Ken (birthdate July 1, 1987) and Amy (birthdate July 4, 1989) Booth have brought you the following information regarding their income, expenses, and withholding for the year. They are unsure which of these items must be used to calculate taxable income

Standard Deduction for- Single or married filing separately, $12,000 8 Standard deduction or itemized deductions (from Schedule A) 9 Qualified business income deduction (see instructions) 10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter-0 11 a Tax (see inst) check if any from: 1Form(s) 8814 2 Form 4972 or Qualifyingb b Add any amount from Schedule 2 and check here widow(er), $24,000 Head of 12 aChil tax credit/credit for other dapandents b Add any amount from Schodule 3 and check here Subtract line 12 from line 11. If zero or less, enter-0 Other taxes. Attach Schedule 4 Total tax. Add lines 13 and 14 12 13 14 15 16 $18,000 If you checked any box under 13 14 15 16 17 Federal income tax withheld from Forms W-2 and 1099 Refundable credits: a EIC (see inst.) c Form 8863 Add any amount from Schedule 5 Add lines 16 and 17, These are your total payments bSch 8812 17 18 18 19 If line 18 is more than line 15, subtract line 15 from ine 18. This is the amount you Refund 19 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here 20a Direct deposit?bRouting number See instructions.dAccount number 21 cType: Checking Savings Amount of line 19 you want applied to your OMB No. 1545-0074 SCHEDULE 1 (Form 1040) Department of the Treasury Internal Revenue Service Additional Income and Adjustments to Income 2018 O Attach to Form 1040. 0 Go to www.irs.gov/Form 1040 for instructions and the latest information. Sequence No. 01 Name(s) shown on Form 1040 Ken and Amy Booth Your social security number 343-75-3456 Additiona 1-9b Reserved 1-9b 10 10 11 12 13 Taxable refunds, credits, or offsets of state and local income taxes Alimony received Business income or (loss). Attach Schedule C or C-EZ Capital gain or (loss). Attach Schedule D if required. If not required, check here Income 12 14 15a 16 17 Other gains or (losses). Attach Form 4797 Reserved Reserved Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or (loss). Attach Schedule F 13 14 15b 16b 17 18 19 20b 21 18 20a Reserved 21 Other income. List type and amount 21 Other income. List type and amount 21 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter here and include on Form 1040, line 6. Otherwise, go to line 23 22 Adiuctmente 23 Educator expenses 23 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 2 Returns and allowances 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) 7 Gross income. Add lines S and 6 Part II 8 Advertising 9 Car and truck expenses (see Expenses. Enter expenses for business use of your home only on line 30 18 18 Omice expense (see instructions) 19 Pension and profa-sharing plans 20 Rent or lease (see instructions): 19 10 Commissions and fees 11 Contract labor (see instructions) 12 Depletion 13 Depreciation and section 179 10 11 12 20a 0b 21 a Vehicles, machinery, and equipment b Other business property 21 Repairs and maintenance 22 Supplies (not included in Part ITT 23 Taxes and licenses 24 Travel and meals: expense deduction (not included 23 in Part IlI) (see instructions) 13 14 Employee benefit programs (other than on line 19) 15 Insurance (other than health 16 Interest (see instructions): a Travel 14 b Deductible meals (see 15 24b 25 26 27a 27b 28 29 a Mortgage (paid to banks, otc.) 16a 16b 17 5 Utilities 26 Wages (less employment credits) 27a Other expenses (from line 48) b Other 17 Legal and professional services 28 Total expenses before expenses for business use of home. Add lines8 through 27a 29 Tentative profnt 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 unlesS b Reserved for future use using the simplfied method (see instructions). Simplified method filers only: enter the total square footage of: (a) your home: of your home used for business: the amount to enter on line 30 and (b) the part Use the Simplified Method Worksheet in the instructions to figure 30 31 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 31 Part Cost of Goods Sold (see instructions) 33 Method(s) used to value dosing inventory: a Cost b O Lower of cost or market c o Other (attach explanation) 34 Was there any change in determining quantities, costs, or valuations between opening and closing inventory If "Yes," attach explanation Yes No 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation 35 b Totals for all transactions reported on Form(s) 8949 with Box A checked 2 Totals for all transactions reported on Form(s) 8949 with Box B checked 3 Totals for all transactions reported on Form(s) 8949 with Box C checked 4 Short-term gain from Form 6252 and short-term gain or (loss) from Forms 4684, 6781, and 8824 5 Net short-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 6 Short-term capital loss carryover Enter the amount, if any, from line 8 of your Capital Loss Carryover Worksheet in the instructions 7 Net short-term capital gain or (loss). Combine lines la through 6 in column (h). If you have any long-term capital gains or losses, go to Part II below. Otherwise, go to Part III on the back Schedule D (Form 1040) 2018 Ken & Amy Booth 343-75-3456 Page 2 Part Summary 16 Combine lines 7 and 15 and enter the result 16 If line 16 is a gain, enter the amount from line 16 on Schedule 1 (Form 1040), line 13, or Form 1040NR, line 14. Then go to line 17 