Carlos(Age 42) and Maria Gomez (Age 38) live in Lubbock, Texas.They file married/joint.The Gomezes have two children: Luis (age 14) and Amanda (age 12).Both children qualify as federal income tax dependents of Carlos and Maria.The Gomezes provided the following information:

Luis's social security number is 589-24-8432

Amanda's social security number is 599-74-8733

Carlos' social security number is 565-33-2333

Maria's social security number is 565-11-1111

The Gomez's current mailing address is 543 West La Patera, Lubbock, Texas 79401

Carlos is a civil engineer.For the first two months of the year, he was employed by West Texas Engineering (WTE).However, he resigned his position with WTE to start his own engineering firm called Gomez Professional Engineers (GPE).GPE is conducted as a sole proprietorship with Carlos being the sole owner.GPE started business on February 1, 2018 and is located at 1515 West Industrial Road Lubbock, Texas 79401 (EIN 20-1616167). Maria is self-employed as a part-time bookkeeper and works from home.

Carlos provided the following W-2 from WTE.

Carlos reported the following information for GPE's business activities (GPE uses the cash method of accounting):

Revenues:

Credit card receipts$352,000

Cash receipts 648,000

Total revenue$1,000,000

Expenses:

Advertising$5,450

Insurance-professional 15,750

Office building rent 62,000

Equipment leases6,050

Travel 14,200

Meals and entertainment2,980

Wages498,725

Social Security and Medicare taxes for employees44,875

Employee health insurance 42,000

Employee benefit programs 14,500

Utilities 37,425

Office supplies 18,900

Legal and professional fees 15,550

Start-up expenses (incurred in January 2018)15,000

Repairs and maintenance 10,000

Total Expenses

GPE purchased and placed in service the following fixed assets in 2018:

Item

Date Purchased

Amount

Laptop computers

March 1

$20,580

Printers

June 1

$6,580

Office furniture

October 18

$19,800

GPE wants to claim Section 179 depreciation on the laptop computer and printer.He wants to claim MACRS on the office furniture.He does not claim bonus depreciation on any of the assets.

Carlos worked part-time on GPE business activities until he finished his employment with WTE early in the year.Carlos worked full-time on GPE business activities for the rest of the year.

GPE filed Forms 1099 for payments made to contractors when required to do so. His business is not a specified service business for purposes of the Qualified Business Income Deduction.

Carlos and Maria paid $22,808 for health insurance for his family (for the time he was working at GPE).This amount is not included in the GPE expenses listed above.Neither Carlos nor Maria had access to employer-provided health insurance during the year while they were paying the premiums for this policy.The entire Gomez family was covered by minimum essential health insurance during each month in 2018.

In addition, Carlos has established a traditional IRA.He contributed $5500 to his IRA.Maria also contributed $5500 to her IRA.He is was not covered by a retirement plan at work.