1. Calculate the 2019 net profit from Nates Schedule C.
2. Calculate the total 2019 self-employment tax for the Fischers
3. Calculate 2019 Gross Income and Adjusted Gross Income.
4. Calculate 2019 Itemized Deductions
5. Calculate the 2019 Qualified Business Income Deduction
6. Calculate the Fischers tax liability (including Self Employment taxes, Net Investment Income Taxes, and additional Medicare tax) and tax due/refund
7. Using IRS fill in forms, Prepare the following 2019 tax return forms for the Fischers. Please include Forms 1040 with schedules 1-4 along with schedules A, B, C, D, E (page 2), SE-Long, Forms 4952, 8959, 8960.

Nate and Ruth Fischer are married and file a joint return. They have three dependent children under the age of 15. None of their children work. Fischers 2019 financial information follows:

Nates Salary $130,000

Ruths Salary $420,000

Interest from Plains National Bank $12,500

Interest from U.S. Treasury Bonds $22,500

Interest from the state of California bonds $10,250

Dividends from Microsoft $23,000

Long term capital gain $31,000

Short term capital gain $15,000

Gambling winnings - lottery $20,000

Annuity payments received (Inv: $60,000, return $100,000) $40,000

Life Insurance Proceeds $450,000

Inheritance from Grandmother $750,000

Gift from family $420,000

Legitimate out of pocket medical expenses $72,000

Contributions to a Roth IRA $9,000

Mortgage interest ($1,500,000 principal) $82,000 (acquired in 2018)

Real estate taxes (on value of homes) $21,800

Charitable contributions $32,000

Investment interest expense $69,000

K-1 Ordinary Income Ruth (LLC) $82,000- Eligible for QBI

K-1 Ordinary Loss - Nate (Partnership) ($37,000)- Eligible for QBI

K-1 Ruth S Corporation (Ordinary Income) $36,000 - Eligible for QBI

Federal Income Taxes withheld/paid during the year 2019 $375,000

Sole Proprietorship for Nate- (Eligible for QBI)

Revenue $750,000

Salaries paid to his staff $152,000

Self Employed Medical Insurance $17,000 (be careful where you deduct these)

SEP Payments $46,000 (be careful where you deduct these)

Office expenses $19,500

Travel $19,000

Legal and professional fees $7,750

Rent expense $32,400

Business meals $16,400

Country club memberships $8,000

Payroll tax expense $26,250

Business gifts ($100 per gift to 8 customers) $800

Penalties and fines payable to the State of Texas $6,500

Withdrawals by the business owner of cash $65,000 (these are owners draws)

Appendix C 2019 Income Tax Rates To va INDIVIDUAL TAX RATES Married Filing Jointly and Surviving Spouse If taxable income is: The tax is: Not over $19,400 10% of taxable income Over $19.400 but not over $78,950 $1.940.00 + 12% of excess over $19.400 Over $78,950 but not over $168,400 $9,086.00 + 22% of excess over $78,950 Over $168,400 but not over $321,450 $28,765.00 +24% of excess over $168.400 Over $321,450 but not over $408.200 $65.497.00 + 32% of excess over $321.450 Over $408.200 but not over $612,350 $93.257.00 + 35% of excess over $408.200 Over $612,350 $164.709.50 +37% of excess over $612350 If taxable income is: Not over $9.700 Over $9.700 but not over $39,475 Over $39,475 but not over $84.200 Over $84,200 but not over $160,725 Over $160,725 but not over $204,100 Over $204,100 but not over $306,175 Over $306,175 Married Filing Separately The tax is: 10% of taxable income $970.00 + 12% of excess over $9,700 $4,543.00 + 22% of excess over $39.475 $14,382.50 + 24% of excess over $84.200 $32.748.50 + 32% of excess over $160,725 $46.628.50 + 35% of excess over $204,100 $82.354.75 + 37% of excess over $306,175 Heads of Household If taxable income is: The tax is: Not over $13,850 Over $13,850 but not over $52,850 Over $52,850 but not over $84.200 Over $84,200 but not over $160,700 Over $160,700 but not over $204,100 Over $204,100 but not over $510,300 Over $510,300 10% of taxable income $1,385.00 + 12% of excess over $13,850 $6,065.00 + 22% of excess over $52,850 $12.962.00 +24% of excess over $84.200 $31.322.00 + 32% of excess over $160,700 $45,210.00 + 35% of excess over $204,100 $152,380.00 + 37% of excess over $510,300 Appendix C 2019 Income Tax Rates To va INDIVIDUAL TAX RATES Married Filing Jointly and Surviving Spouse If taxable income is: The tax is: Not over $19,400 10% of taxable income Over $19.400 but not over $78,950 $1.940.00 + 12% of excess over $19.400 Over $78,950 but not over $168,400 $9,086.00 + 22% of excess over $78,950 Over $168,400 but not over $321,450 $28,765.00 +24% of excess over $168.400 Over $321,450 but not over $408.200 $65.497.00 + 32% of excess over $321.450 Over $408.200 but not over $612,350 $93.257.00 + 35% of excess over $408.200 Over $612,350 $164.709.50 +37% of excess over $612350 If taxable income is: Not over $9.700 Over $9.700 but not over $39,475 Over $39,475 but not over $84.200 Over $84,200 but not over $160,725 Over $160,725 but not over $204,100 Over $204,100 but not over $306,175 Over $306,175 Married Filing Separately The tax is: 10% of taxable income $970.00 + 12% of excess over $9,700 $4,543.00 + 22% of excess over $39.475 $14,382.50 + 24% of excess over $84.200 $32.748.50 + 32% of excess over $160,725 $46.628.50 + 35% of excess over $204,100 $82.354.75 + 37% of excess over $306,175 Heads of Household If taxable income is: The tax is: Not over $13,850 Over $13,850 but not over $52,850 Over $52,850 but not over $84.200 Over $84,200 but not over $160,700 Over $160,700 but not over $204,100 Over $204,100 but not over $510,300 Over $510,300 10% of taxable income $1,385.00 + 12% of excess over $13,850 $6,065.00 + 22% of excess over $52,850 $12.962.00 +24% of excess over $84.200 $31.322.00 + 32% of excess over $160,700 $45,210.00 + 35% of excess over $204,100 $152,380.00 + 37% of excess over $510,300