Ashley's net tax payable or refund due for 2020. If you use tax forms for your computations, you will need Form 1040 and its Schedules 1, 2, 3, A, C, D, and SE, Form 1949 and the Qualified Dividends and Capital Gain Tax Worksheet. Ashley qualifies for the $ 199A deduction for qualified business income. Make realistic assumptions about any missing data. If an amount box does not require an entry or the answer is zero, enter "0". Enter all amounts as positive numbers, unless otherwise instructed. It may be necessary to complete the tax schedules before completing Form 1040. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar. Use the Tax Rate Schedule provided. Do not use the Tax Tables. Form Department of the Treasury - Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2020 OMB No. 1545-0074 IRS Use Only Filing Status Last name Your first name and middle initial Ashley Panda If joint return, spouse's first name and middle initial Your social security number 123-45-6777 Spouse's social security number Last name Apt. no. Home address (number and street). If you have a P.O. box, see instructions. 1310 Meadow Lane Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. State ZIP code City, town, or post office. If you have a foreign address, also complete spaces below. Wayne, OH 43466 Foreign country name Foreign province/state/county Foreign postal code At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? Standard Someone can claim: Deduction Age/Blindness You: Spouse: (3) Relationship (see instructions): (1) First name Last name (2) Social Security number (4) / if qualifies for (see instructions): Child tax credit Credit for other dependents to you Dependents If more than four dependents, see instructions and check here D 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 Attach 2a Tax-exempt interest .. 2a b Taxable interest 2b Sch. Bir required 3a Qualified dividends... 3a b Ordinary dividends... 3b 4a IRA distributions .. b Taxable amount 4b 5a Pensions and annuities 5a b Taxable amount 5b 6a Social security benefits b Taxable amount 6b 7 Capital gain or loss). Attach Schedule D if required. If not required, check here.. 7 8 Other income from Schedule 1, line 9 8 9 Add lines 1, 2, 3, 4, 5b, 6, 7, and 8. This is your total income 9 10 Adjustments to income: Standard Deduction for- Single or Married filing separately, $12,400 Married filing jointly or Qualifying widower) $24,800 Head of household $18,650 If you checked any box under Standard Deduction, see instructions. a From Schedule 1, line 22 10a b Charitable contributions if you take the standard deduction See instructions 10b c Add lines 10a and 10b. These are your total adjustments to income. 10c 11 Subtract line 10c from line 9. This is your adjusted gross income.. 11 12 12 Standard deduction or itemized deductions (from Schedule A). 13 Qualified business income deduction. Attach Form 8995 or Form 1995-A. 13 14 14 Add lines 12 and 13 Taxable income. Subtract line 14 from line 11. Ir zero or less, enter - - 15 15 BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2020) Form 1040 (2020) Ashley Panda 123-45-6777 Page 2 16 Tax (see instructions). Check if any from Form(s): 1 8814 20 4972 30 16 17 Amount from Schedule 2, line 3 17 18 Add lines 16 and 17 18 19 19 Child tax credit or credit for other dependents Amount from Schedule 3, line 7 20 20 21 Add lines 19 and 20 21 22 Subtract line 21 from line 18. If zero or less, enter -O- 22 23 Other taxes, including self-employment tax, from Schedule 2, line 10 23 24 Add lines 22 and 23. This is your total tax 24 25 Federal income tax withheld from: . Form(s) W-2 a 25a b Form(s) 1099.. 25b Other forms (see instructions). c 250 250 26 d Add lines 25a through 25c. If you have a 26 2020 estimated tax payments and amount applied from 2019 return qualifying child, attach Sch. EIC. Earned income credit (EIC) If you have 27 27 nontaxable combat pay, see 28 Additional child tax credit. Attach Schedule 8812 instructions. 28 American opportunity credit from Form 8863, line 8 29 29 Recovery rebate credit. See instructions 30 30 Amount from Schedule 3, line 13 31 31 32 Add lines 27 through 31. These are your total other payments and refundable credits 32 32 33 Add lines 25d, 26, and 32. These are your total payments. 