Instructions Form 1040 Schedule 1 Schedule 2 Schedule B Schedule C Form 1040 Complete the Coles' Form 1040. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2021 OMB No. 1545-0074 IF Filing Status Your first name and middle initial Last name Your social securit David R. Cole 123-45-678 If joint return, spouse's first name and middle initial Last name Spouse's social secu Ella M. Cole 123-45-678 Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election 1820 Elk Avenue Do you, or your spouse want $3 to go to this fu City, town, or post office. If you have a foreign address, also complete spaces below. State ZIP code an option below will not Denver, CO 80202 tax or refund Foreign country name Foreign province/state/county Foreign postal code At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency? Yes Standard Deduction Someone can claim: You: Age/Blindness No Spouse: Dependen (see instructions): (2) Social security (3) Relationship (4) / if qualifies for (see instruct If more than four (1) First name Last name number to you Child tax credit Credit for other d dependents, see 0 instructions and check here - 0 1 Wages, salaries, tips, etc. Attach Form(s) W-2 . . ..... . ...... 1 Attach 2a Tax-exempt interest . . 2a b Taxable interest . . . . . . . . . . 2b Sch. B if required. a Qualified dividends . .. 3a b Ordinary dividends . . . . . . . . 3b 4a IRA distributions . . 4a b Taxable amount . 4b 5a Pensions and annuities 5a b Taxable amount . . . . . . . . . . 5b Standard Deduction 6a Social security benefits 6a Taxable amount . . . . . . . . . . 6b for- 7 Capital gain or (loss). Attach Schedule D if required. If not required, check here . . . 7 . Single or Married filing separately, 3 Other income from Schedule 1, line 10 . . . . . . . . . . . . . . . . . ... 8 $12,550 . Married filing Add lines 1, 2b, 3b, 4b, 5b, 6b, 7, and 8. This is your total income . . . . . . . . . . . .. . jointly or Qualifying 10 Adjustments to income from Schedule 1, line 26 . . . . . . . . . . . . . 10 widow(er), $25,100 11 Subtract line 10 from line 9. This is your adjusted gross income . 11 Head of household, 12a Standard deduction or itemized deductions (from Schedule A) $18,800 12a . If you checked any b Charitable contributions if you take the standard deduction (see box under instructions) . . .. ... 12b Standard Deduction, see c Add lines 12a and 12b . . ... . . . . . 12c instructions. 13 Qualified business income deduction from Form 8995 or Form 8995-A . . . . . . . . . . ... 13 14 Add lines 12c and 13 .. . . . . . . . . . . . 14 15 Taxable income. Subtract line 14 from line 11. If zero or less, enter -0- . . . . .. . .. . . . 15Schedule 1 omplete Coles' Schedule 1 below for 2021. SCHEDULE 1 Additional Income and Adjustments to Income OMB No [Form 1040) 21 Department of the Treasury Attach to Form 1040, 1040-SR, or 1040-NR Attachm nternal Revenue Service Go to www.irs.gov/Form 1040 for instructions and the latest information Sequenc Name(s) shown on Form 1040, 1040-SR, or 1040-NR Your social securi David R. and Ella M. Cole 123-45-67 Part 1 Additional Income Taxable refunds, credits, or offsets of state and local income taxes . 2a Alimony received . 2 a b Date of original divorce or separation agreement (see instructions) - Business income or (loss). Attach Schedule C . . ... Other gains or (losses). Attach Form 4797 . .. . . . . . . 4 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E . 5 Farm income or (loss). Attach Schedule F . . . . . . . ... 6 Unemployment compensation . . 7 8 Other income: a Net operating loss . . 8a b Gambling income . . . . . . . . . . . . ........ 8b c Cancellation of debt . . . . . . . . . . . . . . . ... 8c d Foreign earned income exclusion from Form 2555 . 8d e Taxable Health Savings Account distribution . .. . . . . . .. ..... f Alaska Permanent Fund dividends . Jury duty pay . . . . . . . ... h Prizes and awards . ... i Activity not engaged in for profit income . . . Stock options . . . . k Income from the rental of personal property if you engaged in the rental for profit but were not in the business of renting such property . . .. . 8k Olympic and Paralympic medals and USOC prize money (see instructions) . 81 m Section 951(a) inclusion (see instructions) ...... 8m n Section 951A(a) inclusion (see instructions) . ... 8n Section 461(1) excess business loss adjustment . 80 Taxable distributions from an ABLE account (see instructions) ..... Other income. List type and amount - 8z Total other income. Add lines 8a through 8z . . .. . . . . . . . . . . ... 9 Combine lines 1 through 7 and 9. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 8 . .. .. .... 10 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form Schedule 1 (Form 1040) (2021) David R. and Ella M. Cole Part II Adjustments to Income 11 Educator expenses . 11 12 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 . 