Note: This problem is for the 2017 tax year.

Janice Morgan, age 24, is single and has no dependents. She is a freelance writer. In January 2017, 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. Janice's parents continue to provide health insurance for her under their policy. Janice wants to contribute to the Presidential Election Campaign Fund.

During 2017, 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.

Janice's itemized deductions include:

State income tax	$2,950
Home mortgage interest paid to First National Bank	6,000
Property taxes on home	1,500
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. She made estimated tax payments of $3,000 for 2017.

Required: Compute Janice Morgan's 2017 Federal income tax payable (or refund due).

• Make realistic assumptions about any missing data.
• If an amount box does not require an entry or the answer is zero, enter "0".
• Enter all amounts as positive numbers.
• It may be necessary to complete the other tax forms and schedules before completing Form 1040.
• Use the tax schedules (not the tax tables) included with this problem to compute the tax. When computing the tax liability, do not round your immediate calculations.
• If required, round your final answers to the nearest dollar.

Complete Janice Morgan's Form 1040 for 2017. Form IRS Use Only-Do not Department of the Treasury-Internal Revenue Service (99) write or staple in this 1040 2017 U.S. Individual Income Tax Return space OMB No. 1545-0074 For the year Jan. 1-Dec. 31, 2017, or other tax year beginning ,2017, ending 20 See separate instructions. Your social security Your first name and initial Last name number MORGAN JANICE 123-45-6789 Spouse's social security If a joint return, spouse's first name and initial Last name number Apt. no Make sure the SSN(s) Home address (number and street). If you have a P.O. box, see instructions. above and on line 6c are 132 STONE AVENUE correct. Presidential Election City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see Campaign instructions) Check here if you, or your NM 88135 PLEASANT HILL spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your Foreign province/state /country Foreign postal Foreign country name code tax or refund. You Spouse Filing Single status Yes Yourself. If someone can claim you as a dependent, do not Exemptions 6a Boxes checked check box 6a. .. . 1 on 6a and 6b } No. of children Spouse b No on 6c who: lived with you (4) If child under age 17 c Dependents: did not live lived with you c Dependents: (4) x If child did not live under age 17 (2) Dependent's (3) Dependent's qualifying for with you due to social security divorce or relationship to child tax credit separation (see (see number you (1) First name Last name instructions) instructions) If more than four dependents, Dependents on see instructions 6c not entered and check here above Add numbers on lines above d Total number of exemptions claimed 7 Wages, salaries, tips, etc. Attach Form(s) W-2 . Income 7 Attach 8a Taxable interest. Attach Schedule B if required 8a 4,000 Form(s) W-2 b Tax-exempt interest. Do not include on line 8a here. Also 8b attach 9a Ordinary dividends. Attach Schedule B if required Forms 9a W-2G and 1099-R if b Qualified dividends 9b tax was with held. 10 Taxable refunds, credits, or offsets of state and local income taxes 10 11 Alimony received If you did not 11 get a W-2, see instructions. Business income or (loss). Attach Schedule C or C-EZ 12 12 16,704 X 13 Capital gain or (loss). Attach Schedule D if required. If not required, check here . . . 13 14 Other gains or (losses). Attach Form 4797 14 Taxable amount 15a IRA distributions 15a 15b Taxable amount. . . 16a Pensions and annuities . 16a b 16b 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 17 18 Farm income or (loss). Attach Schedule F 18 19 Unemployment compensation 19 20a Social security benefits . . . . Taxable amount. . . . 20a 20b 20,704 X 21 21 Other income. List type and amount 22 Combine the amounts in the far right column for lines 7 through 21. This is your total 20,704 X income 22 . .. 23 Educator expenses Adjusted 23 Gross 24 Certain business expenses of reservists, performing Income artists, and fee-basis government officials. Attach Form 2106 or 2106-EZ ... 24 0V 25 Health savings account deduction. Attach Form 8889 . . . 25 26 Moving expenses. Attach Form 3903 26 27 Deductible part of self-employment tax. Attach Schedule 1,100X SE 27 28 Self-employed SEP, SIMPLE, and qualified plans. . . . 28 29 Self-employed health insurance deduction . . . 29 Penalty on early withdrawal of savings. 