Janice Morgan, age 24, is single and has no dependents. She is a freelance writer. In January 2018, 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 123-45-6789. Janices parents continue to provide health insurance for her under their policy. Janice wants to contribute to the Presidential Election Campaign Fund.

During 2018, 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 from the sales tax table is $437.

Janice reports interest income of $4,000 on certificates of deposit at Second National Bank. Janice makes estimated tax payments of $3,000 for 2018.

Adjusted gross income 20,263 Itemized deductions 12,650

Taxable income 6,090

Compute Janice Morgans 2018 Federal income tax payable (or refund due). If you use tax forms for your computations, you will need Forms 1040 Schedule B and C

SCHEDULE B (Form 1040) Department of the Tre OMB No. 1545-0074 Interest and Ordinary Dividends 2018 Go to www.irs.gov/ScheduleB for instructions and the latest information. Attach to Form 1040. Attachment Internal Revenue Service uence No. 08 Name(s) shown on return Your social security number Part I 1 Amount 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 Interest (See instructions and the instructions for Form 1040 line 2b.) Note: If you received a Form 1099-INT, Form 1099-OID, or substitute statement from a brokerage firm, list the firm's name as the payer and enter the total interest shown on that form. 3 Excludable interest on series EE and I U.S. savings bonds issued after 1989 4 Subtract line 3 from line 2. Enter the result here and on Form 1040, line 2b 5 List name of payer Note: If line 4 is over $1,500, you must complete Part Ill Amount Part II Ordinary Dividends (See instructions and the instructions for Form 1040 line 3b.) 5 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. Add the amounts on line 5. Enter the total here and on Form 1040, line 3b Note: If line 6 is over $1,500, you must complete Part Ill 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 to, a foreign trust Part IIl Yes No Foreign Accounts and Trusts 7a At any time during 2018, did you have a financial interest in or signature authority over a financial account (such as a bank account, securities account, or brokerage account) located in a foreign If "Yes," are you required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), to report that financial interest or signature authority? See FinCEN Form 114 and its instructions for filing requirements and exceptions to those requirements.. . (See instructions.) b If you are required to file FinCEN Form 114, enter the name of the foreign country where the financial account is located During 2018, 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 8 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 17146N Schedule B (Form 1040) 2018 SCHEDULE C Profit or Loss From Business (Sole Proprietorship) Go to www.irs.gov/ScheduleC for instructions and the latest information Attach to Form 1040, 1040NR, or 1041 ; partnerships generally must file Form 1065 OMB No. 1545-0074 (Form 1040) 2018 Department of the Treasury Internal Revenue Service (99 Attachment Sequence No. 09 Name of proprietor Social security number (SSN) A B Enter code from instructions Principal business or profession, including product or service (see instructions) Business name. If no separate business name, leave blank. Business address (including suite or room no.) D Employer ID number (EIN) (see instr.) E town or post office and ZIP code F Accounting method: Cash (2 Accrual (3) Other(specify) G Did you "materially participate" in the operation of this business during 2018? If "No." see instructions for limit on lossesYes No H If you started or acquired this business during 2018, check here . . . . . . . . . . . . . . . YesNo Did you make any payments in 2018 that would require you to file Form(s) 1099? (see instructions).. If "Yes," did you or will you file required Forms 1099? . es Part I Income 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... .....> 1 3 Subtract line 2 from line 1 4 Cost of goods sold (from line 42) .. . 5 Gross profit. Subtract line 4 from line 3.. . 6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions).. 6 7 Gross income. Add lines 5 and 6 3 4 5 Part Il Expenses. Enter expenses for business use of your home only on line 30 8 Advertising. . 8 18 Office expense (see instructions)18 19 Pension and profit-sharing plans. 20 Rent or lease (see instructions) 9 Car and truck expenses (see instructions). Commissions and fees. 9 10 11 . 10 11 12 Depletion. . 13 Vehicles, machinery, and equipment Other business property Repairs and maintenance Supplies (not included in Part III) 20a 20b a Contract labor (see instructions) b 21 22 Depreciation and section 179 expense deduction not included in Part III) (see instructions). Employee benefit programs other than on line 19) 22 23 13 24 Travel and meals: . 14 b Deductible meals (see instructions) .. .. 15 Insurance (other than health) 15 16 24b Interest (see instructions): Mortgage (paid to banks, etc.) 26 Wages (less employment credits). 26 27a Other expenses (from line 48)27a 27b 28 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 . . . . . . . . . . . . . . . . . 29 a 16a 17 Legal and professional services 17 b Reserved for future use 30 Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless 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: Method worksheet in the instructions to figure the amount to enter on line 30 ' Net profit or (loss). Subtract line 30 from line 29 If a profit, enter on both Schedule 1 (Form 1040), line 12 (or Form 1040NR, line 13) and on Schedule SE line 2. 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 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 12 (or Form 1040NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see the line 31 instructions). Estates and trusts, enter on Form 1041, line 3. If you checked 32b Use the Simplified 30 . . . . . . . . 31 32 32All investment is at risk. 32bSome investment is not at risk u must attach Form 6198. Your loss may be limited. Part III Cost of Goods Sold (see instructions 33 Method(s) used to value closing inventory: a Cost Lower of cost or market Was there any change in determining quantities, costs, or valuations between opening and closing inventory? c Other (attach explanation) 34 Yes No 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation35 36 Purchases less cost of items withdrawn for personal use. 37 Cost of labor. Do not include any amounts paid to yourself... . . 36 37 38 40 Add lines 35 through 39. . 41 Inventory at end of year. 42 Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4 40 42 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 for this business. See the instructions for line 13 to find out if you must file Form 4562 43 When did you place your vehicle in service for business purposes? (month, day, year) 44 Of the total number of miles you drove your vehicle during 2018, enter the number of miles you used your vehicle for a Business b Commuting (see instructions) c Other Yes No Yes No YesNo 45 Was your vehicle available for personal use during off-duty hours?...... .. . 46 Do you (or your spouse) have another vehicle available for personal use?. . 47a Doyou have evidence to support your deduction?... . Yes No b If "Yes," is the evidence written? Part V Other Expenses. List below business expenses not included on lines 8-26 or line 30 48 Total other exp Enter here and on line 27a 48