: Cynthia Simon Directions Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets Answer the questions following the scenario Note: When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice. Interview Notes Cynthia is an electrician, age 29, and single. Cynthia has investment income and has a consolidated brokers statement. Cynthia began a cleaning service business in 2020. She was paid on Form 1099- NEC for 2021. She also received additional cash receipts of $400 not reported on the Form 1099-NEC. Cynthia uses the cash method of accounting. She uses business code 561720. Cynthia has receipts for the following expenses: - $350 for cleaning supplies - $225 for business cards - $450 for a mop, broom, and vacuum cleaner - $150 for work gloves - $125 for lunches - $175 for work clothes suitable for everyday use Cynthia has a detailed mileage log reporting for 2021: - Mileage from her home to her first clients home and mileage from her last clients home to her home 750 miles - In addition, on the days Cynthia worked for multiple clients, she kept track of the mileage from the first clients home to the second clients home in case that mileage was also deductible. She logged 450 miles (not included in the 750 miles). - The total mileage on her car for tax year 2021 was 11,200 miles. Of that, 10,000 were personal miles. She placed her only vehicle, a pick-up truck, in service on 3/15/2020. Cynthia will take the standard mileage rate. Cynthia took an early distribution from her IRA in April to pay off her educational expenses. Cynthia is paying off her student loan from 2018. Cynthia is working towards her Master of Business Administration (MBA) degree. She took a few college courses this year at an accredited college. 92 Advanced Scenarios Cynthia purchased insurance for herself through the marketplace and has a Form 1095-A. If Cynthia has a refund, she would like it deposited into her checking account. Cynthia received the third Economic Impact Payment (EIP3) in the amount of $1,400 in 2021.

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario. Note: When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice. 23.

What is the net short term capital gain reported on Cynthias Schedule D? a. $2,350 b. $1,400 c. $650 d. $300

24. Which of the following cannot be claimed as a business expense on Cynthias Schedule C? a. Cleaning supplies b. Business cards c. Lunches d. Work gloves

25. What is the amount Cynthia can take as a student loan interest deduction on her Form 1040, Schedule 1? $__________________

26. What is the total amount of advanced premium tax credit that Cynthia received in 2021? a. $3,960 b. $2,400 c. $1,800 d. $150

27. What is the amount of Cynthias lifetime learning credit? $_______________.

28. Cynthia will have to pay $200 additional tax because she received the early distribution from her IRA. a. True b. False

29. How can Cynthia prevent having a balance due next year? a. She can increase the withholding on her Form W-4 b. She can make estimated tax payments c. She can use the IRS withholding calculator to estimate her withholding for next year. d. All of the above