Chapter 4: Learning Activity Scenario - William Winston Prepare a tax return for William Winston (age 56, DOB: 7/1/1965, SSN: 226-00-4265). Mr. Winston is single and lives at 53 Mantis Road, Your City, Your State - Your Zip. He operates Lovely Lady Beauty Salon at 1096 Lovely Lady Lane, Your City, Your State - Your Zip. His EIN is 34-1345709. He is a calendar year taxpayer and operates a cash basis business. He opened his business on January 15, 2022. He materially participates in his business and did not make any payments that required him to file Form 1099. His gross sales for the year were $69,327. He paid $5,520 for health insurance through a third-party provider. He had the following business expenses: Advertising 375 Phone $ 894 Commissions 401 Business insurance 596 Supplies 685 License 350 Business personal property tax 245 800 Wages $14,530 Bank charges 789 Rentals of business property $ 7,100 FUTA/FICA taxes $2,100 He maintains a logbook for the business use of his car. Mr. Winston placed his vehicle into service on January 15, 2022. He had business mileage of 6,365 (incurred evenly throughout the year), 1,946 commuting miles, and 2,110 personal miles. He prefers to use the standard mileage rate. His travel expenses included no meals. They were provided by vendors. Because this is the first year of operation, the beginning inventory was $0. He had purchases of $16,740, none of which was for personal use. He had no other costs as part of his costs of goods sold. His ending inventory was $2,000. Mr. Winston's prior year tax liability was $0. He paid timely federal estimated tax payments of $750 per quarter. He did not itemize expenses on his return for tax year 2021. He made the following purchases, all of which were used 100% for business. Purchase Recovery Item Date Cost Period Convention Method Office furniture 1/15/22 $1,032 7-year Half-Year 20008 Fixtures 1/15/22 $ 167 7-year Half-Year 20008 Store sign 1/15/22 $ 250 7-year Half-Year 200DB Card reader 1/15/22 $ 458 5-year Half-Year 2000B Display case 1/15/22 $ 225 7-year Half-Year 200DB Telephone/Answering machine 1/15/22 $ 218 7-year Half-Year 20008 Mirrors * 1/15/22 $ 85 Manicure table * 1/15/22 $ 817 Computer 1/15/22 $ 503 5-year Half-Year 2000B Facial chair 1/15/22 $ 487 7-year Half-Year 20008 Adding machine/Calculator * 1/15/22 BO Manicure chair* 1/15/22 $ 163 Printer 1/15/22 $ 285 5-year Half-Year 2000B * Mr. Winston wishes to expense these items under section 179. Note: Do not use special depreciation for any of these assets