Chris and Stefani Watanabe live with their two boys at 1400 Victoria Lane, Riverside, CA 92501. Chris is an accountant who has his own accounting practice.Stefani is an elementary school teacher. Their sons, Justin and Jordan, are ages 13 and 10, respectively. The following is additional information regarding the Watanabes.

Social security numbers for the Watanabe family:

Chris 412-34-5670 Stefani 412-34-5671 Justin 412-34-5672 Jordan 412-34-5673

They paid $4,500 to Friendly Hills Child Care center for after-school care for both Justin and Jordan, allocated equally. The address is 2 River Dr, Riverside, CA 92501 and their ID number is 22-1234567.

Stefani's W-2 from the Riverside school district showed the following:

Wages=$56,925.04Federal W/H=$7,085.90Social Security wages=$56,925.04Social Security W/H=$3,529.35Medicare Wages=$56,925.04Medicare W/H=$825.41California W/H=$2,105.75

Chris's accounting business is located in downtown Riverside and his business code is 541211. His business had the following income and expense information (Cash basis) for the year:

Gross revenues$165,000Expenses:Advertising$2,100Insurance1,200Legal fees10,500Office supplies800Rent24,000Travel6,945Meals2,400Utilities2,800Wages34,000Dues650

Additionally, Chris and Stefani paid the following expenses during the year:

Medical and dental expenses$4,500Property tax (home on Victoria Lane)3,750State income taxes with the 2018 return3,900Donations to the church (cash)3,500Mortgage interest (home on Victoria Lane)16,900Stefani paid $950 in classroom expenses for her class

Chris and Stefani also earned $975 of interest income from California Bank during the year.

Lastly, Chris and Stefani own a three-bedroom cabin in Big Bear Lake (they bought it in January of 2007 for $300,000). The address is 3105 Stonehedge Road, Big Bear Lake, CA 92315. They did not use theproperty for personal use at any time during the year. The revenue and expenses for the Big Bear Lake rental property are as follows:

Rental income$18,000Expenses:Insurance$1,200Property taxes2,500Auto (standard mileage)267Management fees1,600Repairs and maintenance1,100Mortgage interest9,000DepreciationCalculateUtilities450

The Watanabes also made $13,000 and $9,000 in federal and California estimated income tax payments, respectively, on 12/31/19.

Required:

Prepare the Watanabes' federal tax return for 2019. Use Form 1040, Schedule A, Schedule C, Schedule E, Schedule SE, and any additional schedules or forms they may need. They do not want to contribute to the presidential election campaign, and they do not want anyone to be athird-party designee. For any missing information, make reasonable assumptions.(List the names of the taxpayers and any income they receive in the order in which theyappear in the problem. Input all the values as positive numbers unless otherwise stated in the forms. Instructions can be found on certain cells within the forms. Round all intermediate calculations and your final answers to the nearest whole dollar amount. Do not skip rows while entering in Deductions section of Form 1040 PG1 and Other Expenses section in Schedule C PG2. Enter zero where applicable.)

Use the appropriate EIC Tables (6A-6or6A-7) andTax TablesorTax Rate Schedules.