below If line 16 is a loss, skip lines 17 through 20 bellow. Then go to line 21. Also be sure to complete line 22 If line 16 is zero, skip lines 17 through 21 below and enter -0-on Schedule 1 (Form 1040), line 13, or Form 104ONR, line 14. Then go to line 22 17 Are lines 15 and 16 both gains? Y s. Go to line 18. O No. Skip lines 18 through 21, and go to ine 22 18 lf you are required to complete the 28% Rate Gain worksheet (see instructions), enter the amount, if any, from line 7 of that worksheet 18 If you are required to complete the Unrecaptured Section 1250 Gain Worksheet (see instructions), enter the amount, if any, from line 18 of that worksheet 19 20 Are lines 18 and 19 both zero or blank? D Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, line 11a (or in the instructions for Form 1040NR, line 42). Don't complete lines 21 and 22 below. No. Complete the Schedule D Tax worksheet in the instructions. Don't complete lines 21 and 22 below. 21 If line 16 is a loss, enter here and on Schedule 1 (Form 1040), line 13, or Form 1040NR, line 14, the smaller of 21 The loss on line 16; or e ($3,000), or if married filing separately, ($1,500) You must check Box A, B, or C below. Check only one box. If more than one box applies for your short-term transactions, complete a separate Form 8949, page 1, for each applicable box. If you have more short-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need D (A) Short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) D (B) Short-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (C) Short-term transactions not reported to you on Form 1099-B You must check Box A, B, or C below. Check only one box. If more than one box applies for your short-term transactions, complete a separate Form 8949, page 1, for each applicable box. If you have more short-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need D (A) Short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) D (B) Short-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (C) Short-term transactions not reported to you on Form 1099-B Adjustment, if any, to gain or less. If you enter an amount in column (g), Gain or (loss). Cost or other enter a code in column (r). Subtract colurmn Date sold or Dascription of property Date qddisposed of basis. See the sales price) Note below and see Column (e) See the separate instructions. Proceeds (e) from column (d) and combine the result with price Example: 100 sh. XYZ Co.) (Mo., day, yr.) (see (Mo, day, yr)n (n nstructions)in the separate Code(s) from Amount of comn (9) instructions adjustment Non-Business Bad Debt 12/31/18 2 Totals. Add the amounts in columns (d), (e), (g), and (h) (subtract negative amounts), Enter each total here and include on your Schedule D, line 1b (if Box A above is checked), line 2 (if Box B above is checked), or line 3 (if Box C above is checked) Standard Deduction for- Single or married filing separately, $12,000 8 Standard deduction or itemized deductions (from Schedule A) 9 Qualified business income deduction (see instructions) 10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter-0 11 a Tax (see inst) check if any from: 1Form(s) 8814 2 Form 4972 or Qualifyingb b Add any amount from Schedule 2 and check here widow(er), $24,000 Head of 12 aChil tax credit/credit for other dapandents b Add any amount from Schodule 3 and check here Subtract line 12 from line 11. If zero or less, enter-0 Other taxes. Attach Schedule 4 Total tax. Add lines 13 and 14 12 13 14 15 16 $18,000 If you checked any box under 13 14 15 16 17 Federal income tax withheld from Forms W-2 and 1099 Refundable credits: a EIC (see inst.) c Form 8863 Add any amount from Schedule 5 Add lines 16 and 17, These are your total payments bSch 8812 17 18 18 19 If line 18 is more than line 15, subtract line 15 from ine 18. This is the amount you Refund 19 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here 20a Direct deposit?bRouting number See instructions.dAccount number 21 cType: Checking Savings Amount of line 19 you want applied to your OMB No. 1545-0074 SCHEDULE 1 (Form 1040) Department of the Treasury Internal Revenue Service Additional Income and Adjustments to Income 2018 O Attach to Form 1040. 0 Go to www.irs.gov/Form 1040 for instructions and the latest information. Sequence No. 01 Name(s) shown on Form 1040 Ken and Amy Booth Your social security number 343-75-3456 Additiona 1-9b Reserved 1-9b 10 10 11 12 13 Taxable refunds, credits, or offsets of state and local income taxes Alimony received Business income or (loss). Attach Schedule C or C-EZ Capital gain or (loss). Attach Schedule D if required. If not required, check here Income 12 14 15a 16 17 Other gains or (losses). Attach Form 4797 Reserved Reserved Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or (loss). Attach Schedule F 13 14 15b 16b 17 18 19 20b 21 18 20a Reserved 21 Other income. List type and amount 21 Other income. List type and amount 21 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter here and include on Form 1040, line 6. Otherwise, go to line 23 22 Adiuctmente 23 Educator expenses 23 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 2 Returns and allowances 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) 7 Gross income. Add lines S and 6 Part II 8 Advertising 9 Car and truck expenses (see Expenses. Enter expenses for business use of your home only on line 30 18 18 Omice expense (see instructions) 19 Pension and profa-sharing plans 20 