12 13 Health savings account deduction. Attach Form 8889 . 13 14 Moving expenses for members of the Armed Forces. Attach Form 3903 . . 14 15 Deductible part of self-employment tax. Attach Schedule SE 15 16 Self-employed SEP, SIMPLE, and qualified plans . . 16 17 Self-employed health insurance deduction . 17 18 Penalty on early withdrawal of savings . 18 19a Alimony paid . 192 b Recipient's SSN . c Date of original divorce or separation agreement (see instructions) . ...... .- 20 IRA deduction . . . 21 Student loan interest deduction . . . . . . . . . . .. 21 22 Reserved for future use . .. . . . . . . . ... 22 23 Archer MSA deduction . 23 A Other adjustments: a Jury duty pay (see instructions) . 24a b Deductible expenses related to income reported on line 8k from the rental of personal property engaged in for profit 24 Nontaxable amount of the value of Olympic and Paralympic medals and USOC prize money reported on line 81 . .. . . . . . . . . . 240 Reforestation amortization and expenses . . . . ... 24d Repayment of supplemental unemployment benefits under the Trade Act of 24e 1974 . Contributions to section 501 (c)(18)(D) pension plans . 24f Contributions by certain chaplains to section 403(b) plans . . . ... .... . ...... 24g Attorney fees and court costs for actions involving certain unlawful discrimination claims (see instructions) . . . . . . . ... 24h Attorney fees and court costs you paid in connection with an award from the IRS for information you provided that helped the IRS detect tax law violations 241 Housing deduction from Form 2555 . .. 24j Excess deductions of section 67(e) expenses from Schedule K-1 (Form 1041) 24 k z Other adjustments. List type and amount - 24z 5 Total other adjustments. Add lines 24a through 24z ... . 25 26 Add lines 11 through 23 and 25. These are your adjustments to income. Enter here and on Form 104 or 1040-SR, line 10, or Form 1040-NR, line 10a . . . . . . . . . 26 Schedule 1 (ForSchedule 2 Complete the Cole's Schedule 2. SCHEDULE 2 Additional Taxes OMB N (Form 1040) Department of the Treasury Attach to Form 1040, 1040-SR, or 1040-NR. Attachr Internal Revenue Service Go to www.irs.gov/Form 1040 for instructions and the latest information. Sequer Name(s) shown on Form 1040, 1040-SR, or 1040-NR Your social sect David R. and Ella M. Cole 23-45-6 Part 1 Tax Alternative minimum tax. Attach Form 6251 . . . . . . . . . . . . . . . .... ...... . . . . . . . .. . . . . . . ... 2 Excess advance premium tax credit repayment. Attach Form 8962 . . .. . 2 3 Add lines 1 and 2. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 17 . . Part Other Taxes 4 Self-employment tax. Attach Schedule SE . . ... Social security and Medicare tax on unreported tip income. Attach Form 4137 5 . . . . Uncollected social security and Medicare tax on wages. Attach Form 8919 6 Total additional social security and Medicare tax. Add lines 5 and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Additional tax on IRAs or other tax-favored accounts. Attach Form 5329 if required . . . . . . . . . . . . . . . . . 8 9 Household employment taxes. Attach Schedule H . .. ... .. .. . . . . . . 9 Repayment of first-time homebuyer credit. Attach Form 5405 if required .. . . . . ... . . . . .. . . . . . . . . . . 10 10 11 Additional Medicare Tax. Attach Form 8959 . . . . . . 11 12 Net investment income tax. Attach Form 8960 . 12 13 Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance from Form W-2, box 12 ... . . . . . . ... 13 Interest on tax due on installment income from the sale of certain residential lots and timeshares .. . . 14 . . . . . 14 Interest on the deferred tax on gain from certain installment sales with a sales price over $150,000 . . . 15 . . . . . 15 16 Recapture of low-income housing credit. Attach Form 8611 .. ...... 16 conti BAA For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 2 (Form Schedule 2 (Form 1040) 2021 David R. and Ella M. Cole 123-45-6788 Part I Other Taxes (continued) 17 Other additional taxes Recapture of other credits. List type, form number, and amount - 17 b Recapture of federal mortgage subsidy. If you sold your home in 2021, see instructions . . . . . . . . . . . . . . . . . . . . . . ... 17b Additional tax on HSA distributions. Attach Form 8889 . . . . . . . . . . . . . . ...... 17c d Additional tax on an HSA because you didn't remain an eligible individual. Attach Form 8889 . . . . 17d e Additional tax on Archer MSA distributions. Attach Form 8853 . ..... ...... 17e Additional tax on Medicare Advantage MSA distributions. Attach Form 8853 17f 9 Recapture of a charitable contribution deduction related to a fractional interest in tangible personal property . .. 17g h Income you received from a nonqualified deferred compensation plan that fails to meet the requirements of section 409A . 17h Compensation you received from a nonqualified deferred compensation plan described in section 457A . . . . . . . . . . . . . .. 