For your sixth client, your boss wants you to prepare Form 1040, Schedule C, and SE for Willow Wade.

Facts: Willow Wade is a successful, 30-year old attorney. She has a law office near the circuit court building on Smith Court and a home office. The home office is one of the bedrooms in her 4-bedroom home in Aiea, HI. She is on the cash method.

Taxpayer Willow Wade 41-123 Kaneu Drive Aiea, HI 96701

Social Security No: 255-10-0000

Gross Income $500,000

Secretary salary (?) 25,000

Rent expense 10,000

Supplies 500

Postage 200

Utilities (for Smith Ct. office) 1,000

Court fees (are these fees she is paying for clients who are filing cases? Would they be receivables on her books?) I dont know. I am sure there might be unreimbursed court fees that attorneys might have to pay? $1,000

Insurance (prepaid or expense?) Is that important since she is a cash based tax payer? Wouldnt that mean she paid $2000 in cash for the year...either the beginning or the end..so maybe prepaid, maybe not? 2,000

Total Square Footage of Willows home 3,000

Square footage of Willow's home office 300 square feet

Home expenses for the year (utility expenses (gas, electric, etc.), depreciation, and property taxes) $8,000 Mileage (4,000 to and from court, 2,000 to and from her home to work and back, 4,000 was personal driving? "just driving around") 10,000 miles

New car purchased last year cost $25,000 Prepare Form 1040, Schedule C, and SE for her self-employment taxes.