33 Refund 34 34 If line 33 is more than line 24, subtract line 24 from line 33. This is the amount you overpaid 35a Amount of line 34 you want refunded to you. If Form 8888 is attached, check here b Routing number c Type: Checking Savings 35a Direct deposit? See instructions. d Account number 36 Amount of line 34 you want applied to your 2021 estimated tax 36 :- 38 | Amount 37 Subtract line 33 from line 24. This is the amount you owe now 37 You Owe Note: Schedule H and Schedule Se filers, line 37 may not represent all of the taxes you For details on how owe for 2020. See Schedule 3, line 12e, and its instructions for details. to pay, see instructions. 38 Estimated tax penalty (see instructions). Third Party Do you want to allow another person to discuss this return with the IRS? See instructions Yes. Complete below. No Designee Designee's Phone Personal identification name number (PIN) Sign Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than Here taxpayer) is based on all information of which preparer has any knowledge. Your signature Date Your occupation If the IRS sent you an Identity Joint return? Protection PIN, enter it here See Manager (see inst.) instructions. Keep a copy for Spouse's signature. If a joint Date Spouse's occupation If the IRS sent your spouse an your records. return, both must sign. Identity Protection PIN, enter it here (see inst.) no. Phone no. Email address PTIN Check if : Self-employed Preparer's name Paid Preparer's signature Date Self-Prepared Preparer Firm's name Use Only Firm's address Go to www.irs.gov/Form 1040 for instructions and the latest information. Phone no. Firm's EIN Form 1040 (2020) Additional Income and Adjustments to Income SCHEDULE 1 OMB No. 1545-0074 (Form 1040) 2020 Department of the Treasury Attach to Form 1040, 1040-SR, or 1040-NR. Attachment Internal Revenue Service Go to www.irs.gov/Form1040 for instructions and the latest information. Sequence No. 01 Name(s) shown on Form 1040, 1040-SR, or 1040-NR Your social security number Ashley Panda 123-45-6777 Part I Additional Income 1 Taxable refunds, credits, or offsets of state and local income taxes 1 2a Alimony received. 2a b Date of original divorce or separation agreement (see instructions) 3 Business income or loss). Attach Schedule C... 3 4 4 5 5 6 Other gains or losses). Attach Form 4797 ...... Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or (loss). Attach Schedule F. Unemployment compensation.. Other income. List type and amount 6 7 7 B 8 9 Combine lines 1 through 8. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 8 9 Part II Adjustments to Income 10 Educator expenses 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 12 Health savings account deduction. Attach Form 8889 12 13 Moving expenses for members of the Armed Forces. Attach Form 3903 13 14 Deductible part of self-employment tax. Attach Schedule SE 14 15 Self-employed SEP, SIMPLE, and qualified plans.. 15 16 Self-employed health insurance deduction. 16 17 Penalty on early withdrawal of savings. 17 18a 123-45-6788 18a Alimony paid b Recipient's SSN c Date of original divorce or separation agreement (see instructions) 19 IRA deduction 06/2017 19 20 Student loan interest deduction .. 20 21 Tuition and fees. Attach Form 8917 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 10a. 22 BAA For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 1 (Form 1040) 2020 Schedule 2 Complete the Ashley Panda's Schedule 2. SCHEDULE 2 OMB No. 1545-0074 Additional Taxes (Form 1040) 2020 Department of the Treasury Attach to Form 1040, 1040-SR, or 1040-NR. Attachment Internal Revenue Service Go to www.irs.gov/Form1040 for instructions and the latest information. Sequence No. 02 Name(s) shown on Form 1040, 1040-SR, or 1040-NR Your social security number Ashley Panda 123-45-6777 Part I Tax 1 Alternative minimum tax. Attach Form 6251 1 2 Excess advance premium tax credit repayment. Attach Form 8962 2 Add lines 1 and 2. Enter here and include on Form 1040, 1040-SR, or 1040-NR, line 17 3 Part II Other Taxes 4 Self-employment tax. Attach Schedule SE 4 5 5 Unreported social security and Medicare tax from Form: a 4137 bo 8919 6 Additional tax on IRAs, other qualified retirement plans, and other tax-lavored accounts. Attach Form 5329 ir required.. 