17i Section 72(m)(5) excess benefits tax . . . . . . . . . . . . . . . . . . . . . .. 17j k Golden parachute payments . . . . . . . . . . . 17k I Tax on accumulation distribution of trusts . . . . . . . 171 m Excise tax on insider stock compensation from an expatriated corporation . . 17m n Look-back interest under section 167(g) or 460(b) from Form 8697 or 8866 . 17n . Tax on non-effectively connected income for any part of the year you were a nonresident alien from Form 1040-NR . . . . . . ... 170 P Any interest from Form 8621, line 16f, relating to distributions from, and dispositions of, stock of a section 1291 fund . . . . . . . ... 17p 9 Any interest from Form 8621, line 24 . . ... . . . . . . . . . . . . . 17g Any other taxes. List type and amount - 17z 18 Total additional taxes. Add lines 17a through 17z . .... . . . . . . . . ... 18 19 Additional tax from Schedule 8812 . .. 19 Section 965 net tax liability installment from Form 965-A . 20 20 21 Add lines 4, 7 through 16, 18, and 19. These are your total other taxes. Enter here and on Form 1040 or 1040-SR, line 23, or Form 1040-NR, line 23b . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 21 schedule 2 (FSchedule B Complete Coles' Schedule SCHEDULE B (Form 1040) Department of the Treasury Internal Revenue Service (99) Name(s) shown on return David R. and Ella M. Cole Part | Interest (See instructions and the instructions for Form 1040, line 2b.) Note: If you received a Form 1099-INT, Form 1099-0ID, or substitute statement from a brokerage firm, list the firm's name as the payer and enter the total interest shown on that form. B for 2021 Interest and Ordinary Dividends Go to www.irs.gov/ScheduleB for instructions and the latest information. Attach to Form 1040 or 1040-SR. List name of payer. If any interest is from a seller-financed mortgage and the buyer used the property as a personal residence, see the instructions and list this interest first. Also, show that buyer's social security number and address OMB No. 1545-0074 2021 Attachment Sequence No. 08 Your social security number 123-45-6788 Amount U Excludable interest on series EE and | U.S. savings bonds issued after 1989. Attach Form 8815 Subtract line 3 from line 2. Enter the result here and on Form 1040 or 1040- SR, line 2b Note: If line 4 is over $1,500, you must complete Part Ill. Amount Partll Ordinary Dividends (See instructions and the instructions for Form 1040, line 3b.) Note: If you received a Form 1099-DIV or substitute statement from a brokerage firm, list the firm's name as the payer and enter the ordinary dividends shown on that form. 5 List name of payer 6 Add the amounts on line 5. Enter the total here and on Form 1040 or 1040-SR, line 3b Note: If line 6 is over $1,500, you must complete Part I1l. Partlll You must complete this part if you (a) had over $1,500 of taxable interest or ordinary dividends; (b) had a foreign account; or (c) received a distribution from, or were a grantor of, or a transferor s - to, a foreign trust. Foreign 7a At any time during 2021, did you have a financial interest in or signature authority over a A:""'s financial account (such as a bank account, securities account, or brokerage account) and Trusts located in a foreign country? See instructions . ........... ... i % Caution: If required, e falluretoifile FInCEN If 'Yes, are you required to file FinCEN Form 114, Report of Foreign Bank and Financial Form 114 may result in Accounts (FBAR), to report that financial interest or signature authority? See FInCEN Form substantial penalties. See instructions. 114 and its instructions for filing requirements and exceptions to those requirements . . . .. b If you are required to file FinCEN Form 114, enter the name of the foreign country where the financlal'accolint isilocated B e me s e s s o e s 8 During 2021, did you receive a distribution from, or were you the grantor of, or transferor to, a foreign trust? If 'Yes, you may have to file Form 3520. See instructions . .............. X BAA For Paperwork Redu iction Act Notice, see your tax return instructions. Schedule B (Form 1040) 2021 Schedule C Complete Coles' Schedule C for 2021. it or Loss From Business OMB No. 1545-0074 SCHEDULE C (Form 1040) (Sole Proprietorship) Go to www.irs.gov/ScheduleC for instructions and the latest information. 