Could you help with the yellow highlights?

Instructions Note: This problem is for the 2018 tax year. Janice Morgan, age 24, is single and has no dependents. She is a freelance writer. In January 2018, Janice opened her own office located at 2751 Waldham Road, Pleasant Hill, NM 88135. She called her business Writers Anonymous. Janice is a cash basis taxpayer. She lives at 132 Stone Avenue, Pleasant Hill, NM 88135. Her Social Security number is 123-45-6782. Janice's parents continue to provide health insurance for her under their policy. Janice wants to contribute to the Presidential Election Campaign Fund. During 2018, Janice reported the following income and expense items connected with her business. Income from sale of articles $85,000 16,500 Rent Utilities 7,900 Supplies 1,800 Insurance 5,000 Travel (including meals of $1,200) 3,500 Janice purchased and placed in service the following fixed assets for her business. Janice wants to elect immediate expensing under $ 179, if possible. Furniture and fixtures (new) costing $21,000 on January 10 Computer equipment (new) costing $12,400 on July 28 Janice's itemized deductions include: State income tax $2,950 Home mortgage interest paid to First National Bank 6,000 Property taxes on home 2,500 Charitable contribution to her alma mater, State College 1,200 Janice did not keep a record of the sales tax she paid. The amount from the sales tax table is $437. Janice reports interest income of $4,000 on certificates of deposit at Second National Bank. She made estimated tax payments of $3,000 for 2018 Required: Compute Janice Morgan's 2018 Federal income tax payable (or refund due). Make realistic assumptions about any missing data. If an amount box does not require an entry or the answer is zero, enter "0". Enter all amounts as positive numbers. It may be necessary to complete the other tax forms and schedules before completing Form 1040. Use the tax schedules (not the tax tables) included with this problem to compute the tax. If required, round your final answers to the nearest dollar. Form 1040 Complete Janice Morgan's Form 1040 for 2018. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2018 OMB No. 1545-0074 IRS Use Only Filing sta Single Last name Your first name and initial Janice Morgan Your social security number 123-45-6782 Your standard deduction: None If joint return, spouse's first name and initial Last name Spouse's social security number Spouse standard deduction: Someone can claim your spouse as a dependent Spouse was born before January 2, 1954 Spouse is blind Spouse itemizes on a separate return or you were dual- status alien Yes Full-year health care coverage or exempt (see inst.) Apt. no. Home address (number and street). If you have a P.O. box, see instructions. 132 Stone Avenue Presidential Election Campaign (see inst.) You City, town or post office, state, and ZIP code. If you have a foreign address, attach Schedule 6. Pleasant Hill, NM 88135 If more than four dependents, see inst. and here o (2) Social security number (3) Relationship to you (4) if qualifies for (see inst.): Dependents (see instructions): (1) First name Last name Child tax credit Credit for other dependents Sign Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Here Your signature Date Your occupation Writer If the IRS sent you an Identity Protection PIN, enter it here Joint return? (see inst.) See instructions. Keep a copy for your records. Spouse's occupation Spouse's signature. If a joint Date return, both must sign. If the IRS sent you an Identity Protection PIN, enter it here (see inst.) Preparer's name | PTIN Firm's EIN Paid Check if: Preparer's signature Self-Prepared 3rd Party Designee Firm's name Phone no. Preparer Use Only Self-employed Firm's address BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2018) Form 1040 (2018) Janice Morgan 123-45-6782 Page 2 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 2a Tax-exempt interest 2a b Taxable interest 2b 4,000 3a Qualified dividends 3a b Ordinary dividends 3b 4a IRAs, pensions, and annuities 4a b Taxable amount 4b Attach Form(s) W- 2. Also attach Form(s) W-2G and 1099-R if tax was withheld. 5a Social security benefits 5a b Taxable amount 5b 6 Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 17,500 6 17,500 X 7 Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6... 