7a Household employment taxes. Attach Schedule H.. 6 7a b Repayment of first-time homebuyer credit from Form 5405. Attach Form 5405 if required 7b 8 8 Taxes from: a Form 1959 boForm 8960 Instructions; enter code(s) 9 Section 965 net tax liability installment from Form 965-A.. 9 10 Add lines 4 through 8. These are your total other taxes. Enter here and on Form 1040 or 1040-SR, line 23, or Form 1040-NR, line 23b. 10 BAA For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 2 (Form 1040) 2020 SCHEDULE A OMB No. 1545-0074 Itemized Deductions (Form 1040) Go to www.irs.gov/ScheduleA for instructions and the latest information. 2020 Attach to Form 1040 or 1040-SR. Attachment Department of the Treasury Caution: If you are claiming a net qualified disaster loss on Form 4684, see the Internal Revenue Service (99) instructions for line 16. Sequence No. 07 Name(s) shown on Form 1040 or 1040-SR Your social security number Ashley Panda 123-45-6777 Caution: Do not include expenses reimbursed or paid by others. Medical 1 Medical and dental expenses (see instructions) and Dental 2 Enter amount from Form 1040 or 1040- Expenses SR, line 11. 2 3 Multiply line 2 by 7.5% (0.075) 1 Taxes You Paid 4 Subtract line 3 from line 1. Ir line 3 is more than line 1, enter-O- 5 State and local taxes. 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... b State and local real estate taxes (see instructions) 5a 5b 5c c State and local personal property taxes d Add lines 5a through 5c... e Enter the smaller of line 5d or $10,000 ($5,000 if married filing separately). 5d Se 6 Other taxes. List type and amount 7 Add lines 5e and 6 Interest You Paid 8 Home mortgage interest and points. If you didn't use all of your home mortgage loan(s) to buy, build, or improve your home, see instructions and check this box. a Home mortgage interest and points reported to you on Form 1098. See instructions if limited b Home mortgage interest not reported to you on Form 1098. See instructions if limited. If paid to the person from whom you bought the home, see instructions and show that person's name, identifying no., and address Caution: Your mortgage interest deduction may be limited (see instructions). sa Sb c Points not reported to you on Form 1098. See instructions for special rules d Mortage insurance premiums (see instructions) 8d e Add lines sa through Sd. Se 9 9 Investment interest. Attach Form 4952 if required. See instructions. Add lines Se and 9 10 10 11 Gifts by cash or check. If you made any gift of $250 or more, Gifts to Charity See instructions 11 14 Caution: 12 Other than by cash or check. If you made any gift of $250 or more, 12 If you made a see instructions. You must attach Form 8283 ir over $500 gift and got a 13 Carryover from prior year 13 benefit for it see instructions. 14 Add lines 11 through 13. Casualty and 15 Casualty and theft loss(es) from a federally declared disaster (other than net qualified disaster Theft Losses losses). Attach Form 4684 and enter the amount from line 18 of that form. See instructions. Other 16 Other-from list in instructions. List type and amount Itemized Deductions 15 16 Total 17 Add the amounts in the far right column for lines 4 through 16. Also, enter this amount on Form 1040 or 1040-SR, line 12 17 Itemized Deductions 18 If you elect to itemize deductions even though they are less than your standard deduction, check this box.... BAA For Paperwork Reduction Act Notice, see the Instructions for Forms 1040 and 1040-SR. Schedule A (Form 1040) 2020 SCHEDULEC (Form 1040) Department of the Treasury Internal Revenue Service (99) Profit or Loss From Business OMB No. 1545-0074 (Sole Proprietorship) 2020 Go to www.irs.gov/Schedule for instructions and the latest information. Attach to Form 1040, 1040-SR, 1040-NR, or 1041; partnerships generally Attachment must file Form 1065. Sequence No. 09 Social security number (SSN) 123-45-6777 Name of proprietor Ashley Panda B Enter code from instructions Principal business or profession, including product or service (see instructions) Data Processing Service E Business name. Ir no separate business name, leave blank. D Employer ID number (EIN) (see instr.) Panda Services, LLC Business address (including suite or room no.) 456 Hill Street City, town or post office, state, and ZIP code Wayne OH 43466 Accounting method: (1) Cash (2) Accrual (3) Other (specify) Did you "materially participate in the operation of this business during 2020? Ir "No," see instructions for limit on losses. Yes No If you started or acquired this business during 2020, check here. F G H 1 Did you make any payments in 2020 that would require you to file Form(s) 1099? See instructions Yes No Yes NO 1 Ir "Yes," did you or will you file required Forms 1099? Part I Income 1 Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W-2 and the "Statutory employee" box on that form was checked 2 Returns and allowances 3 Subtract line 2 from line 1. 