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Note: This problem is for the 2 0 2 2 tax year. David R . and Ella M . Cole ( ages 3 9 and
Note: This problem is for the tax year. David R and Ella M Cole ages and respectively are husband and wife who live at Elk Avenue, Denver, CO David is a selfemployed consultant specializing in retail management, and Ella is a dental hygienist for a chain of dental clinics. David earned consulting fees of $ in He maintains his own office and pays for all business expenses. The Coles are adequately covered by the medical plan provided by Ellas employer but have chosen not to participate in its k retirement plan. David's employmentrelated expenses for are summarized below. Airfare $ Lodging Meals from restaurants during travel status Entertainment Ground transportation eg limos rental cars, and taxis Business gifts Office supplies includes postage, overnight delivery, and copying The entertainment involved taking clients to sporting and musical events. The business gifts consisted of $ gift certificates to a national restaurant. These were sent by David during the Christmas holidays to of his major clients. During David drove his Ford Expedition miles for business during the first half of and for personal use. He purchased the Expedition on August and has always used the automatic standard mileage method for tax purposes. Parking and tolls relating to business use total $ in When the Coles purchased their present residence in April they devoted of the square feet of living space to an office for David. The property cost $$ of which is attributable to the land and has since appreciated in value. Expenses relating to the residence in except for mortgage interest and property taxes; see below are as follows: Insurance $ Repairs and maintenance Utilities Painting office area; area rugs and plants in the office Treat as a direct office in home expense. In terms of depreciation, the Coles use the MACRS percentage tables applicable to year nonresidential real property. As to depreciable property eg office furniture David tries to avoid capitalization and uses whatever method provides the fastest writeoff for tax purposes. Ella works at a variety of offices as a substitute when a hygienist is ill or on vacation or when one of the clinics is particularly busy eg prior to the beginning of the school year Assume that Ella is an employee not an independent contractor Besides her transportation, she must provide and maintain her own uniforms. Her expenses for appear below. Uniforms $ State and city occupational licenses Professional journals and membership dues in the American Dental Hygiene Association Correspondence study course taken online dealing with teeth whitening procedures Ella's salary for the year is $ and her Form W for the year shows income tax withholdings of $Federal and $state and the proper amount of Social Security and Medicare taxes. Besides the items already mentioned, the Coles had the following receipts during Interest income State of Colorado general purpose bonds $ IBM bonds Wells Fargo Bank $ Federal income tax refund for year Life insurance proceeds paid by Eagle Assurance Corporation Inheritance of savings account from Sarah Cole Sales proceeds from two ATVs For several years, the Coles' household has included David's divorced mother, Sarah, who has been claimed as their dependent. In late December Sarah unexpectedly died of heart attack in her sleep. Unknown to Ella and David, Sarah had a life insurance policy and a savings account with David as the designated beneficiary of each In the Coles purchased two ATVs for $ After several near mishaps, they decided that the sport was too dangerous. In they sold the ATVs to their neighbor. Additional expenditures for include: Funeral expenses for Sarah $ Taxes Real property taxes on personal residence $ Colorado state income tax due paid in April for tax year Mortgage interest on personal residence Rocky Mountain Bank Contributions to traditional IRAs for Ella and David $ $ In the Coles made quarterly estimated tax payments of $Federal and $state for a total of $Federal and $state Relevant Social Security numbers are: David Cole Ella Cole During the year, the Coles purchased $ of bitcoin. They do not want to contribute to the Presidential Election Campaign Fund. Also, the Coles want any overpayment of tax refunded to them and not applied toward next years tax liability.
Note: This problem is for the tax year.
David R and Ella M Cole ages and respectively are husband and wife who live at Elk Avenue, Denver, CO David is a selfemployed consultant specializing in retail management, and Ella is a dental hygienist for a chain of dental clinics.
David earned consulting fees of $ in He maintains his own office and pays for all business expenses. The Coles are adequately covered by the medical plan provided by Ellas employer but have chosen not to participate in its k retirement plan.
David's employmentrelated expenses for are summarized below.
Airfare $
Lodging
Meals from restaurants during travel status
Entertainment
Ground transportation eg limos rental cars, and taxis
Business gifts
Office supplies includes postage, overnight delivery, and copying
The entertainment involved taking clients to sporting and musical events. The business gifts consisted of $ gift certificates to a national restaurant. These were sent by David during the Christmas holidays to of his major clients.
During David drove his Ford Expedition miles for business during the first half of and for personal use. He purchased the Expedition on August and has always used the automatic standard mileage method for tax purposes. Parking and tolls relating to business use total $ in
When the Coles purchased their present residence in April they devoted of the square feet of living space to an office for David. The property cost $$ of which is attributable to the land and has since appreciated in value. Expenses relating to the residence in except for mortgage interest and property taxes; see below are as follows:
Insurance $
Repairs and maintenance
Utilities
Painting office area; area rugs and plants in the office
Treat as a direct office in home expense.
In terms of depreciation, the Coles use the MACRS percentage tables applicable to year nonresidential real property. As to depreciable property eg office furniture David tries to avoid capitalization and uses whatever method provides the fastest writeoff for tax purposes.
Ella works at a variety of offices as a substitute when a hygienist is ill or on vacation or when one of the clinics is particularly busy eg prior to the beginning of the school year Assume that Ella is an employee not an independent contractor Besides her transportation, she must provide and maintain her own uniforms. Her expenses for appear below.
Uniforms $
State and city occupational licenses
Professional journals and membership dues in the American Dental
Hygiene Association
Correspondence study course taken online dealing with teeth
whitening procedures
Ella's salary for the year is $ and her Form W for the year shows income tax withholdings of $Federal and $state and the proper amount of Social Security and Medicare taxes.
Besides the items already mentioned, the Coles had the following receipts during
Interest income
State of Colorado general purpose bonds $
IBM bonds
Wells Fargo Bank $
Federal income tax refund for year
Life insurance proceeds paid by Eagle Assurance
Corporation
Inheritance of savings account from Sarah Cole
Sales proceeds from two ATVs
For several years, the Coles' household has included David's divorced mother, Sarah, who has been claimed as their dependent. In late December Sarah unexpectedly died of heart attack in her sleep. Unknown to Ella and David, Sarah had a life insurance policy and a savings account with David as the designated beneficiary of each In the Coles purchased two ATVs for $ After several near mishaps, they decided that the sport was too dangerous. In they sold the ATVs to their neighbor.
Additional expenditures for include:
Funeral expenses for Sarah $
Taxes
Real property taxes on personal residence $
Colorado state income tax due paid in April
for tax year
Mortgage interest on personal residence Rocky Mountain Bank
Contributions to traditional IRAs for Ella and David
$ $
In the Coles made quarterly estimated tax payments of $Federal and $state for a total of $Federal and $state
Relevant Social Security numbers are:
David Cole
Ella Cole
During the year, the Coles purchased $ of bitcoin. They do not want to contribute to the Presidential Election Campaign Fund. Also, the Coles want any overpayment of tax refunded to them and not applied toward next years tax liability.
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