Rent or lease (see instructions): 19 10 Commissions and fees 11 Contract labor (see instructions) 12 Depletion 13 Depreciation and section 179 10 11 12 20a 0b 21 a Vehicles, machinery, and equipment b Other business property 21 Repairs and maintenance 22 Supplies (not included in Part ITT 23 Taxes and licenses 24 Travel and meals: expense deduction (not included 23 in Part IlI) (see instructions) 13 14 Employee benefit programs (other than on line 19) 15 Insurance (other than health 16 Interest (see instructions): a Travel 14 b Deductible meals (see 15 24b 25 26 27a 27b 28 29 a Mortgage (paid to banks, otc.) 16a 16b 17 5 Utilities 26 Wages (less employment credits) 27a Other expenses (from line 48) b Other 17 Legal and professional services 28 Total expenses before expenses for business use of home. Add lines8 through 27a 29 Tentative profnt 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 unlesS b Reserved for future use using the simplfied method (see instructions). Simplified method filers only: enter the total square footage of: (a) your home: of your home used for business: the amount to enter on line 30 and (b) the part Use the Simplified Method Worksheet in the instructions to figure 30 31 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 31 Part Cost of Goods Sold (see instructions) 33 Method(s) used to value dosing inventory: a Cost b O Lower of cost or market c o Other (attach explanation) 34 Was there any change in determining quantities, costs, or valuations between opening and closing inventory If "Yes," attach explanation Yes No 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation 35 b Totals for all transactions reported on Form(s) 8949 with Box A checked 2 Totals for all transactions reported on Form(s) 8949 with Box B checked 3 Totals for all transactions reported on Form(s) 8949 with Box C checked 4 Short-term gain from Form 6252 and short-term gain or (loss) from Forms 4684, 6781, and 8824 5 Net short-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 6 Short-term capital loss carryover Enter the amount, if any, from line 8 of your Capital Loss Carryover Worksheet in the instructions 7 Net short-term capital gain or (loss). Combine lines la through 6 in column (h). If you have any long-term capital gains or losses, go to Part II below. Otherwise, go to Part III on the back Schedule D (Form 1040) 2018 Ken & Amy Booth 343-75-3456 Page 2 Part Summary 16 Combine lines 7 and 15 and enter the result 16 If line 16 is a gain, enter the amount from line 16 on Schedule 1 (Form 1040), line 13, or Form 1040NR, line 14. Then go to line 17 below If line 16 is a loss, skip lines 17 through 20 bellow. Then go to line 21. Also be sure to complete line 22 If line 16 is zero, skip lines 17 through 21 below and enter -0-on Schedule 1 (Form 1040), line 13, or Form 104ONR, line 14. Then go to line 22 17 Are lines 15 and 16 both gains? Y s. Go to line 18. O No. Skip lines 18 through 21, and go to ine 22 18 lf you are required to complete the 28% Rate Gain worksheet (see instructions), enter the amount, if any, from line 7 of that worksheet 18 If you are required to complete the Unrecaptured Section 1250 Gain Worksheet (see instructions), enter the amount, if any, from line 18 of that worksheet 19 20 Are lines 18 and 19 both zero or blank? D Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, line 11a (or in the instructions for Form 1040NR, line 42). Don't complete lines 21 and 22 below. No. Complete the Schedule D Tax worksheet in the instructions. Don't complete lines 21 and 22 below. 21 If line 16 is a loss, enter here and on Schedule 1 (Form 1040), line 13, or Form 1040NR, line 14, the smaller of 21 The loss on line 16; or e ($3,000), or if married filing separately, ($1,500) You must check Box A, B, or C below. Check only one box. If more than one box applies for your short-term transactions, complete a separate Form 8949, page 1, for each applicable box. If you have more short-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need D (A) Short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) D (B) Short-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (C) Short-term transactions not reported to you on Form 1099-B You must check Box A, B, or C below. Check only one box. If more than one box applies for your short-term transactions, complete a separate Form 8949, page 1, for each applicable box. If you have more short-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need D (A) Short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) D (B) Short-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (C) Short-term transactions not reported to you on Form 1099-B Adjustment, if any, to gain or less. If you enter an amount in column (g), Gain or (loss). Cost or other enter a code in column (r). Subtract colurmn Date sold or Dascription of property Date qddisposed of basis. See the sales price) Note below and see Column (e) See the separate instructions. Proceeds (e) from column (d) and combine the result with price Example: 100 sh. XYZ Co.) (Mo., day, yr.) (see (Mo, day, yr)n (n nstructions)in the separate Code(s) from Amount of comn (9) instructions adjustment Non-Business Bad Debt 12/31/18 2 Totals. Add the amounts in columns (d), (e), (g), and (h) (subtract negative amounts), Enter each total here and include on your Schedule D, line 1b (if Box A above is checked), line 2 (if Box B above is checked), or line 3 (if Box C above is checked)