Nate and Ruth Fischer are married and file a joint return. They have three dependent children under the age of 15. None of their children work. The Fischers 2020 financial information follows:

Nates Salary $288,000

Ruths Salary $335,000

Interest from Plains National Bank $18,500

Interest from U.S. Treasury Bonds $12,500

Interest from state of California bonds $10,250

Dividends from Microsoft $13,000

Long term capital gain $34,000

Short term capital gain $18,000

Gambling winnings - lottery $20,000

Annuity payments received (Inv: $40,000, return $100,000) $40,000

Life Insurance Proceeds $450,000

Inheritance from Grandmother $750,000

Gift from family $420,000

Legitimate out of pocket medical expenses $72,000

Contributions to a Roth IRA $9,000

Mortgage interest ($1,250,000 principal) $78,000 (home acquired in 2018)

Real estate taxes (on value of homes) $19,800

Charitable contributions $32,000

Investment interest expense $69,000

K-1 Ordinary Income Ruth (LLC) $75,000- Eligible for QBI

K-1 Ordinary Loss - Nate (Partnership) ($35,000)- Eligible for QBI

K-1 Ruth S Corporation (Ordinary Income) $30,000 - Eligible for QBI

Federal Income Taxes withheld / paid during year 2020 $220,000

Sole Proprietorship for Nate- (Eligible for QBI)

Revenue $950,000

Salaries paid to his staff $172,000

Self Employed Medical Insurance $13,000 (be careful where you deduct these)

SEP Payments $46,000 (be careful where you deduct these)

Office expenses $19,500

Travel $19,000

Legal and professional fees $17,750

Rent expense $22,400

Business meals $16,400

Country club memberships $8,000

Payroll tax expense $17,250

Business gifts ($100 per gift to 8 customers) $800

Penalties and fines payable to State of Texas $6,500

Withdrawals by the business owner of cash $65,000 (these are owners draws)

Requirements

1. Calculate the 2020 net profit from Nates Schedule C.
2. Calculate the total 2020 self-employment tax for the Fischers
3. Calculate 2020 Gross Income and Adjusted Gross Income.
4. Calculate 2020 Itemized Deductions
5. Calculate the 2020 Qualified Business Income Deduction
6. Calculate the Fischers tax liability (including Self Employment taxes, Net Investment Income Taxes, and additional Medicare tax) and tax due/refund
7. Using IRS fill in forms, Prepare the following 2020 tax return forms for the Fischers. Please include Forms 1040 with schedules 1-4 along with schedules A, B, C, D, E (page 2), SE-Long, Forms 4952, 8959, 8960. Be sure to order the forms properly and combine them into one PDF file for submission.

Please note you will submit two files for this assignment: 1) the Excel file for the case, and 2) A combined PDF file that includes all the aforementioned tax forms.