COMPREHENSIVE TAX PROJECT

Alice R. Decker lives at 2322 Skyview Road, San Francisco, CA 94102. She is a tax accountant with Mesa Manufacturing Company, 1203 Western Avenue, San Francisco, 94102 (employer identification number 11-1111111).

She also writes computer software programs for tax practitioners and has a part-time tax practice. Alice is single and has no dependents. Alices birthday is July 4, 1974, and her Social Security number is 123-45-6785.

She did not engage in any virtual currency transactions during the year, and she wants to contribute $3 to the Presidential Election Campaign Fund. Alice received the appropriate coronavirus recovery rebates (economic impact payments).

The following information is shown on Alice's Wage and Tax Statement (Form W2) for 2021.

Line	Description	Amount
1	Wages, tips, other compensation	$65,000.00
2	Federal income tax withheld	7,500.00
3	Social Security wages	65,000.00
4	Social Security tax withheld	4,030.00
5	Medicare wages and tips	65,000.00
6	Medicare tax withheld	942.50
15	State	California
16	State wages, tips, etc.	65,000.00
17	State income tax withheld	1,954.00

During the year, Alice received interest of $2,300 from California Federal Savings and Loan and $400 from California State Bank. Each financial institution reported the interest income on a Form 1099INT.

She received qualified dividends of $800 from Blue Corporation, $750 from Green Corporation, and $650 from Orange Corporation. Each corporation reported Alice's dividend payments on a Form 1099DIV.

Alice received a $1,100 income tax refund from the state of California on April 29, 2021. On her 2019 Federal income tax return, she used the standard deduction.

Fees earned from her part-time tax practice in 2021 totaled $4,800. She paid $600 to have the tax returns processed by a computerized tax return service.

On February 8, 2021, Alice bought 500 shares of Gray Corporation common stock for $17.60 a share. On September 12, 2021, she sold the stock for $14 a share.

Alice bought a used sports utility vehicle for $6,000 on June 5, 2021. She purchased the vehicle from her brother-in-law, who was unemployed and needed cash. On November 2, 2021, she sold the vehicle to a friend for $6,500.

On January 2, 2021, Alice acquired 200 shares of Blue Corporation common stock for $30 a share. She sold the stock on December 19, 2021, for $45 a share. Both stock transactions were reported to Alice on Form 1099B; basis was not reported to the IRS.

During the year, Alice records revenues of $16,000 from the sale of a software program she developed. She incurred the following expenditures in connection with her software development business.

Cost of personal computer	$7,000
Cost of printer	1,000
Furniture	3,000
Supplies	650
Fee paid to computer consultant	2,500

Alice elected to expense the maximum portion of the cost of the computer, printer, and furniture allowed under the provisions of 179. These items were placed in service on January 15, 2021, and used 100% in her business.

Although her employer suggested that Alice attend an in-person conference on current developments in corporate taxation, Alice was not reimbursed for the travel expenses of $1,420 she incurred in attending. The $1,420 included $200 for the cost of meals

During the year, Alice paid $300 for prescription medicines and $2,875 for medical bills. Medical insurance premiums were paid for her by her employer. Alice paid real property taxes of $1,766 on her home. Interest on her home mortgage (Valley National Bank) was $3,845, and credit card interest was $320. Alice contributed $2,080 in cash to various qualifying charities during the year. Professional dues and subscriptions totaled $350.

Alice paid estimated Federal income taxes of $1,000.

Required:

Compute Alice Deckers 2021 Federal income tax payable (or refund due), and complete her 2021 tax return using appropriate forms and schedules and the Qualified Dividends and Capital Gain Tax Worksheet.