Denise Lopez, age 40, is single and has no dependents. She is employed as a legal secretary by Legal Services, Inc. She owns and operates Typing Services located near the campus of Florida Atlantic University at 1986 Campus Drive, Boca Raton, FL 33434. Denise is a material participant in the business, she is a cash basis taxpayer, and her Social Security number is 123-45-6781. Denise lives at 2020 Oakcrest Road, Boca Raton, FL 33431. Denise wants to designate $3 to the Presidential Election Campaign Fund. She has never owned or used any virtual currency. During 2022, Denise had the following income and expense items: a. $100,000 salary from Legal Services, Inc. b. $20,000 gross receipts from her typing services business. C. $700 interest income from Third National Bank. d. $1,000 Christmas bonus from Legal Services, Inc. e. $60,000 life insurance proceeds on the death of her sister. f. $5,000 check given to her by her wealthy aunt. g. $100 won in a bingo game. h. Expenses connected with the Typing Services: Office rent $7,000 Supplies 4,400 Utilities and telephone 4,680 Wages to part-time typists 5,000 Payroll taxes 500 Equipment rentals 3,000 i. j. $9,500 interest expense on a home mortgage (paid to Boca Raton Savings and Loan). $15,000 fair market value of silverware stolen from her home by a burglar on October 12, 2022. Denise had paid $14,000 for the Equipment rentals 3,000 i. $9,500 interest expense on a home mortgage (paid to Boca Raton Savings and Loan). j. $15,000 fair market value of silverware stolen from her home by a burglar on October 12, 2022. Denise had paid $14,000 for the silverware on July 1, 2012. She was reimbursed $10,000 by her insurance company. k. Denise had loaned $2,100 to a friend, Joan Jensen, on June 3, 2018. Joan declared bankruptcy on August 14, 2022, and was unable to repay the loan. Assume that the loan is a bona fide debt. Wa I. Legal Services, Inc., withheld Federal income tax of $14,000 and the appropriate amount of FICA tax from her wages. m. Alimony of $10,000 received from her former husband, Omar Guzman; divorce was finalized on December 2, 2013, and no changes have been made to the divorce decree since that time. n. Interest income of $800 on City of Boca Raton bonds. 0. Denise made estimated Federal tax payments of $2,000. p. Sales taxes from the sales tax table of $953. . r. Property taxes on her residence of $3,200. S. Charitable contribution of $2,500 to her alma mater, Citrus State College. On November 1, 2022, Denise was involved in an automobile accident. At the time of the accident, her automobile's FMV was $45,000. After the accident, the automobile's FMV was $38,000. Denise acquired the car on May 2, 2021, at a cost of $52,000. Denise's car was covered by insurance, but, because the policy had a $5,000 deduction clause, Denise decided not to file a claim for the damage. Required: Compute Denise Lopez's 2022 Federal income tax payable (or refund due). Use Form 1040, Schedule 1, Schedule A, Schedule C, Schedule D and Form 8995. 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. However, unless instructed otherwise, use the minus sign to indicate a loss. It may be necessary to complete the tax schedules before completing Form 1040. Use the tax rate schedules provided (do not use the tax tables). When computing the tax liability, do not round your immediate calculations. If required, round your final answers to the nearest dollar. Check My Work Instructions Form 1040 Schedule 1 Schedule A Sc 2022 Tax Rate Schedules Tax Letter and Advice Tax Letter and Advice Required: In 2023, Denise plans to continue her job with Legal Services, Inc. As a result, items a, d, and I will recur in 2023. Denise plans to continue her typing services business (refer to item b) and expects gross receipts of $34,000. She projects that all business expenses (refer to item h) will increase by 10%, except for office rent, which, under the terms of her lease, will remain the same as in 2022. Items e, f, g, j, k, and s will not recur in 2023. Items c, i, m, n, p, q, and r will be approximately the same as in 2022. Remain the same in 2023: a. $100,000 salary from Legal Services, Inc. d. $1,000 Christmas bonus from Legal Services, Inc. 1. Legal Services, Inc., withheld Federal income tax of $15,000 and the appropriate amount of FICA tax from her wages. h. Expenses connected with Typing Services that will remain the same: Office Rent of $7,000. C. $700 interest income from Third National Bank. i. $9,500 interest expense on a home mortgage. m. Alimony of $10,000 received from her former husband. n. Interest income of $800 on City of Boca Raton bonds. P. Sales taxes from the sales tax table of $953. Property taxes on her residence of $3.200 d. $1,000 Christmas bonus from Legal Services, Inc. I. Legal Services, Inc., withheld Federal income tax of $15,000 and the appropriate amount of FICA tax from her wages. h. Expenses connected with Typing Services that will remain the same: Office Rent of $7,000. C. $700 interest income from Third National Bank. i. $9,500 interest expense on a home mortgage. m. Alimony of $10,000 received from her former husband. n. Interest income of $800 on City of Boca Raton bonds. P. Sales taxes from the sales tax table of $953. 9. Property taxes on her residence of $3,200. r. Charitable contributions of $2,500. Increases in 2023: b. h. $20,000 gross receipts from her typing services business will increase to $34,000. The following expenses connected with the typing service will increase by 10%. Supplies $4,400 Utilities and telephone 4,680 Wages to part-time typists 5,000 500 3,000 Payroll taxes Equipment rentals The following items will not recur: life insurance proceeds, gift, bingo winnings, bad debt, stolen silverware, and the auto accident. Equipment rentals 3,000 The following items will not recur: life insurance proceeds, gift, bingo winnings, bad debt, stolen silverware, and the auto accident. Assume her filing status does not change. Self-employment taxes are based on 92.35% of the net profits and taxed at 15.3%. Based on this information, Denise would like you to provide a tentative computation of her 2023 taxable income. SWFT, LLP 5191 Natorp Boulevard Mason, OH 45040 January 26, 2023 Ms. Denise Lopez 2020 Oakcrest Road Boca Raton, FL 33431 Dear Ms. Lopez: This letter is in response to your request concerning your estimated Federal taxable income for 2023. Based on the 2023 estimates you provided to us, we have determined that your estimated net business income would be This results in self-employment taxes of income, after considering your carryover loss from last year, would be income would be Your deduction for qualified business If I can be of further assistance to you in this matter, please do not hesitate to contact me. . Therefore, your estimated taxable