2021 Department of the Treasury Internal Attachment Revenue Service (99) Attach to Form 1040, 1040-SR, 1040-NR, or 1041; partnerships must generally must file Form 1065. Sequence No. 09 Name of proprietor Social security number (SSN) David R. Cole 123-45-6788 Principal business or profession, including product or service (see instructions) B Enter code from instructions Consulting Services 541600 C Business name. If no separate business name, leave blank D Employer ID number (EIN) (see instr.) E Business address (including suite or room no.) 1820 Elk Avenue City, town or post office, state, and ZIP code Denver CO 80202 F Accounting method: (1) & Cash (2) a Accrual (3) a Other (specify) G Did you "materially participate" in the operation of this business during 2021? If "No," see instructions for limit on D No losses H If you started or acquired this business during 2021, check here . . Did you make any payments in 2021 that would require you to file Form(s) 1099? See instructions . .. . .. .. . ... Yes No J If "Yes," did you or will you file required Forms 1099? . .. . . . . ... a Yes D No Part 1 Income 1 Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W-2 and the "Statutory employee" box on that form was checked . Returns and allowances . . . . . 3 Subtract line 2 from line 1 . CT A W N 4 Cost of goods sold (from line 42) . . . . . . . . . .... 5 Gross profit. Subtract line 4 from line 3 . Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) ...... 7 Gross income. Add lines 5 and 6 . . .. Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising . . . ..... . ........ 18 Office expense (see instructions) ...... Car and truck expenses (see 19 Pension and profit-sharing plans . . 19 nstructions) . . . 9 20 Rent or lease (see instructions): 10 Commissions and fees . 10 Vehicles, machinery, and equipment . .. Contract labor (see instructions) . 11 11 b Other business property . . 12 Depletion . . . . . . . . . . . . . . . . .. 21 Repairs and maintenance . . .. ... 13 Depreciation and section 179 22 Supplies (not included in Part III) . expense deduction (not included 23 Taxes and licenses ...... . . . . . . .. .. n Part III) (see instructions) . . 13 24 Travel and meals. ... ..... 14 Employee benefit programs Travel . . . . . . . . . . ... .......... 24a (other than on line 19) .. 14 b Deductible meals (see 15 Insurance (other than health) . . 15 instructions) .. .... . . .. .. . . .. . ... 16 Interest (see instr.): 25 Utilities . . Mortgage (paid to banks, etc.) . 16a Wages (less employment credits) . .... . 16b 27a Other expenses (from line 48) ........ 17 Legal and professional servi served for future use Total expenses before expenses for business use of home. Add lines 8 through 27a . . ... . ..... 28 29 Tentative profit or (loss). Subtract line 28 from line 7 . . 30 Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 Inless using the simplified method. See instructions. Simplified method filers only: enter the total square footage of: (a) your home:_ and (b) the part of your home used for business: . Use the Simplified Method Worksheet in the Instructions to figure the amount to enter on line 30. . . .............. .. ...... . . .. .. .. .. .... .. .... |30 31 Net profit or (loss). Subtract line 30 from line 29. . If a profit, enter on both Schedule 1 (Form 1040), line 3, and on Schedule SE, line 2. 31 If you checked the box on line 1, see instructions). Estates and trusts, enter on Form 1041, line 3. If a loss, you must go to line 32 32 If you have a loss, check the box that describes your investment in this activity See instructions. . If you checked 32a, enter the loss on both Schedule 1 (Form 1040), line 3, and on Schedule SE, 328 0 All investment is line 2. (If you checked the box on line 1, see the line 31 instructions). Estates and trusts, enter on 32b a at risk. Form 1041, line 3. Some investment If you checked 32b, you must attach Form 6198. Your loss may be limited. Is not at risk. BAA For Paperwork Reduction Act Notice, see the separate instructions. Schedule C (Form 1040) 2021 Schedule C (Form 1040) 2021 David R. Cole 123-45-6788 Page 2 Part III Cost of Goods Sold (see instructions 33 Method(s) used to value closing inventory: a X Cost b Lower of cost or market c D Other (attach explanation) 34 Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If "Yes," attach explanation . Yes 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation . . . . . 35 36 Purchases less cost of items withdrawn for personal use . 37 Cost of labor. Do not include any amounts paid to yourself . .. 38 Materials and supplies . . . . . . . . . ....... 39 Other costs . . . . . . . . . . . ... 40 Add lines 35 through 39 . . 40 41 Inventory at end of year . 41 42 Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4 . . Part IV Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not required to file Form 4562 e the instructions for line 13 to find out if you must file Form 4562 43 When did you place your vehi (month/day/year) 14 Of the total number of miles you drove your vehicle during 2021, enter the number of miles you used your vehicle for: a Business c Other 45 Was your vehicle available for personal use during off-duty hours? . . . . . . . . . . . . . . . . . ... Yes O No 16 Do you (or your spouse) have another vehicle available for personal use? . . . . . . . . . . ..... Yes O No 47a Do you have evidence to support your deduction? . .. . . . . . . .... Yes O No b If "Yes," is the evidence written? . ...................................................... Yes O No Part V Other Expenses. List below business expenses not included on lines 8-26 or line 30. 