Comprehensive Problem 8-1

Trish Himple owns a retail family clothing store. Her store is located at 4321 Heather Drive, Henderson, NV 89002. Her employer identification number is 95-1234321 and her Social Security number is 123-45-6789. Trish keeps her books on the cash basis. The income and expenses for the year are:

Gross sales $345,000

Returns and allowances 14,000

Expenses:

Beginning inventory (at cost) $ 87,000

Add: purchases 100,000

Cost of goods available for sale $187,000

Less: ending inventory (at cost)72,000

Cost of goods sold $115,000

Rent 24,000

Insurance 3,000

Legal and accounting fees 5,000

Payroll 60,000

Payroll taxes 5,000

Utilities 2,000

Office supplies 800

Advertising 6,000

The truck is not considered a passenger automobile for purposes of the luxury automobile limitations.

Trish also has a qualified home office of 250 sq. ft. Her home is 2,000 sq. ft. Her 2018 purchase price and basis in the home, not including land, is $100,000(the home's market value is $150,000). She incurred the following costs in 2023related to the entire home:

Utilities $3,000

Cleaning 1,000

Insurance 1,100

Property taxes 2,000

Required:

For tax purposes, Trish elected out of bonus depreciation in all years except 2023. She did not elect immediate expensing in any year. The tax lives of the assets are the same as the book lives shown in the fixed asset schedule above. Complete Trish's Schedule C, Form 8829, Form 4562, and Schedule SE.

Make realistic assumptions about any missing data.

Enter all amounts as positive numbers.

If an amount box does not require an entry or the answer is zero, enter "0".

If required round any dollar amount to the nearest dollar.

W2

Trish also earned wages as express delivery manager in 2023. Her Form W-2 is below.

a Employee's social security number

123-45-6789 OMB No.1545-0008 Safe, accurate,

FAST! Use IRS e ~ file Visit the IRS website at

www.irs.gov/efile

b Employer identification number (EIN)

31-34534571 Wages, tips, other compensation

110,000.002 Federal income tax withheld

24,200.00

c Employer's name, address, and ZIP code

Lightning and Juno Express

100 Didactylus Drive

Las Vegas, NV 890323 Social security wages

110,000.004 Social security tax withheld

6,820.00

5 Medicare wages and tips

110,000.006 Medicare tax withheld

1,595.00

7 Social security tips

8 Allocated tips

d Control number

910 Dependent care benefits

e Employee's first name and initial

Trish Himple

350 W. Lake Mead Blvd.

North Las Vegas, NV 89032 Last name

Suff. 11 Nonqualified plans 12a See instructions for box 12

C

o

d

e

W

1,000.00

13

Statutory employee Retirement plan Third-party sick pay

12b

C

o

d

e

D

3,000.00

14 Other

12c

C

o

d

e

12d

C

o

d

e

f Employee's address and ZIP code

15 State

NV Employer's state ID number

16 State wages, tips, etc.

17 State income tax

18 Local wages, tips, etc. 19 Local income tax 20 Locality name

Form W-2 Wage and Tax

Statement 2023

Department of the TreasuryInternal Revenue Service

Copy B-To Be Filed With Employee's FEDERAL Tax Return.

This information is being furnished to the Internal Revenue Service.

Complete Trish's Schedule C, Form 8829, Form 4562, and Schedule SE