Keisha and Jay are married and file a joint return. Jay is an employee and received a Form W-2 showing $30,000 in wages for the year. Keisha is a self-employed driver for Delicious Deliveries. Keisha and Jay had health insurance subsidized by Jay's employer. They paid $3,600 pre-tax in premiums for the year. Keisha provided a statement from the food delivery service that indicated the amount of mileage driven and fees paid for the year. These fees are considered ordinary and necessary for the food delivery business: 7,200 miles driven while delivering food Insulated box rental: $300 Vehicle safety inspection (required by Delicious Deliveries): $50 GPS device fee: $120 click here to see Keisha's 1099-NEC and 1099-K Keisha also kept receipts for the following out-of-pocket expenses: $100 for tolls $120 for car washes $48 for parking tickets $75 for Personal Protective Equipment (PPE) used during deliveries $150 for snacks and lunches Keisha consumed while working Keisha's record keeping application shows she also drove 4,125 miles between deliveries and 4,200 miles driven between her home and her first and last delivery point of the day. Keisha has a separate car for personal use. She bought and started using her second car for business on September 1, 2020. Keisha provided the Form 1099-NEC and Form 1099-K that she received from Delicious Deliveries. See the next page. Keisha also received $300 in cash tips that were not reported elsewhere. Keisha and Jay also paid the following this year: Mortgage interest = $5,000 Property tax = $3,000 Donations of clothing in good used condition = $350 (fair market value) Cash donations to qualified charities = $550 == Tools for Jay's job = $300 State income taxes withheld = $4,000 Keisha won $10,000 on a scratch off lottery ticket. She has $3,000 of losing tickets. Keisha and Jay also paid the following this year: Mortgage interest = $5,000 Property tax = $3,000 Donations of clothing in good used condition = $350 (fair market value) Cash donations to qualified charities = $550 Tools for Jay's job = $300 State income taxes withheld = $4,000 H Keisha won $10,000 on a scratch off lottery ticket. She has $3,000 of losing tickets. 13. The maximum amount Keisha and Jay can claim as a charitable contribution if they take the standard deduction is $300. True False CORRECTED (if checked) FILER'S name, street address, city or town, state or province, country, ZIP or foreign postal code, and telephone no. Delicious Deliveries 567 ALVIN AVENUE YOUR CITY, YOUR STATE, ZIP Check to indicate if FILER is a (an Payment settlement entity (PSE) Electronic Payment Facilitator (EPF/Other third party PAYEE'S name Check to indicate transactions reported are Payment card Third party network Keisha Johnson FILER'S TIN 20-400XXXX PAYEE'S TIN 345-00-XXXX 1a Gross amount of payment card/third party network transactions 15,245.00 1b Card Not Present transactions $ 3 Number of payment transactions 3,300 OMB No. 1545-2205 2021 Form 1099-K Payment Card and Third Party Network Transactions 2 Merchant category code 4 Federal income tax withheld 5b February Copy B For Payee This is important tax information and is being furnished to the IRS. If you are required to file a return, a negligence penalty or other Street address (including apt. no.) 789 DANA DRIVE City or town, state or province, country, and ZIP or foreign postal code YOUR CITY, YOUR STATE, ZIP PSE'S name and telephone number Account number (see instructions) Form 1099-K (Keep for your records) Sa January $ 1,270.00 $ 1,200.00 Se March 5d April $ 1,340.00 $ 1,250.00 sanction may be 5e May 5 June $ 1,290.00 $ 1,300.00 5g July Sh August $ 1,240.00 $ 1,140.00 imposed on you if results from this transaction and the IRS determines that it has not been reported. taxable income Si September 5 October $ 1,270.00 $ 1,235.00 Sk November 51 December $ 1,310.00 $ 1,400.00 6 State 7 State identification no. 8 State income tax withheld www.irs.gov/Form1099K Department of the Treasury-Internal Revenue Service CORRECTED (if checked) OMB No. 1545-0116 PAYER'S name, street address, city or town, state or province, country, ZIP or foreign postal code, and telephone no. Delicious Deliveries 567 ALVIN AVENUE YOUR CITY, YOUR STATE, ZIP PAYER'S TIN 20-400XXXX RECIPIENT'S name Keisha Johnson Street address (including apt. no.) 789 DANA DRIVE 2021 Form 1099-NEC RECIPIENT'S TIN 1 Nonemployee compensation 345-00-XXXX 1,800.00 2 Payer made direct sales totaling $5,000 or more of consumer products to recipient for resale 4 Federal income tax withheld City or town, state or province, country, and ZIP or foreign postal code YOUR CITY, YOUR STATE, ZIP 5 State tax withheld 6 State/Payer's state no. Account number (see instructions) Form 1099-NEC (keep for your records) www.irs.gov/Form1099NEC Nonemployee Compensation. Copy B For Recipient This is important tax information and is being tumished to the IRS. If you are required to file a retum, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported 7 State income Department of the Treasury - Internal Revenue Service 14. Keisha is not eligible for a self-employed health insurance deduction. True False