4 Cost of goods sold (from line 42). 5 Gross profit. Subtract line 4 from line 3 2 3 5 6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) 6 7 Gross income. Add lines 5 and 6 7 Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising.. 8 18 Orfice expense (see instructions) 18 9 Car and truck expenses (see 19 Pension and profit-sharing plans 19 9 20 Rent or lease (see instructions): instructions). 10 Commissions and fees. 10 a Vehicles, machinery, and equipment.... 20a 11 Contract labor (see instructions) .. 11 b Other business property.... 20b 12 21 21 12 Depletion.. 13 Depreciation and section 179 Repairs and maintenance. Supplies (not included in Part III) 22 22 expense deduction (not included 23 Taxes and licenses 23 13 24 Travel and meals: in Part III) (see instructions).. 14 Employee benefit programs (other than on line 19). a Travel 24a 14 b Deductible meals (see 15 Insurance (other than health).... 15 instructions) 24b 16 Interest (see instr.): 25 Utilities. 25 a Mortgage (paid to banks, etc.)... 16a 26 Wages (less employment credits) 26 b Other 16b 27a Other expenses (from line 48). 27a 17 Legal and professional services... 17 b Reserved for future use 27b 28 Total expenses before expenses for business use of home. Add lines & through 27a. 28 29 29 Tentative profit or loss). Subtract line 28 from line 7 30 Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method. See instructions. Simplified method filers only: enter the total square footage of: (a) your home: and (b) the part of your home used for business: Use the Simplified Method Worksheet in the instructions to figure the amount to enter on line 30 30 31 31 Net profit or (loss). Subtract line 30 from line 29. If a profit, enter on both Schedule 1 (Form 1040), line 3, and on Schedule SE, line 2. (If you checked the box on line 1, see instructions). Estates and trusts, enter on Form 1041, line 3. } . If a loss, you must go to line 32 32 If you have a loss, check the box that describes your investment in this activity (see instructions). a . If you checked 32a, enter the loss on both Schedule 1 (Form 1040), line 3, and on Schedule SE, 32a All investment is line 2. (If you checked the box on line 1, see the line 31 instructions). Estates and trusts, enter on Form at risk. 1041, line 3 32b Some investment If you checked 32b, you must attach Form 6198. Your loss may be limited. is not at risk. BAA For Paperwork Reduction Act Notice, see the separate instructions. Schedule C (Form 1040) 2020 Complete Ashley's Schedule D. If required, use the minus sign to indicate a loss. - SCHEDULED Capital Gains and Losses OMB No. 1545-0074 (Form 1040) 2020 Attach to Form 1040, 1040-SR, or 1040-NR. Department of the Treasury Go to www.irs.gov/Scheduled for instructions and the latest information. Attachment Internal Revenue Service (99) Use Form 8949 to list your transactions for lines 1b, 2, 3, 8b, 9, and 10. Sequence No. 12 Name(s) shown on return Your social security number Ashley Panda 123-45-6777 Did you dispose of any investment(s) in a qualified opportunity fund during the tax year? Yes No II "Yes," attach Form 8949 and see its instructions for additional requirements for reporting your gain or loss. Part I Short-Term Capital Gains and Losses - Generally Assets Held One Year or Less (see instructions) (h) Gain or See instructions for how to figure the amounts to enter on the (9) (loss) lines below. Adjustments to Subtract column (d) (e) gain or loss from (e) from column Proceeds (sales Cost (or other Form(s) 8949, Part This form may be easier to complete if you round off cents to (d) and combine price) I line 2 column whole dollars. the result with (9) column (9) 1a Totals for all short-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 1b.. 1b Totals for all transactions reported on Form(s) 8949 with Box A checked. 