30 30 31a Alimony paid b Recipient's SSN 31a 32 IRA deduction 32 Cdn lans istarsct daduction 33 Student loan interest deduction 33 34 Tuition and fees. Attach Form 8917 34 35 Domestic production activities deduction. Attach Form 35 8903 36 Add lines 23 through 35 1,160 X 36 37 Subtract line 36 from line 22. This is your adjusted gross income 20,263 37 Form 1040 (2017) KIA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2017) JANICE MORGAN 123-45-6789 Page 2 Amount from line 37 (adjusted gross income) 38 Tax and 9,924 X 38 Credits 39a Check You were born before January 2, 1952 O Blind. if: Total boxes } checked 39a Spouse was born before January 2, 1952, Blind b If your spouse itemizes on a separate return or you were a dual-status alien, check here Standard 39b Deduction for- 40 Itemized deductions (from Schedule A) or your standard deduction (see left margin) 10,700 X 40 People who 41 Subtract line 40 from line 38 check any box 41 on line 39a or 39b or who can 42 Exemptions. If line 38 is $156,900 or less, multiply $4,050 by the number on line be claimed as a 6d. Otherwise, see instructions dependent, see 42 instructions. 43 Taxable income. Subtract line 42 from line 41. If line 42 is more than line 41, enter -0- 43 5,774 X All others Tax (see instructions). Check if any from: a o Form(s) 8814 bo Form 4972 c O All others: Tax (see instructions). Check if any from: a o Form(s) 8814 bo Form 4972 co 44 44 Single or Married filing 45 Alternative minimum tax (see instructions). Attach Form 6251 45 separately, $6,350 46 Excess advance premium tax credit repayment. Attach Form 8962 46 Married filing |jointly or 47 Add lines 44, 45, and 46. 47 Qualifying widow(er), 48 Foreign tax credit. Attach Form 1116 if required $12,700 48 Head of 49 Credit for child and dependent care expenses. Attach Form 49 household, $9,350 2441 50 Education credits from Form 8863, line 19. 50 51 Retirement savings contributions credit. Attach Form 8880 51 52 Child tax credit. Attach Schedule 8812, if required 52 53 Residential energy credit. Attach Form 5695 53 54 54 Other credits from Form: a o 3800 b o 8801 C O Add lines 48 through 54. These are your total credits 55 55 56 Subtract line 55 from line 47. If line 55 is more than line 47, enter -0- 56 57 Self-employment tax. Attach Schedule SE Other 57 Taxes 58 Unreported social security and Medicare tax from Form: a 4137 b o 8919 . . . . .. . 58 59 Additional tax on IRAS, other qualified retirement plans, etc. Attach Form 5329 if required 59 60a Household employment taxes from Schedule H 60a b First-time homebuyer credit repayment. Attach Form 5405 if required. 60b 60a Household employment taxes from Schedule H 60a b First-time homebuyer credit repayment. Attach Form 5405 if required 60b Health care: individual responsibility (see instructions) 61 Full-year coverage 61 Taxes from: a o Form 8959 bo Form 8960 co Instructions; enter code(s) 62 62 63 Add lines 56 through 62. This is your total tax 63 64 Federal income tax withheld from Forms W-2 and 1099 . . . . Payments 64 65 2017 estimated tax payments and amount applied from 2016 3,000 65 return If you have a 66a Earned income credit (EIC) 66a qualifying child, attach Schedule EIC Nontaxable combat pay election . . 66b 67 Additional child tax credit. Attach Schedule 8812 67 68 68 American opportunity credit from Form 8863, line 8 69 Net premium tax credit. Attach Form 8962 69 70 Amount paid with request for extension to file 70 Excess social security and tier 1 RRTA tax with held 71 0 71 72 Credit for federal tax on fuels. Attach Form 4136 72 Credits from Form: a o 2439 b o Reserved c 73 73 8885 d 74 74 Add lines 64, 65, 66a, and 67 through 73. These are your total payments . . 75 If line 74 is more than line 63, subtract line 63 from line 74. This is the amount you Refund overpaid 75 . 76a 76a Amount of line 75 you want refunded to you. If Form 8888 is attached, check here Direct deposit? XXX X x XXXX c Type: Checking Savings b Routing number 75 If line 74 is more than line 63, subtract line 63 from line 74. This is the amount you Refund overpaid 75 O76a 76a Amount of line 75 you want refunded to you. If Form 8888 is attached, check here Direct deposit? x| x| x | x c Type:Checking Savings b Routing number See d Account number X XX XXX XXXXXX X XX instructions. Amount of line 75 you want applied to your 2018 77 estimated tax 77 Amount you owe. Subtract line 74 from line 63. For details on how to pay, see 78 Amount 78 instructions You Owe Estimated tax penalty (see instructions) 79 79 Do you want to allow another person to discuss this return with the IRS (see instructions)? o Yes. Complete below. Third No Party Phone Personal identification Designee's Designee number (PIN) name no. Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and Sign to the best of my knowledge and belief, they are true, correct, and accurately list all amounts and sources of income I Here received during the tax year. Declaration of preparer (other than taxpayer) is based on all information of which preparer Joint return? has any knowledge. See Your signature Your occupation Daytime phone number Date instructions. WRITER ep a py for Spouse's occupation If the IRS sent you an Spouse's signature. If a joint return, both your records. Date must sign. Identity Protection PIN, enter it here (see inst.) Preparer's signature CheckD if self- Print/Type preparer's name Paid Date PTIN employed Preparer Firm's EIN Firm's name Use Only Firm's address Phone no. Form 1040 (2017) www.irs.gov/form 1 040 KIA Complete Janice Morgan's Form 1040 for 2017. Form IRS Use Only-Do not Department of the Treasury-Internal Revenue Service (99) write or staple in this 1040 2017 U.S. Individual Income Tax Return space OMB No. 1545-0074 For the year Jan. 1-Dec. 31, 2017, or other tax year beginning ,2017, ending 20 See separate instructions. Your social security Your first name and initial Last name number MORGAN JANICE 123-45-6789 Spouse's social security If a joint return, spouse's first name and initial Last name number Apt. no Make sure the SSN(s) Home address (number and street). If you have a P.O. box, see instructions. above and on line 6c are 132 STONE AVENUE correct. Presidential Election City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see Campaign instructions) Check here if you, or your NM 88135 PLEASANT HILL spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your Foreign province/state /country Foreign postal Foreign country name code tax or refund. You Spouse Filing Single status Yes Yourself. If someone can claim you as a dependent, do not Exemptions 6a Boxes checked check box 6a. .. . 1 on 6a and 6b } No. of children Spouse b No on 6c who: lived with you (4) If child under age 17 c Dependents: did not live lived with you c Dependents: (4) x If child did not live under age 17 (2) Dependent's (3) Dependent's qualifying for with you due to social security divorce or relationship to child tax credit separation (see (see number you (1) First name Last name instructions) instructions) If more than four dependents, Dependents on see instructions 6c not entered and check here above Add numbers on lines above d Total number of exemptions claimed 7 Wages, salaries, tips, etc. Attach Form(s) W-2 . Income 7 Attach 8a Taxable interest. Attach Schedule B if required 8a 4,000 Form(s) W-2 b Tax-exempt interest. Do not include on line 8a here. Also 8b attach 9a Ordinary dividends. Attach Schedule B if required Forms 9a W-2G and 1099-R if b Qualified dividends 9b tax was with held. 10 Taxable refunds, credits, or offsets of state and local income taxes 10 11 Alimony received If you did not 11 get a W-2, see instructions. Business income or (loss). Attach Schedule C or C-EZ 12 12 16,704 X 13 Capital gain or (loss). Attach Schedule D if required. If not required, check here . . . 13 14 Other gains or (losses). Attach Form 4797 14 Taxable amount 15a IRA distributions 15a 15b Taxable amount. . . 16a Pensions and annuities . 16a b 16b 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 17 18 Farm income or (loss). Attach Schedule F 18 19 Unemployment compensation 19 20a Social security benefits . . . . Taxable amount. . . . 20a 20b 20,704 X 21 21 Other income. List type and amount 22 Combine the amounts in the far right column for lines 7 through 21. This is your total 20,704 X income 22 . .. 23 Educator expenses Adjusted 23 Gross 24 Certain business expenses of reservists, performing Income artists, and fee-basis government officials. Attach Form 2106 or 2106-EZ ... 24 0V 25 Health savings account deduction. Attach Form 8889 . . . 25 26 Moving expenses. Attach Form 3903 26 27 Deductible part of self-employment tax. Attach Schedule 1,100X SE 27 28 Self-employed SEP, SIMPLE, and qualified plans. . . . 28 29 Self-employed health insurance deduction . . . 29 Penalty on early withdrawal of savings. 30 30 31a Alimony paid b Recipient's SSN 31a 32 IRA deduction 32 Cdn lans istarsct daduction 33 Student loan interest deduction 33 34 Tuition and fees. Attach Form 8917 34 35 Domestic production activities deduction. Attach Form 35 8903 36 Add lines 23 through 35 1,160 X 36 37 Subtract line 36 from line 22. This is your adjusted gross income 20,263 37 Form 1040 (2017) KIA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2017) JANICE MORGAN 123-45-6789 Page 2 Amount from line 37 (adjusted gross income) 38 Tax and 9,924 X 38 Credits 39a Check You were born before January 2, 1952 O Blind. if: Total boxes } checked 39a Spouse was born before January 2, 1952, Blind b If your spouse itemizes on a separate return or you were a dual-status alien, check here Standard 39b Deduction for- 40 Itemized deductions (from Schedule A) or your standard deduction (see left margin) 10,700 X 40 People who 41 Subtract line 40 from line 38 check any box 41 on line 39a or 39b or who can 42 Exemptions. If line 38 is $156,900 or less, multiply $4,050 by the number on line be claimed as a 6d. Otherwise, see instructions dependent, see 42 instructions. 