48 Total other expenses. Enter here and on line 27a . . . . . . ....... .......................... 48Schedule SE Complete Cole's Schedule SE for 2021. SCHEDULE SE Self-Employment Tax OMB No. 1545-0074 Form 1040) 2021 Department of the Treasury Internal Go to www.irs.gov/ScheduleSE for instructions and the latest information. Attachment Revenue Service (99) Attach to Form 1040, 1040-SR, or 1040-NR Sequence No. 17 Name of person with self-employment income (as shown on Form 1 wn on Form 1040, 1040-SR, or Social security number of person with 1040-NR) self-employment income 23-45-6788 David R. Cole Part I Self-Employment Tax Note: If your only income subject to self-employment tax is church employee income, see instructions for how to report your income and the definition of church employee income A If you are a minister, member of a religious order, or Christian Science practitioner and you filed Form 4361, but you had $400 or more of other net earnings from self-employment, check here and continue with Part I . .. . Skip lines 1a and 1b if you use the farm optional method in Part II. See instructions. la Net farm profit or (loss) from Schedule F, line 34, and farm partnerships, Schedule K-1 (Form 1065), box 14, code A 1a b If you received social security retirement or disability benefits, enter the amount of Conservation Reserve Program payments included on Schedule F, line 4b, or listed on Schedule K-1 (Form 1065), box 20, code AH Skip line 2 if you use the nonfarm optional method in Part II. See instructions. Net profit or (loss) from Schedule C, line 31; and Schedule K-1 (Form 1065), box 14, code A (other than farming). See instructions for other income to report or if you are a minister or member of a religious order 3 Combine lines 1a, 1b, and 2 . .. 3 4a If line 3 is more than zero, multiply line 3 by 92.35% (0.9235). Otherwise, enter amount from line 3 . . . la Note: If line 4a is less than $400 due to Conservation Reserve Program payments on line 1b, see instructions If you elect one or both of the optional methods, enter the total of lines 15 and 17 here . c Combine lines 4a and 4b. If less than $400, stop; you don't owe self-employment tax. Exception: If less than $400 and you had church employee income, enter -0- and continue . ........ 4c a Enter your church employee income from Form W-2. See instructions for definition of church employee income . Sa b Multiply line 5a by 92.35% (0.9235). If less than $100, enter - 0- . . . . . . . . 5b 6 Add lines 4c and 5b 6 7 Maximum amount of combined wages and self-employment earnings subject to social security tax or the 6.2% portion of the 7.65% railroad retirement (tier 1) tax for 2021 .. 7 Ba Total social security wages and tips (total of boxes 3 and 7 on Form(s) W-2) and railroad retirement (tier 1) compensation. If $142,800 or more, skip lines b through 10, and go to line 11 . . Ba Unreported tips subject to social security tax from Form 4137, line 10 . . .. b Wages subject to social security tax from Form 8919, line 10 . . .. .... 8c d Add lines 8a, 8b, and 8c . 9 Subtract line 8d from line 7. If zero or less, enter -0- here and on line 10 and go to line 11 . .. . ..... 9 10 Multiply the smaller of line 6 or line 9 by 12.4% (0.124) . 10 11 Multiply line 6 by 2.9% (0.029) . 11 2 Self-employment tax. Add lines 10 and 11. Enter here and on Schedule 2 (Form 1040), line 4 . . . . . . 12 13 Deduction for one-half of self-employment tax. Multiply line 12 by 50% (0.50). Enter here and on Schedule 1 (Form 1040), line 15 . . 13 Part II Optional Methods To Figure Net Earnings (see instructions) arm Optional Method. You may use this method only if (a) your gross farm income wasn't more than $8,820, or (b) your net farm profits(2) were less than $6,367. 14 Maximum income for optional methods . . . 14 15 Enter the smaller of: two-thirds (2/3) of gross farm income()(not less than zero) or $5,880. Also, include this amount on line 4b above . 15 Nonfarm Optional Method. You may use this method only if (a) your net nonfarm profits() were less than $6,367 and also less than 72.189% of your gross nonfarm income, " and (b) you had net earnings from self-employment of at least $400 in 2 of the prior 3 years. Caution: You may use this method no more than five times. 16 Subtract line 15 from line 14 . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . .. . . . . . . . . ............. ... 