2 Totals for all transactions reported on Form(s) 8949 with Box B checked basis) 3 Totals for all transactions reported on Form(s) 8949 with Box C checked. 4 4 Short-term gain from Form 6252 and short-term gain or loss) from Forms 4684,6781, and 8824. 5 Net short-term gain or loss) from partnerships, Scorporations, estates, and trusts from Schedule(s) K-1... 5 6 6 Short-term capital loss carryover. Enter the amount, if any, from line 8 of your Capital Loss Carryover Worksheet in the instructions... 7 Net short-term capital gain or (loss). Combine lines ia through 6 in column (h). If you have any long-term capital gains or losses, go to Part II below. Otherwise, go to Part III on the back 7 Part II Long-Term Capital Gains and Losses - Generally Assets Held More Than One Year (see instructions) (h) Gain or See instructions for how to figure the amounts to enter on the lines (9) (loss) below. Adjustments to Subtract column (d) (e) gain or loss from (e) from column Proceeds (sales Cost (or other Form(s) 8949, This form may be easier to complete if you round off cents to (d) and combine price) basis) Part II, line 2 whole dollars. the result with column (9) column (9) Ba Totals for all long-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line Bb...... Bb Totals for all transactions reported on Form(s) 8949 with Box D checked. 9 Totals for all transactions reported on Form(s) 8949 with Box E checked.. 10 Totals for all transactions reported on Form(s) 8949 with Box F checked.. 11 Gain from Form 4797, Part I: long-term gain from Forms 2439 and 6252; and long-term gain or loss) from Forms 4684, 6781, and 8824 12 Net long-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 12 13 Capital gain distributions. See the instrs ...... 13 14 Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Loss Carryover Worksheet in the instructions.. 14 15 Net long-term capital gain or (loss). Combine lines &a through 14 in column (h). Then, go to Part III on the back 15 BAA For Paperwork Reduction Act Notice, see your tax return instructions. Schedule D (Form 1040) 2020 11 Ashley Panda 123-45-6777 Page 2 Schedule D (Form 1040 or 1040-SR) 2020 Part III Summary 16 Combine lines 7 and 15 and enter the result 16 If line 16 is a gain, enter the amount from line 16 on Form 1040, 1040-SR, or 1040-NR, line 7. Then, go to line 17 below. If line 16 is a loss, Skip lines 17 through 20 below. Then, go to line 21. Also be sure to complete line 22. If line 16 is zero, skip lines 17 through 21 below and enter -- on Form 1040, 1040-SR, or 1040-NR, line 7. Then, go to line 22. 17 Are lines 15 and 16 both gains? Yes. Go to line 18. No. Skip lines 18 through 21, and go to line 22. 18 If you are required to complete the 28% Rate Gain Worksheet (see instructions), enter the amount, ir any, from line 7 or that worksheet V 18 19 If you are required to complete the Unrecaptured Section 1250 Gain Worksheet (see instructions), enter the amount, if any, from line 18 of that worksheet. 19 20 Are lines 18 and 19 both zero or blank and are you not filing Form 4952? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 16. Don't complete lines 21 and 22 below. No. Complete the Schedule D Tax Worksheet in the instructions. Don't complete lines 21 and 22 below. 21 Ir line 16 is a loss, enter here and on Form 1040, 1040-SR, or 1040-NR, line 7, the smaller of: The loss line 16; or ($3,000), or if married filing separately, ($1,500) } 21 Note: When figuring which amount is smaller, treat both amounts as positive numbers. 22 Do you have qualified dividends on Form 1040 or 1040-SR, line 3a; or Form 1040-NR, line 10b? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 12a (or in the instructions for Form 1040-NR, line 42). No. Complete the rest of Form 1040, 1040-SR, or 1040-NR. Schedule D (Form 1040) 2020 Note: This problem is for the 2020 tax year. Complete Ashley's Schedule SE. Hint: Compute OASDI and HI separately. If required, round to the nearest dollar. SCHEDULE SE OMB No. 1545-0074 Self-Employment Tax (Form 1040) 2020 Department of the Treasury Go to www.irs.gov/ScheduleSE for instructions and the latest information. Attachment Internal Revenue Service (99) Attach to Form 1040, 1040-SR, or 1040-NR. Sequence No. 17 Name of person with self-employment income (as shown on Form 1040, Social security number of person 1040-SR, or 1040-NR) with self-employment income 123-45-6777 Ashley Panda Part I Self-Employment Tax Note: If your only income subject to self-employment tax is church employee income, see instructions for how to report your income and the definition of church employee income. A If you are a minister, member of a religious order, or Christian Science practitioner and you filed Form 4361, but you had $400 or more of other net earnings from self-employment, check here and continue with Part I Skip lines ta and 1b if you use the farm optional method in Part II. See instructions. la Net farm profit or (loss) from Schedule F, line 34, and farm partnerships, Schedule K-1 (Form 1065), box 14, code A... If you received social security retirement or disability benefits, enter the amount of Conservation Reserve Program payments included on Schedule F, line 4b, or listed on Schedule K-1 (Form 1065), box 20, code AH Skip line 2 if you use the nonfarm optional method in Part II. See instructions. 2 Net profit or loss) from Schedule C, line 31; and Schedule K-1 (Form 1065), box 14, code A (other than farming). See instructions for other income to report or if you are a minister or member of a religious order 3 Combine lines 1a, 1b, and 2 1a 1b 2 3 4a If line 3 is more than zero, multiply line 3 by 92.35% (0.9235). Otherwise, enter amount from line 3...... 4b Note: If line 4a is less than $400 due to Conservation Reserve Program payments on line 1b, see instructions. b If you elect one or both of the optional methods, enter the total of lines 15 and 17 here c Combine lines 4a and 4b. Ir less than $400, stop: you don't owe self-employment tax. Exception: If less than $400 and you had church employee income, enter -- and continue. 4c 5a Enter your church employee income from Form W-2. See instructions for definition of church employee income. 5a Multiply line 5a by 92.35% (0.9235). Ir less than $100, enter -- 5b 6 Add lines 4c and 5b 6 7 Maximum amount of combined wages and self-employment earnings subject to social security tax or the 6.2% portion of the 7.65% railroad retirement (tier 1) tax for 2020.. 8a Total social security wages and tips (total of boxes 3 and 7 on Form(s) W-2) and railroad retirement (tier 1) compensation. If $137,700 or more, skip lines 8b through 10, and go to line 11. Ba b Unreported tips subject to social security tax from Form 4137, line 10 Bb c Wages subject to social security tax from Form 8919, line 10. d Add lines Ba, Sb, and Bc.. Bd 9 Subtract line 8d from line 7. If zero or less, enter -- here and on line 10 and go to line 11 9 10 10 Multiply the smaller of line 6 or line 9 by 12.4% (0.124) 11 Multiply line 6 by 2.9% (0.029). 11 12 Self-employment tax. Add lines 10 and 11. Enter here and on Schedule 2 (Form 1040), line 4 12 13 Deduction for one-half of self-employment tax. Multiply line 12 by 50% (0.50). Enter here and on Schedule 1 (Form 1040), line 14 13 Part II Optional Methods To Figure Net Earnings (see instructions) Farm Optional Method. You may use this method only if (a) your gross farm income wasn't more than $8,460, or (b) your net farm profits(2) were less than $6,107. 14 Maximum income for optional methods .. 14 15 Enter the smaller of: two-thirds (2/3) of gross farm income) (not less than zero) or $5,640. Also, include this amount on line 4b above ..... 15 16 Nonfarm Optional Method. You may use this method only if (a) your net nonfarm profits() were less than $6,107 and also less than 72.189% of your gross nonfarm income, and (b) you had net earnings from self- employment of at least $400 in 2 of the prior 3 years. Caution: You may use this method no more than five times. 16 Subtract line 15 from line 14 17 Enter the smaller of: two-thirds (2/3) of gross nonfarm income() (not less than zero) or the amount on line 16. Also, include this amount on line 4b above... 