43 Taxable income. Subtract line 42 from line 41. If line 42 is more than line 41, enter -0- 43 5,774 X All others Tax (see instructions). Check if any from: a o Form(s) 8814 bo Form 4972 c O All others: Tax (see instructions). Check if any from: a o Form(s) 8814 bo Form 4972 co 44 44 Single or Married filing 45 Alternative minimum tax (see instructions). Attach Form 6251 45 separately, $6,350 46 Excess advance premium tax credit repayment. Attach Form 8962 46 Married filing |jointly or 47 Add lines 44, 45, and 46. 47 Qualifying widow(er), 48 Foreign tax credit. Attach Form 1116 if required $12,700 48 Head of 49 Credit for child and dependent care expenses. Attach Form 49 household, $9,350 2441 50 Education credits from Form 8863, line 19. 50 51 Retirement savings contributions credit. Attach Form 8880 51 52 Child tax credit. Attach Schedule 8812, if required 52 53 Residential energy credit. Attach Form 5695 53 54 54 Other credits from Form: a o 3800 b o 8801 C O Add lines 48 through 54. These are your total credits 55 55 56 Subtract line 55 from line 47. If line 55 is more than line 47, enter -0- 56 57 Self-employment tax. Attach Schedule SE Other 57 Taxes 58 Unreported social security and Medicare tax from Form: a 4137 b o 8919 . . . . .. . 58 59 Additional tax on IRAS, other qualified retirement plans, etc. Attach Form 5329 if required 59 60a Household employment taxes from Schedule H 60a b First-time homebuyer credit repayment. Attach Form 5405 if required. 60b 60a Household employment taxes from Schedule H 60a b First-time homebuyer credit repayment. Attach Form 5405 if required 60b Health care: individual responsibility (see instructions) 61 Full-year coverage 61 Taxes from: a o Form 8959 bo Form 8960 co Instructions; enter code(s) 62 62 63 Add lines 56 through 62. This is your total tax 63 64 Federal income tax withheld from Forms W-2 and 1099 . . . . Payments 64 65 2017 estimated tax payments and amount applied from 2016 3,000 65 return If you have a 66a Earned income credit (EIC) 66a qualifying child, attach Schedule EIC Nontaxable combat pay election . . 66b 67 Additional child tax credit. Attach Schedule 8812 67 68 68 American opportunity credit from Form 8863, line 8 69 Net premium tax credit. Attach Form 8962 69 70 Amount paid with request for extension to file 70 Excess social security and tier 1 RRTA tax with held 71 0 71 72 Credit for federal tax on fuels. Attach Form 4136 72 Credits from Form: a o 2439 b o Reserved c 73 73 8885 d 74 74 Add lines 64, 65, 66a, and 67 through 73. These are your total payments . . 75 If line 74 is more than line 63, subtract line 63 from line 74. This is the amount you Refund overpaid 75 . 76a 76a Amount of line 75 you want refunded to you. If Form 8888 is attached, check here Direct deposit? XXX X x XXXX c Type: Checking Savings b Routing number 75 If line 74 is more than line 63, subtract line 63 from line 74. This is the amount you Refund overpaid 75 O76a 76a Amount of line 75 you want refunded to you. If Form 8888 is attached, check here Direct deposit? x| x| x | x c Type:Checking Savings b Routing number See d Account number X XX XXX XXXXXX X XX instructions. Amount of line 75 you want applied to your 2018 77 estimated tax 77 Amount you owe. Subtract line 74 from line 63. For details on how to pay, see 78 Amount 78 instructions You Owe Estimated tax penalty (see instructions) 79 79 Do you want to allow another person to discuss this return with the IRS (see instructions)? o Yes. Complete below. Third No Party Phone Personal identification Designee's Designee number (PIN) name no. Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and Sign to the best of my knowledge and belief, they are true, correct, and accurately list all amounts and sources of income I Here received during the tax year. Declaration of preparer (other than taxpayer) is based on all information of which preparer Joint return? has any knowledge. See Your signature Your occupation Daytime phone number Date instructions. WRITER ep a py for Spouse's occupation If the IRS sent you an Spouse's signature. If a joint return, both your records. Date must sign. Identity Protection PIN, enter it here (see inst.) Preparer's signature CheckD if self- Print/Type preparer's name Paid Date PTIN employed Preparer Firm's EIN Firm's name Use Only Firm's address Phone no. Form 1040 (2017) www.irs.gov/form 1 040 KIA