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Advanced Scenario 7: Austin Drake

25. What income must Austin report for his business on Schedule C-EZ or C?

	A. Income reported on Form 1099-MISC for classes he taught at the gym.

	B. Cash income in payments from individual clients.

	C. None. He must report all income from his personal training business on Line 21, Other income.

	D. Both his income reported on the Form 1099-MISC and the cash income from his clients.

	26. What is Austin's mileage expense deduction (at the standard mileage rate) for his business as a personal trainer?

	A. $1,525

	B. $2,220

	C. $3,531

	D. $4,227

	27. Which item cannot be deducted by Austin as a business expense?

	A. Business license

	B. Business liability insurance

	C. Advertising

	D. Nutritional supplements

	28. How does Austin's self-employment tax affect his tax return?

	A. Austin's self-employment tax is not reported anywhere on Form 1040.

	B. A portion of the self-employment tax is deducted as a business expense on Schedule C-EZ or C.

	C. The self-employment tax is shown on Form 1040, Other Taxes section, and the full amount is deducted on Schedule A, Taxes You Paid section.

	D. The self-employment tax is shown on Form 1040, Other Taxes section, and the deductible part is an adjustment on Form 1040, page 1.

29. What is the amount Austin can take as a student loan interest deduction? $________. (Do not enter dollar signs, commas, periods, or decimal points in your answer.)

	30. What are Austins total itemized deductions on Schedule A, line 29?

	A. $6,856

	B. $8,056

	C. $8,156

	D. $8,436

31. The amount of Austin's retirement savings contributions credit in the Tax and Credits section of Form 1040 is $120.

True

False

32. Austin is not able to pay the entire balance due by the due date of the return (without extensions). What are his options?

	A. He can submit a Form 9465, Installment Agreement Request.

	B. He can contact the IRS for a full pay 120-day agreement.

	C. He can pay using his credit card.

	D. Any of the above.