George Large (SSN 000-11-1111) and his wife Marge Large (SSN 000-22-2222) live at 2000 Lakeview Drive, Cleveland, OH 49001 and want you to prepare their 2017 income tax return based on the information below:

George Large worked as a salesman for Toyboat, Inc. He received a salary of $80,000 ($8,500 of federal income taxes withheld and $1,800 of state income taxes withheld) plus an expense reimbursement from Toyboat of $5,000 to cover his employee business expenses. George must make an adequate accounting to his employer and return any excess reimbursement, none of the reimbursement was related to the meals and enter-tainment. Additionally, Toyboat provides George with medical insurance worth $7,200 per year. George drove his car a total of 24,000 miles during the year, and he placed the car in service on June 1, 2015. His log indicates that 18,000 miles were for sales calls to customers at the customers offices and the remainder was personal mileage. George uses the standard mileage rate method. George is a college basketball fan. He purchased two season tickets for a total of $4,000. He takes a customer to every game, and they discuss some business before, during, and after the games. George also takes clients to business lunches. His log indicates that he spent $1,500 on these business meals. George also took a five-day trip to the Toyboat headquarters in Musty, Ohio. He was so well-prepared that he finished his business in three days, so he spent the other two days sightseeing. He had the following expenses during each of the five days of his trip:

Airfare$200

Lodging$85/day

Meals$50/day

Taxicabs$20/day

Marge Large is self-employed. She repairs rubber toy boats in the basement of their home. The total square footage of the Larges home, including the basement, is 3,000 square feet. The portion of the basement used in Marges business is 750 square feet. The busi-ness code is 811490. She had the following income and expenses:

Income from rubber toy boat repairs$15,000

The Larges use the simplified method to figure their deduction for Marges business use of their home.

The Larges incurred the following total other expenses:

Real estate taxes2,500

Mortgage interest4,500

Cash charitable contributions3,500

Prepare Form 1040, Schedules A, C, and SE for Form 1040, and Form 2106 for the 2017 year. (Assume no depreciation for this problem and that no estimated taxes were paid by the Larges.)

Cost of supplies5,000

Contract labor3,500

Telephone (business)500

For this assignment, submit the following tax forms as a single document*:

• Form 1040. Use the 2018 tax forms (locate tax forms on www.irs.gov)
• Schedule 1, Form 1040
• Schedule 4, Form 1040
• Schedule C, Form 1040
• Schedule SE, Form 1040

Check figures for the various forms:

Form 1040

AGI, Line 7 $84,182

Taxable income, Line 43 $60,182

Schedule A**

Total itemized deductions $12,300

Schedule C

Gross profit, Line 5 $15,000

Schedule SE

Total self-employment tax $636

Form 8829 (not required, use simplified method as directed in the problem)

Review the textbook, PowerPoints, or instructions to Schedule C to help calculate this figure.

*Remember to use current year tax forms. Points will be deducted for incorrect forms. In addition, be sure to submit the tax forms in order as required by the IRS. Notice a Sequence No. on the top right of each tax return form except for the Form 1040. Points will be deducted if your sequence ordering is incorrect.

**You will need to determine if the Schedule A is necessary based on the taxpayers itemized deductions as compared to the standard deduction. If you decide to use the itemized deductions from Schedule A, please include the form in the ordering as required by the IRS. If you determine itemized deductions do not apply, include Schedule A at the end of the tax return to prove your calculation was correct.