Instructions
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Note: This problem is for the 2019 tax year.
Janice Morgan, age 24, is single and has no dependents. She is a freelance writer. In January 2019, Janice opened her own office located at 2751 Waldham Road, Pleasant Hill, NM 88135. She called her business Writers Anonymous. Janice is a cash basis taxpayer. She lives at 132 Stone Avenue, Pleasant Hill, NM 88135. Her Social Security number is 123-45-6782. Janice's parents continue to provide health insurance for her under their policy. Janice did not engage in any virtual currency transactions during the year and wants to contribute to the Presidential Election Campaign Fund.
During 2019, Janice reported the following income and expense items connected with her business.
| Income from sale of articles | $85,000 |
| Rent | 16,500 |
| Utilities | 7,900 |
| Supplies | 1,800 |
| Insurance | 5,000 |
| Travel (including meals of $1,200) | 3,500 |
Janice purchased and placed in service the following fixed assets for her business. Janice wants to elect immediate expensing under 179, if possible.
- Furniture and fixtures (new) costing $21,000 on January 10
- Computer equipment (new) costing $12,400 on July 28
Janices itemized deductions include:
| State income tax | $2,950 |
| Home mortgage interest paid to First National Bank | 6,000 |
| Property taxes on home | 2,500 |
| Charitable contribution to her alma mater, State College | 1,200 |
Janice did not keep a record of the sales tax she paid. The amount allowed by the sales tax table is $437. Janice reports interest income of $4,000 on certificates of deposit at Second National Bank. She made estimated tax payments of $3,000 for 2019.
Required: Compute Janice Morgans 2019 Federal income tax payable (or refund due).
- 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.
- The taxpayer wants $3 to go to the to Presidential Election Campaign.
- It may be necessary to complete the other tax forms and schedules before completing Form 1040.
- Use the tax schedules (not the tax tables) included with this problem to compute the tax.
- If required, round your final answers to the nearest dollar.
PLEASE FILL IN BLANKS FOR 2019 FORM 1040:
2019 OMB No. 1545-0074 IRS Use Only 1040 U.S. Individual Income Tax Return Filing Status Your first name and middle initial Janice Morgan If joint return, spouse's first name and middle initial Last name Last name Apt. no. Home address (number and street). If you have a P.O. box, 132 Stone Avenue Your social security number 123-45-6782 Spouse's social security number Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. spaces below City, town or post office, state, and ZIP code. If you ! (see instructions). Pleasant Hill, NM 88135 Foreign country name Foreign province/state/county Foreign postal code If more than four dependents, see instructions and here Standard Deduction Someone can claim: You: Age/Blindness Spouse: (2) Social security number (3) Relationship to you Dependents (see instructions): (1) First name Last name (4) Vif qualifies for (see instructions): Child tax credit Credit for other dependents 1 1 b 2a 2b 3b Wages, salaries, tips, etc. Attach Form(s) W-2. Taxable interest. Attach Sch. B 2a Tax-exempt interest .. if required b Ordinary dividends. Attach Sch. 3a Qualified dividends ... 3a B if required 4a IRA distributions ..... b Taxable amount c Pensions and annuities d Taxable amount 5a Social security benefits b Taxable amount Capital gain or loss). Attach Schedule D if required. If not required, check here 7a Other income from Schedule 1, line 9 4a 4b 4c 4d 5a 5b 6 6 7a Standard Deduction for- Single or Married filing separately, $12,200 Married filing jointly or Qualifying widow(er), $24,400 Head of household, $18,350 If you checked any box under Standard Deduction, see instructions. b Add lines 1, 26, 35, 46, 40, 55, 6, and 7a. This is your total income 7b 8a Adjustments to income from Schedule 1, line 22 8a b Subtract line 8a from line 7b. This is your adjusted gross income A 8b 9 9 Standard deduction or itemized deductions (from Schedule A)... 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A... 11a Add lines 9 and 10 10 11a b Taxable income. Subtract line 11a from line 8b. If zero or less, enter-O- 11b 12b 12a Tax (see inst.) Check if any from Form(s): 18814 20 4972 30 12a b Add Schedule 2, line 3, and line 12a and enter the total 13a Child tax credit or credit for other dependents. 13a b Add Schedule 3, line 7, and line 13a and enter the total Subtract line 13b from line 12b. If zero or less, enter-O- Other taxes, including self-employment tax, from Schedule 2, line 10 A 13b 14 14 15 15 16 16 17 18 18a 18d Add lines 14 and 15. This is your total tax. 17 Federal income tax withheld from Forms W-2 and 1099 If you have a Other payments and refundable credits: qualifying child, a Earned income credit (EIC)... attach Sch. EIC If you have b Additional child tax credit. Attach Schedule 8812 18b nontaxable c American opportunity credit from Form 8863, line 8. 18c combat pay, see instructions. d Schedule 3, line 14 e Add lines 18a through 18d. These are your total other payments and refundable credits .. Add lines 17 and 18e. These are your total payments Refund If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid .... 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here Direct deposit? Routing number cType: Checking Savings 18e 19 19 20 20 21a See instructions. d Account number 22 Amount of line 20 you want applied to your 2020 estimated tax.. 22 23 Amount Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions 23 You Owe 24 Estimated tax penalty (see instructions) 24 Third Party Do you want to allow another person (other than your paid preparer) to discuss this return with Yes. Complete below. the IRS? See instructions. No Designee (Other than Designee's Phone Personal identification paid preparer) name no. number (PIN) Sign Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than Here taxpayer) is based on all information of which preparer has any knowledge. Your signature Date Your occupation If the IRS sent you an Identity Joint return? Protection PIN, enter it here See Writer (see inst.) instructions. Keep a copy for Spouse's signature. If a joint Date Spouse's occupation If the IRS sent your spouse an your records. return, both must sign. Identity Protection PIN, enter it here (see inst.) Phone no. Email address Preparer's name Paid Date Preparer's signature PTIN Check if: Self-Prepared 3rd Party Designee Preparer Firm's name Phone no. Self-employed Use Only Firm's address Firm's EIN
