Dan and Cheryl Meyer are married, file a joint return, and have no children. Dan, age 45, is an independent contractor working in pharmaceutical sales and Cheryl, age 42, is a nurse at a local hospital. Dans SSN is 400-20-1000 and Cheryls SSN is 200-40-8000 and they reside at 2033 Palmetto Drive, Atlanta, GA 30304. Dan is paid according to commissions from sales, and he has no income tax or payroll tax withholdings. Dan operates his business from his home office. During 2018, Dan earned total commissions in his business of $150,000. Cheryl earned a salary during 2018 of $45,400, with the following withholdings: $6,000 federal taxes, $1,800 state taxes, $2,815 OASDI, and $658 Medicare taxes.

During 2018, Dan and Cheryl had interest income from corporate bonds and bank accounts of $1,450 and qualified dividends from stocks of $5,950. Dan also actively trades stocks and had the following results for 2018:

• LTCG $4,900
• LTCL (3,200)
• STCL (7,800)

Assume the following regrading stock sales:

• STCL was from Intel stock originally purchased on 1/4/19 for $12,000 and sold on 3/1/19 for $4,200.
• LTCG was from the sale of Google, Inc. stock originally purchased on 7/19/14 for $10,100 and sold on 10/1/19 for $15,000.
• LTCL was from the sale of Yahoo, Inc. stock originally purchased on 1/30/16 for $48,200 and sold on 11/2/19 for $45,000.
• There are no capital loss carryovers from previous years.

Dan does a considerable amount of travel in connection with his business and uses his own car. During 2018, Dan drove his car a total of 38,000 miles, of which 32,000 were business related. He also had business-related parking fees and tolls during the year of $280. Dan uses the mileage method for deducting auto expenses.

Dan also had the following travel expenses while away from home during the year:

Hotel	$4,200
Meals	820
Entertainment of customers	1,080
Tips	100
Laundry and cleaning	150
Total	6,350

For Dans business, the following items apply:

• Dan uses the simplified method to deduct expenses for his office-in-home. His office measures 15 feet by 12 feet in size. The Taxpayers' house is 3,000 square feet.
• Dan uses the cash method.
• One-third of the tax preparation fees are allocable to Dans business.
• The vehicle was placed in service on 12/31/17.
• Answer "yes" to items 45-47b on page 2.

Cheryl incurred several expenses in connection with her nursing job. She paid $450 in professional dues, $200 in professional journals, and $350 for uniforms.

Dan and Cheryl had the following other expenditures during the year:

Health insurance premiums (after-tax)	$4,400
Doctor bills	470
Real estate taxes on home	6,800
Personal property taxes	1,400
Mortgage interestall deductible	7,400
Charitable contributionscash	11,000
Charitable contributionsGE stock owned for 5 years*	FMV $8,000 & Adjusted basis $2,000
Tax preparation fees	750

*Assume the charitable donation of GE stock was to the United Way. It was donated on 9/5/19 and was originally purchased on 4/17/12.

During 2018, Dan and Cheryl paid federal and state estimated tax payments on a quarterly basis. Federal payments for the year amounted to $26,000. State estimated payments for the year amounted to $2,500. Compute Dan and Cheryls income tax liability for 2018. Disregard the alternative minimum tax.

Use the 2019 tax forms (locate tax forms on www.irs.gov).

• Form 1040
• Schedule 1, Form 1040
• Schedule 2, Form 1040
• Schedule 3, Form 1040
• Schedule A, Form 1040
• Schedule B, Form 1040
• Schedule C, Form 1040
• Schedule D, Form 1040
• Form 8949, Form 1040
• Schedule SE, Form 1040
• Form 8283, Form 1040