Note This problem is for the 2018 tax year Janice Morgan, age 24, is single and has no dependents She is a freelance writer In January 2018, 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 2018, 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 Janices itemized deductions include State income tax $2,950 Home mortgage interest paid to First National Bank 6,000 Property taxes on home 2,500 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 2018 Required Compute Janice Morgans 2018 Federal income tax payable (or refund due) by providing the following information that would be reported on Form 1040 and Schedules A, B, C, and SE Make realistic assumptions about any missing data If an amount is zero, enter 0 Enter all amounts as positive numbers When computing the tax liability, do not round your immediate calculations If required, round your final answers to the nearest dollar 1 Calculate the interest amount $ 2 Calculate total expenses $ 3 Calculate net profit or loss $ ( Net profit) 4 Calculate the total deprecation for the furniture and fixtures $ 5 Calculate the total depreciation for the computer equipment $ 6 Calculate the self employment liability $ 7 Calculate the eduction for self employment tax $

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 30, 2024

Note: This problem is for the 2018 tax year. Janice Morgan, age 24, is single and has no dependents. She is a freelance writer. In

Note: This problem is for the 2018 tax year.

Janice Morgan, age 24, is single and has no dependents. She is a freelance writer. In January 2018, 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 2018, 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.

Janices itemized deductions include:

State income tax	$2,950
Home mortgage interest paid to First National Bank	6,000
Property taxes on home	2,500
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 2018.

Required: Compute Janice Morgans 2018 Federal income tax payable (or refund due) by providing the following information that would be reported on Form 1040 and Schedules A, B, C, and SE.

Make realistic assumptions about any missing data.

If an amount is zero, enter "0".

Enter all amounts as positive numbers.

When computing the tax liability, do not round your immediate calculations.

If required, round your final answers to the nearest dollar.

1. Calculate the interest amount: $

2. Calculate total expenses: $

3. Calculate net profit or loss $ (Net profit)

4. Calculate the total deprecation for the furniture and fixtures:

5. Calculate the total depreciation for the computer equipment. $

6. Calculate the self-employment liability: $

7. Calculate the eduction for self-employment tax: $