16Form 8995 Complete Roberta's Form 8995. Qualified Business Income Deduction OMB No. 1545-0123 Form 8995 Simplified Computation 2021 Department of the Treasury -Attach to your tax return. Attachment Internal Revenue Service - Go to www.irs.gov/Form8995 for instructions and the latest information Sequence No. 55 Name(s) shown on return Your taxpayer identification number David R. and Ella M. Col 123-45-6788 Note. You can claim the qualified business income deduction only if you have qualified business income from a qualified trade or business, real estate investment trust dividends, publicly traded partnership income, or a domestic production activities deduction passed through from an agricultural or horticultural cooperative. Se instructions. Use this form if your taxable income, before your qualified business income deduction, is at or below $164,900 ($164,925 if married filing separately; $329,800 if married filing jointly), and you aren't a patron of an agricultural or horticultural cooperative (a) Trade, business, or aggregation name (b) Taxpayer identification (c) Qualified business number income or (loss David R. Cole 123-45-6788 Total qualified business income or (loss). Combine lines li through 1v, column (c) . .. 2 3 Qualified business net (loss) carryforward from the prior year . ..... 3 4 Total qualified business income. Combine lines 2 and 3. If zero or less, enter -0-. .. . 5 Qualified business income component. Multiply line 4 by 20% (0.20) . .. . . . . . . . . .... 5 6 Qualified REIT dividends and publicly traded partnership (PTP) income or (loss) (see instructions) 7 Qualified REIT dividends and qualified PTP (loss) carryforward from the prior year . . 8 Total qualified REIT dividends and PTP income. Combine lines 6 and 7. If zero or less, enter -0-. . 8 REIT and PTP component. Multiply line 8 by 20% (0.20) . .... ... . . . . . . . . . . . . . . . . . . . ... 9 10 Qualified business income deduction before the income limitation. Add lines 5 and 9 . . . . . . . . . . . . . . . . . . 10 11 Taxable income before qualified business income deduction (see instructions) . ... 11 2 Net capital gain (see instruction 12 13 Subtract line 12 from line 11. If zero or less, enter -0- . . . . . ... . . . . . . . . . . . 13 4 Income limitation. Multiply line 13 by 20% (0.20) . 14 15 Qualified business income deduction. Enter the smaller of line 10 or line 14. Also enter this amount on the applicable line of your return (see instructions) . 15 16 Total qualified business (loss) carryforward. Combine lines 2 and 3. If greater than zero, enter -0-. . . . . . . 16 17 Total qualified REIT dividends and PTP (loss) carryforward. Combine lines 6 and 7. If greater than zero, enter - 0- . . . . . . . .. .. ..... 17 BAA For Privacy Act and Paperwork Reduction Act Notice, see instructions. Form 8995 (2021)Form 8829 Complete the Coles' Form 8829 for 2021. The applicable depreciation percentage is 2.564%. OMB No . 1545-0074 Form 8829 Expenses for Business Use of Your Home - File only with Schedule C (Form 1040). Use a separate Form 8829 for each home you used for 2021 Department of the Treasury Internal business during the year. Attachment Revenue Service (99) Go to www.irs.gov/Form8829 for instructions and the latest information. Sequence No. 176 Name(s) of proprietor(s) Your social security number David R. Cole 123-45-6788 Part 1 Part of Your Home Used for Business 1 Area used regularly and exclusively for business, regularly for daycare, or for storage of inventory or product samples (see nstructions) . ... 2 Total area of home . . . . .. 3 Divide line 1 by line 2. Enter the result as a percentage . . . . . . . . . . .... 3 For daycare facilities not used exclusively for business, go to line 4. All others, go to line 7. 4 Multiply days used for daycare hr 5 If you started or stopped using your home for daycare during the year, see instructions; otherwise, enter 8,760 . .. hr 6 Divide line 4 by line 5. Ent nal amount . . Business percentage. For daycare facilities not used exclusively for business, multiply line 6 by line 3 (enter the result as a percentage). All others, enter the amount from line 3 . .... - 7 Part II Figure Your Allowable Deduction Enter the amount from Schedule C, line 29, plus any gain derived from the business use of your home, minus any loss from the trade or business not derived from the business use of your home. See instructions. 8 See instructions for columns (a) and (b) before completing lines 9-22. a) Direct expenses (b) Indirect expenses Casualty losses (see instructions) . ..... . . . . . . . 9 0 Deductible mortgage interest (see instructions) . 11 Real estate taxes (see instructions) . ........... 2 Add lines 9, 10, and 11 . . . . . . . 12 3 Multiply line 12, column (b), by line 7 . . . . . . . . . .. . .. . . . . .. 13 14 Add line 12, column (a), and line 13 .. 15 Subtract line 14 from line 8. If zero or less, enter -0-. . ................................. 16 Excess mortgage interest (see instructions) ....... 16 17 Excess real estate taxes (see instructions) . . . . . 17 18 Insurance . . ...................... 