7 20,263 Standard deduction or itemized deductions (from Schedule A) 00 11,700 X Qualified business income deduction (see instructions) 9 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter -O- 10 4,563 X 1 Form(s) 8814 Standard 8 Deduction for- Single or married 9 filing separately, 10 $ 12,000 Married filing 11 jointly or Qualifying widow(er), $24,000 Head of 12 household, $18,000 If you checked 13 any box under Standard 14 deduction, see 15 instructions. a Tax (see inst) (check if any from: 2 0 Form 4972 30 b Add any amount from Schedule 2 and check here . O 11 a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here 12 Subtract line 12 from line 11. If zero or less, enter -0- 13 Other taxes. Attach Schedule 4 14 Total tax. Add lines 13 and 14. 15 16 Federal income tax withheld from Forms W-2 and 1099, 16 17 Refundable credits: a EIC (see inst.) c Form 8863 b Sch 8812 Add any amount from Schedule 5 17 18 Add lines 16 and 17. These are your total payments. 18 Refund 19 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid. 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here 20a Direct deposit? b Routing number Type: Checking Savings See instructions. d Account number 21 Amount of line 19 you want applied to your 2019 estimated tax 21 22 Amount Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions 22 You Owe 23 Estimated tax penalty (see instructions) 23 Go to www.irs.gov/Form 1040 for instructions and the latest information. Form 1040 (2018) Feedback Schedule 1 Complete Janice Morgan's Schedule 1 below for 2018. SCHEDULE 1 OMB No. 1545-0074 Additional Income and Adjustments to Income 2018 (Form 1040) Department of the Treasury Internal Revenue Service Attach to Form 1040. Attachment Go to www.irs.gov/Form 1040 for instructions and the latest information. Sequence No. 01 Your social security number 123-45-6782 Name(s) shown on Form 1040 Janice Morgan Additional 1-9b Reserved .... 1-9b Income 10 Taxable refunds, credits, or offsets of state and local income taxes 10 11 Alimony received ... 11 12 Business income or (loss). Attach Schedule C or C-EZ. 12 13 Capital gain or loss). Attach Schedule D if required. If not required, check here 13 14 Other gains or losses). Attach Form 4797 14 Instructions Note: This problem is for the 2018 tax year. Janice Morgan, age 24, is single and has no dependents. She is a freelance writer. In January 2018, Janice opened her own office located at 2751 Waldham Road, Pleasant Hill, NM 88135. She called her business Writers Anonymous. Janice is a cash basis taxpayer. She lives at 132 Stone Avenue, Pleasant Hill, NM 88135. Her Social Security number is 123-45-6782. Janice's parents continue to provide health insurance for her under their policy. Janice wants to contribute to the Presidential Election Campaign Fund. During 2018, Janice reported the following income and expense items connected with her business. Income from sale of articles $85,000 16,500 Rent Utilities 7,900 Supplies 1,800 Insurance 5,000 Travel (including meals of $1,200) 3,500 Janice purchased and placed in service the following fixed assets for her business. Janice wants to elect immediate expensing under $ 179, if possible. Furniture and fixtures (new) costing $21,000 on January 10 Computer equipment (new) costing $12,400 on July 28 Janice's itemized deductions include: State income tax $2,950 Home mortgage interest paid to First National Bank 6,000 Property taxes on home 2,500 Charitable contribution to her alma mater, State College 1,200 Janice did not keep a record of the sales tax she paid. The amount from the sales tax table is $437. Janice reports interest income of $4,000 on certificates of deposit at Second National Bank. She made estimated tax payments of $3,000 for 2018 Required: Compute Janice Morgan's 2018 Federal income tax payable (or refund due). Make realistic assumptions about any missing data. If an amount box does not require an entry or the answer is zero, enter "0". Enter all amounts as positive numbers. It may be necessary to complete the other tax forms and schedules before completing Form 1040. Use the tax schedules (not the tax tables) included with this problem to compute the tax. If required, round your final answers to the nearest dollar. Form 1040 Complete Janice Morgan's Form 1040 for 2018. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2018 OMB No. 1545-0074 IRS Use Only Filing sta Single Last name Your first name and initial Janice Morgan Your social security number 123-45-6782 Your standard deduction: None If joint return, spouse's first name and initial Last name Spouse's social security number Spouse standard deduction: Someone can claim your spouse as a dependent Spouse was born before January 2, 1954 Spouse is blind Spouse itemizes on a separate return or you were dual- status alien Yes Full-year health care coverage or exempt (see inst.) Apt. no. Home address (number and street). If you have a P.O. box, see instructions. 132 Stone Avenue Presidential Election Campaign (see inst.) You City, town or post office, state, and ZIP code. If you have a foreign address, attach Schedule 6. Pleasant Hill, NM 88135 If more than four dependents, see inst. and here o (2) Social security number (3) Relationship to you (4) if qualifies for (see inst.): Dependents (see instructions): (1) First name Last name Child tax credit Credit for other dependents Sign Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Here Your signature Date Your occupation Writer If the IRS sent you an Identity Protection PIN, enter it here Joint return? (see inst.) See instructions. Keep a copy for your records. Spouse's occupation Spouse's signature. If a joint Date return, both must sign. If the IRS sent you an Identity Protection PIN, enter it here (see inst.) Preparer's name | PTIN Firm's EIN Paid Check if: Preparer's signature Self-Prepared 3rd Party Designee Firm's name Phone no. Preparer Use Only Self-employed Firm's address BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2018) Form 1040 (2018) Janice Morgan 123-45-6782 Page 2 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 2a Tax-exempt interest 2a b Taxable interest 2b 4,000 3a Qualified dividends 3a b Ordinary dividends 3b 4a IRAs, pensions, and annuities 4a b Taxable amount 4b Attach Form(s) W- 2. Also attach Form(s) W-2G and 1099-R if tax was withheld. 5a Social security benefits 5a b Taxable amount 5b 6 Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 17,500 6 17,500 X 7 Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6... 7 20,263 Standard deduction or itemized deductions (from Schedule A) 00 11,700 X Qualified business income deduction (see instructions) 9 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter -O- 10 4,563 X 1 Form(s) 8814 Standard 8 Deduction for- Single or married 9 filing separately, 10 $ 12,000 Married filing 11 jointly or Qualifying widow(er), $24,000 Head of 12 household, $18,000 If you checked 13 any box under Standard 14 deduction, see 15 instructions. a Tax (see inst) (check if any from: 2 0 Form 4972 30 b Add any amount from Schedule 2 and check here . O 11 a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here 12 Subtract line 12 from line 11. If zero or less, enter -0- 13 Other taxes. Attach Schedule 4 14 Total tax. Add lines 13 and 14. 15 16 Federal income tax withheld from Forms W-2 and 1099, 16 17 Refundable credits: a EIC (see inst.) c Form 8863 b Sch 8812 Add any amount from Schedule 5 17 18 Add lines 16 and 17. These are your total payments. 18 Refund 19 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid. 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here 20a Direct deposit? b Routing number Type: Checking Savings See instructions. d Account number 21 Amount of line 19 you want applied to your 2019 estimated tax 21 22 Amount Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions 22 You Owe 23 Estimated tax penalty (see instructions) 23 Go to www.irs.gov/Form 1040 for instructions and the latest information. Form 1040 (2018) Feedback Schedule 1 Complete Janice Morgan's Schedule 1 below for 2018. SCHEDULE 1 OMB No. 1545-0074 Additional Income and Adjustments to Income 2018 (Form 1040) Department of the Treasury Internal Revenue Service Attach to Form 1040. Attachment Go to www.irs.gov/Form 1040 for instructions and the latest information. Sequence No. 01 Your social security number 123-45-6782 Name(s) shown on Form 1040 Janice Morgan Additional 1-9b Reserved .... 1-9b Income 10 Taxable refunds, credits, or offsets of state and local income taxes 10 11 Alimony received ... 11 12 Business income or (loss). Attach Schedule C or C-EZ. 12 13 Capital gain or loss). Attach Schedule D if required. If not required, check here 13 14 Other gains or losses). Attach Form 4797 14