17 (1) From Sch. F, line 9; and Sch. K-1 (Form 1065), box 14, code B. (3) From Sch. C, line 31; and Sch. K-1 (Form 1065), box 14, code A. (2) From Sch. F, line 34; and Sch. K-1 (Form 1065), box 14, code A (4) From Sch. C, line 7; and Sch. K-1 (Form 1065), box 14, code C. -minus the amount you would have entered on line 1b had you not used the optional method .. BAA For Paperwork Reduction Act Notice, see your tax return instructions. Schedule SE (Form 1040) 2020 Page 2 Schedule SE (Form 1040) 2020 Ashley Panda 123-45-6777 Attachment Sequence No. 17 Part III Maximum Deferral of Self-Employment Tax Payments If line 4c is zero, skip lines 18 through 20, and enter -- on line 21. 18 Enter the portion of line 3 that can be attributed to March 27, 2020, through December 31, 2020 .. 18 19 20 21 19 If line 18 is more than zero, multiply line 18 by 92.35% (0.9235); otherwise, enter the amount from line 18.. 20 Enter the portion of lines 15 and 17 that can be attributed to March 27, 2020, through December 31, 2020... 21 Combine lines 19 and 20 Ir line 5b is zero, skip line 22 and enter -- on line 23. 22 Enter the portion of line 5a that can be attributed to March 27, 2020, through December 31, 2020. Multiply line 22 by 92.35% (0.9235). 22 23 23 24 Add lines 21 and 23. 24 25 Enter the smaller of line 9 or line 24. 25 26 Multiply line 25 by 6.2% (0.062). Enter here and see the instructions for line 12e of Schedule 3 (Form 1040). 26 Qualified Business Income Deduction OMB No. 1545-0123 Form 8995 Simplified Computation 2020 Department of the Treasury Attach to your tax return. Attachment Internal Revenue Service Go to www.irs.gov/Form8995 for instructions and the latest information. Sequence No. 55 Name(s) shown on return Your taxpayer identification number Ashley Panda 123-45-6777 Note. You can claim the qualified business income deduction only if you have qualified business income from a qualified trade or business, real estate investment trust dividends, publicly traded partnership income, or a domestic production activities deduction passed through from an agricultural or horticultural cooperative. See instructions. Use this form if your taxable income, before your qualified business income deduction, is at or below $ 163,300 ($326,600 if married filing jointly), and you aren't a patron of an agricultural or horticultural cooperative. (b) Taxpayer (c) Qualified business (a) Trade, business, or aggregation name identification number income or (loss) i Panda Services, LLC 123-45-6777 iv V 2 2 Total qualified business income or (loss). Combine lines li through 1v, column (c). 3 Qualified business net (loss) carryforward from the prior year... 4 Total qualified business income. Combine lines 2 and 3. If zero or less, enter-O- 3 4 5 Qualified business income component. Multiply line 4 by 20% (0.20).. 6 Qualified REIT dividends and publicly traded partnership (PTP) income or (loss) (see instructions). 6 7 Qualified REIT dividends and qualified PTP (loss) carryforward from the prior year. 7 8 Total qualified REIT dividends and PTP income. Combine lines 6 and 7. If zero or less, enter -- 8 9 REIT and PTP component. Multiply line 8 by 20% (0.20) - 9 10 Qualified business income deduction before the income limitation. Add lines 5 and 9 10 11 Taxable income before qualified business income deduction. 11 12 Net capital gain (see instructions). 12 13 Subtract line 12 from line 11. If zero or less, enter -O- 13 14 14 Income limitation. Multiply line 13 by 20% (0.20).. 15 Qualified business income deduction. Enter the lesser of line 10 or line 14. Also enter this amount on the applicable line of your return.. 15 16 Total qualified business (loss) carryforward. Combine lines 2 and 3. If greater than zero, enter -- 16 17 17 Total qualified REIT dividends and PTP (loss) carryforward. Combine lines 6 and 7. Ir greater than zero, enter -- BAA For Privacy Act and Paperwork Reduction Act Notice, see instructions. Form 8995 (2020) The worksheet will assist you in determining the tax liability. If an amount is zero, enter "O". Use the 2020 Tax Rate Schedule provided. Do not use the Tax Tables. Qualified Dividends and Capital Gain Tax Worksheet-Line 16 Keep for Your Records Before you begin: See the earlier instructions for line 16 to see if you can use this worksheet to figure your tax. Before completing this worksheet, complete Form 1040 through line 15. If you do not have to file Schedule D and you received capital gain distributions, be sure you checked the bax on Form 1040 or 1040-SR, line 7. 