18 19 Rent . ........... ... . ... . ... . .. . . . .. . ... 10 Repairs and maintenance . ................... 1 Utilities . .. 2 Other expenses (see instructions) .... Statement.?.... 23 Add lines 16 through 22 . . . . . . . . . 24 Multiply line 23, column (b), by line 7 . . . . . . . . .. 24 25 Carryover of prior year operating expenses (see instructions) ............ 25 26 Add line 23, column (a), line 24, and line 25 . . . . . . . . . . . . .. ... 26 7 Allowable operating expenses. Enter the smaller of line 15 or line 26 ......... . . . .. . .. . .. .. ..... 28 Limit on excess casualty losses and depreciation. Subtract line 27 from line 15 . 28 29 Excess casualty losses (see instructions) . . 29 30 Depreciation of your home from line 42 below . 31 Carryover of prior year excess casualty loss d depreciation (see instructions) 31 32 Add lines 29 through 31 . . . . . . . ... 33 Allowable excess casualty losses and depreciation. Enter the smaller of line 28 or line 32 ............. 4 Add lines 14, 27, and 33 . ..... 5 Casualty loss portion, if any, from lines 14 and 33. Carry amount to Form 4684 See instructions . . . 6 Allowable expenses for business use of your home. Subtract line 35 from line 34. Enter here and on Schedule C, line 30 f your home was used for more than one business, see instructions . 36 Part Ill Depreciation of Your Home 37 Enter the smaller of your home's adjusted basis or its fair market value. See instructions . . . . . . . . . . .. 8 Value of land included on line 37 . 9 Basis of building. Subtract line 38 from line 37 . .. 10 Business basis of building. Multiply line 39 by line 7 .. ..... . . . . . . . . ... .... 41 Depreciation percentage (see instructions) ........ 42 Depreciation allowable (see instructions). Multiply line 40 by line 41. Enter here and on line 30 above . ..... Part IV Carryover of Unallowed Expenses to 2022 43 Operating expenses. Subtract line 27 from line 26. If less than zero, enter - 0- . 44 Excess casualty losses and depreciation. Subtract line 33 from line 32. If less than zero, enter -0-. BAA For Paperwork Reduction Act Notice, see your tax return instructions Form 8829 (2021)Federal Statements Complete David R. and Ella M. Cole's Federal Statements. 2021 Federal Statements Page 1 David R. and Ella M. Cole 123-45-6788 Statement 1 Form 8829, Line 22 Other Expenses Direct Indirect Painting office area etc . . . . . S Total2021 Tax Rate Schedules Use the 2021 Tax Rate Schedules to compute the tax. (Note: Because the tax rate schedules are used instead of the tax tables, the amount of tax computed may vary slightly from the amount listed in the tables.) 2021 Tax Rate Schedules SingleSchedule X Head of householdSchedule Z If taxable of the If taxable of the income is: But not amount income is: But not amount Over over The tax is: over Over over The tax is: over $0 9950 000 e 10% $o $o $142000 000 esess 10% $o0 9,950 40,525 $995.00 + 12% 9,950 14,200 54,200 $1,420.00 + 12% 14,200 40,525 86,375 4,664.00 + 22% 40,525 54,200 86,350 6,220.00 + 22% 54,200 86,375 164,925 14,751.00 + 24% 86,375 86,350 164,900 13,293.00 + 24% 86,350 164,925 209,425 33,603.00 + 32% 164,925 164,900 209,400 32,145.00 + 32% 164,900 209,425 523,600 47,843.00 + 35% 209,425 209,400 523,600 46,385.00 + 35% 209,400 623600 = ...... 157,804.25 + 37% 523,600 523600 @ ...... 156,355.00 + 37% 523,600 Married filing jointly or Qualifying widow(er)Schedule Y-1 Married filing separatelySchedule Y-2 If taxable of the If taxable of the income is: But not amount income is: But not amount Over over The tax is: over Over over The tax is: over $0 $19900 ...... 10% $o $o $99800 00000 ceewe 10% $o0 19,900 81,050 $1,990.00 + 12% 19,900 9,950 40,525 $995.00 + 12% 9,950 81,050 172,750 9,328.00 + 22% 81,050 40,525 86,375 4,664.00 + 22% 40,525 172,750 329,850 29,502.00 + 24% 172,750 86,375 164,925 14,751.00 + 24% 86,375 329,850 418,850 67,206.00 + 32% 329,850 164,925 209,425 33,603.00 + 32% 164,925 418,850 628,300 95,686.00 + 35% 418,850 209,425 314,150 47,843.00 + 35% 209,425 628300 @ ...... 168,993.50 + 37% 628,300 314150 sweaw 84,496.75 + 37% 314,150 Instructions Note: This problem is for the 2021 tax year. David R. and Ella M. Cole (ages 39 and 38, respectively) are husband and wife who live at 1820 Elk Avenue, Denver, CO 80202. David is a self-employed consultant specializing in retail management, and Ella is a dental hygienist for a chain of dental clinics. David earned consulting fees of $145,000 in 2021. He maintains his own office and pays for all business expenses. The Coles are adequately covered by the medical plan provided by Ella's employer but have chosen not to participate in its 401(k) retirement plan. David's employment-related expenses for 2021 are summarized below. Airfare $8,800 Lodging 4,835 Meals from restaurants (during travel status) 2,400 Entertainment 3,600 Ground transportation (e.g., limos, rental cars, and taxis) 800 Business gifts 900 Office supplies (includes postage, overnight delivery, and copying) 1,500 The entertainment involved taking clients to sporting and musical events. The business gifts consisted of $50 gift certificates to a national restaurant. These were sent by David during the Christmas holidays to 18 of his major clients. In addition, David drove his 2019 Ford Expedition 11,000 miles for business and 3,000 for personal use during 2021. He purchased the Expedition on August 15,2018, and has always used the automatic (standard) mileage method for tax purposes. Parking and tolls relating to business use total $340 in 2021. When the Coles purchased their present residence in April 2018, they devoted 450 of the 3,000 square feet of living space to an office for David. The property cost $440,000 ($40,000 of which is attributable to the land) and has since appreciated in value. Expenses relating to the residence in 2021 (except for mortgage interest and property taxes; see below) are as follows: Insurance $2,600 Repairs and maintenance 900 Utilities 4,700 Painting office area; area rugs and plants (in the office)* 1,800 *Treat as a direct office in home expense. In terms of depreciation, the Coles use the MACRS percentage tables applicable to 39-year nonresidential real property. As to depreciable property (e.g., office furniture), David tries to avoid capitalization and uses whatever method provides the fastest write-off for tax purposes. Ella works at a variety of offices as a substitute when a hygienist is ill or on vacation or when one of the clinics is particularly busy (e.g., prior to the beginning of the school year). Assume that Ella is an employee (not an independent contractor). Besides her transportation, she must provide and maintain her own uniforms. Her expenses for 2021 appear below. Uniforms $690 State and city occupational licenses 380 Professional journals and membership dues in the American Dental Hygiene Association 340 Correspondence study course (taken online) dealing with teeth whitening procedures 420 amount of Social Security and Medicare taxes. Interest income Ella's salary for the year is $42,000, and her Form W-2 for the year shows income tax withholdings of $4,000 (Federal) and $1,000 (state) and the proper Besides the items already mentioned, the Coles had the following receipts during 2021. State of Colorado general purpose bonds $2,500 IBM bonds 800 Wells Fargo Bank 1,200 $4,500 Federal income tax refund for year 2020 510 Life insurance proceeds paid by Eagle Assurance Corporation 200,000 Inheritance of savings account from Sarah Cole 50,000 Sales proceeds from two ATVs 9,000 For several years, the Coles' household has included David's divorced mother, Sarah, who has been claimed as their dependent. In late December 2020, Sarah unexpectedly died of heart attack in her sleep. Unknown to Ella and David, Sarah had a life insurance policy and a savings account (with David as the designated beneficiary of each). In 2020, the Coles purchased two ATVs for $14,000. After several near mishaps, they decided that the sport was too dangerous. In 2021, they sold the ATVs to their neighbor. Additional expenditures for 2021 include: Funeral expenses for Sarah Taxes Real property taxes on personal residence Colorado state income tax due (paid in April 2021 for tax year 2020) Mortgage interest on personal residence (Rocky Mountain Bank) Contributions to traditional IRAs for Ella and David ($6,000 + $6,000) Relevant Social Security numbers are: David Cole 123-45-6788 Ella Cole 123-45-6787 $4,500 $6,400 310 6710 6,600 12,000 In 2021, the Coles made quarterly estimated tax payments of $6,000 (Federal) and $500 (state) for a total of $24,000 (Federal) and $2,000 (state). The Coles have never owned or used any virtual currency. The Coles received the appropriate coronavirus recovery rebates (economic impact payments); related questions in ProConnect Tax should be ignored. They do not want to contribute to the Presidential Election Campaign Fund. Also, the Coles want any overpayment of tax refunded to them and not applied toward next year's tax liability. David will have a self-employment tax liability. Required: Using the appropriate forms and schedules, compute the Coles' Federal income tax for 2021. education credits. Make realistic assumptions about any missing data. Enter all amounts as positive numbers. If an amount box does not require an entry or the answer is zero, enter If required, round all dollar amounts to the nearest dollar. It may be necessary to complete the tax schedules before completing Form 1040. Disregard the alternative minimum tax (AMT) and the various Use the included tax rates schedules to compute the tax. When computing the tax liability, do not round your immediate calculations. If required, round your final answers to the nearest dollar