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Dave Stevens, age 3 4 , is a self - employed physical therapist. His wife Sarah, age 3 1 , teaches English as a Second

Dave Stevens, age 34, is a self-employed physical therapist. His wife Sarah, age 31, teaches English as a Second Language at a local language school. Dave's Social Security number is 111-11-1111. Sarah's Social Security number is 222-22-2222. Sarah and Dave have three childrenAndrew, age 8; Isaac, age 6; and Mira, age 3. The children's Social Security num- bers are, respectively, 333-33-3333,444-44-4444, and 555-55-5555. They live at 12637 Pheasant Run, West Bend, Oregon 74658. They paid $8,900 in qualified residence interest and $2,400 in property taxes on their home. They had cash charitable contributions of $14,000. They also paid $180 to a CPA for preparing their federal and state income tax returns for the prior year, $100 of which was for the preparation of Dave's Schedule C. Sarah and Dave earned interest on CDs of $3,200. Sarah's salary for the year is $32,000, trom which $9,600 in federal income tax and $1,400 in state income tax were withheld. Dave's office is located at Suite 402,942 Woodview Drive, Portland, Oregon 74624, and his employer ID number is 11-1111111. Dave has been practicing for four years, and he uses the cash method of accounting. During 2021, Dave recorded the following items of income: Revenue from patient visits = $300,000Interest earned on the office = $225checking balance The following expenses were recorded for the office: Property taxes = $4,500Mortgage interest = $12,000Depreciation = $4,500Malpractice insurance = $37,500Utilities = $3,750Office staff salaries = $51,000Rent payments on equipment = $15,000Office magazine subscriptions = $150Office supplies = $24,000Medical journals = $330Dave pays $50 annually for use of a safety deposit box to store certain confidential docu- ments related to his business. In addition to his medical practice, Dave spends 15 hours every week managing his real estate investments. To make sure he is aware of all current investment strategies and best practices, he subscribes to the following journals: Wall Street Journal = $150 U.S. News & World Report = $55 Money Magazine = $45 Dave also prepaid $33,000 in estimated federal income taxes. Prepare Dave and Sarah's 2021 tax return (Form 1040, Schedules 1,2,3, A, B, C, SE, and Form 8995). Disregard any tax credits for which they may be eligible and assume the couple has no transactions involving virtual currency. Use the most recent 2023 forms on the irs website.

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