1. Enter the amount from Form 1040 or 1040-SR, line 15. However, if you are filing Form 2555 or 2555-EZ (relating to foreign earned income), enter the amount from line 3 of the Foreign Earned Income Tax Worksheet (Taxable income) 1. 2. Enter the amount from Form 1040, line 3a* 2. 3. Are you filing Schedule D? Yes Enter the smaller of line 15 or 16 of Schedule D. Ir either line 15 or line 16 is blank or a loss, enter-O- No Enter the amount from Form 1040 or 1040-SR, line 7. 3 } 4. Add lines 2 and 3 4. 010 5. If filing Form 4952 (used to figure investment interest expense deduction), enter any amount from line 4g of that form. Otherwise, enter -O-... 6. Subtract line 5 from line 4. If zero or less, enter -- 5. 6. 7. Subtract line 5 from line 1. If zero or less, enter -O- 7 8. Enter: $40,000 if single or married filing separately, $80,000 if married filing jointly or qualifying widow(er), B. $53,600 if head of household. 9. Enter the smaller of line 1 or line 8 9. 10. 10. Enter the smaller of line 7 or line 9 11. Subtract line 10 from line 9. This amount is taxed at 0%. 11. 12. Enter the smaller of line 1 or line 6 12. 13. Enter the amount from line 11. 13. 14. Subtract line 13 from line 12 14. 15. Enter: $441,450 if single, $248,300 if married filing separately, 15. $496,600 ir married filing jointly or qualifying widow(er), $469,050 if head of household. 16. Enter the smaller of line 1 or line 15 17. Add lines 7 and 11 .. 16. 17. hddd 18. Subtract line 17 from line 16. If zero or less, enter -O- 18. 19. Enter the smaller of line 14 or line 18.. 19. 20. Multiply line 19 by 15% (0.15). 20. 21. Add lines 11 and 19.. 21. 22. Subtract line 21 from line 12 22. 23. Multiply line 22 by 20% (0.20). 23. 24. Figure the tax on the amount on line 7. If the amount on line 7 is less than $100,000, use the Tax Table to figure the tax. If the amount on line 7 is $100,000 or more, use the Tax Computation Worksheet. 25. Add lines 20, 23, and 24. 24. 25. 26. 26. Figure the tax on the amount on line 1. If the amount on line 1 is less than $100,000, use the Tax Table to figure the tax. If the amount on line 1 is $100,000 or more, use the Tax Computation Worksheet.. 27. Tax on all taxable income. Enter the smaller of line 25 or 26. Also include this amount on the entry space on Form 1040 or 1040-SR, line 16. If you are filing Form 2555, don't enter this amount on the entry space on Form 1040 or 1040-SR, line 16. Instead, enter it on line 4 of the Foreign Earned Income Tax Worksheet. 27. * If you are filing Form 2555 or 2555-EZ, see the footnote in the Foreign Earned Income Tax Worksheet before completing this line. 2020 Tax Rate Schedules Use the 2020 Tax Rate Schedules to compute the tax. (Note: Because the tax rate schedules are used instead of the tax tables, the amount of tax computed may vary slightly from the amount listed in the tables.) 2020 Tax Rate Schedules Single-Schedule Head of household-Schedule z If taxable income is: Over- But not over- of the amount over- If taxable income is: Over- But not over- of the amount over The tax is: The tax is: SO $ 9,875 ...... 10% $0 $0 ...... 10% $0 40,125 $987.50 + 12% 9,875 $ 1,410.00 + 12% $ 14,100 53,700 85,500 9,875 40,125 14,100 14,100 53,700 4,617.50 + 22% 40,125 6,162.00 + 22% 53,700 85,525 85,525 163,300 207,350 14,605.50 + 24% 85,525 85,500 85,500 163,300 163,300 163,300 207,350 518,400 163,300 13,158.00 + 24% 31,830.00 + 32% 45,926.00 + 35% 33,271.50 + 32% 47,367.50 + 35% 156,235.00 + 37% 518,400 163,300 207,350 518,400 207,350 518,400 207,350 207,350 518,400 154,793.50 + 37% 518,400 Married filing jointly or Qualifying widow(er)Schedule Y-1 Married filing separately-Schedule Y-2 of the If taxable income is: Over- of the amount over- But not over- If taxable income is: Over- But not amount over The tax is: Over- The tax is: $0 ...... 10% $0 $0 $ 9,875 ...... 10% $0 $ 19,750 80,250 19,750 19,750 9,875 40,125 $ 987.50 + 12% 9,875 40,125 80,250 171,050 80,250 85,525 4,617.50 + 22% 40,125 85,525 171,050 $ 1,975.00 + 12% 9,235.00 + 22% 29,211.00 + 24% 66,543.00 + 32% 94,735.00 + 35% 163,300 326,600 414,700 622,050 85,525 163,300 326,600 163,300 207,350 171,050 326,600 414,700 622,050 14,605.50 + 24% 33,271.50 + 32% 47,367.50 + 35% 83,653.75 + 37% 311,025 207,350 414,700 622,050 207,350 311,025 167,307.50 + 37% 311,025