Jacqueline Jacinto was married, however, her husband Raul passed away in 2019. Jacqueline has two children, Jackie and Johnny. Jacqueline worked as the Pastry Chef at the Dulce Bakery in Las Cruces, NM earning a salary of $79,850. She also did some catering work on the side and reported revenues of $14,990. Jacqueline won $6,825 in gambling pools at work for NFL games. Lastly, she received $10,000 from Rauls life insurance policy that paid out in 2020. DO NOT prepare any state income tax returns The Jacintos live at 3015 Agave Ridge, Santa Teresa, NM 88008 Jacqueline s birthday is 5/23/1981 and her Social Security number is 588-19-1198 Jackies birthday is 12/7/2010 and her Social Security number is 536-53-6385 Johnnys birthday is 6/27/2013 and his Social Security number is 539-44-6721 The Jacintos do not have any foreign bank accounts or trusts, nor did they have any transactions with virtual currency Jacqueline did file forms 1099 (contract labor) for her catering services as required and she uses the cash method of accounting for her business The Jacintos had health insurance coverage all year provided by Dulce Bakery The Jacintos want you to determine the best filing status for their family The Jacintos do not qualify for any Recovery Rebate Credit A $2,000 child tax credit is available for each child under the age of 17 (box 19 Form 1040) Do not consider AMT tax for the tax return For Form 8895 (Line 1i, Line 2, and Line 4) The Total qualified business income amount is the net income from Schedule C (line 31) less the employer portion of self-employment taxes from Schedule SE (line 13). Determine the qualified business income deduction available for Jacquelines catering business (line 5 Form 8995 and line 13 Form 1040). Continued on next page The Jacintos reported the following activities and payments during the year 2020 Activity Jacquelines W2 Information: Salary $ 79,850 Federal income tax withheld 3,250 State income tax withheld 2,230 Social Security tax withheld 4,951 Medicare tax withheld 1,158 Business Activity Jacquelines Catering Income $ 14,990 Business office expense 1,020 Contract labor expense 2,450 Business insurance expense 3,060 Advertising 1,850 Business meals expense (100%) 900 Repairs 1,320 Tax preparation fees $ 670 Gambling losses for the year 4,800 Real estate taxes paid on residence 5,005 Home mortgage interest paid 5,925 (original loan $350,000 in 2013, outstanding balance of $206,000) Home- equity loan interest paid 2,980 Jacqueline used the home equity loan to pay for her trip to Las Vegas to gamble. Interest was paid to LFCU (outstanding balance of $55,000) Cash contributions to Good Shepherd church (Jacqueline has receipts) 2,530 Medical expenses 1,702