Note: This problem is for the 2019 tax year.

Jane Smith, age 40, is single and has no dependents. She is employed as a legal secretary by Legal Services, Inc. She owns and operates Typing Services located near the campus of Florida Atlantic University at 1986 Campus Drive, Boca Raton, FL 33434. Jane is a material participant in the business. She is a cash basis taxpayer. Jane lives at 2020 Oakcrest Road, Boca Raton, FL 33431. Jane's Social Security number is 123-45-6781. Jane indicates that she wants to designate $3 to the Presidential Election Campaign Fund. Jane has never owned or used any virtual currency. During 2019, Jane had the following income and expense items:

a.

$100,000 salary from Legal Services, Inc.

b.

$20,000 gross receipts from her typing services business.

c.

$700 interest income from Third National Bank.

d.

$1,000 Christmas bonus from Legal Services, Inc.

e.

$60,000 life insurance proceeds on the death of her sister.

f.

$5,000 check given to her by her wealthy aunt.

g.

$100 won in a bingo game.

h.

Expenses connected with the typing service:

Office rent	$7,000
Supplies	4,400
Utilities and telephone	4,680
Wages to part-time typists	5,000
Payroll taxes	500
Equipment rentals	3,000

i.

$9,500 interest expense on a home mortgage (paid to San Jose Savings and Loan).

j.

$15,000 fair market value of silverware stolen from her home by a burglar on October 12, 2019. Jane had paid $14,000 for the silverware on July 1, 2009. She was reimbursed $10,000 by her insurance company.

k.

Jane had loaned $2,100 to a friend, Joan Jensen, on June 3, 2015. Joan declared bankruptcy on August 14, 2019, and was unable to repay the loan. Assume that the loan is a bona fide debt.

l.

Legal Services, Inc., withheld Federal income tax of $15,000 and the appropriate amount of FICA tax from her wages.

m.

Alimony of $10,000 received from her former husband, Ted Smith; divorce was finalized on December 2, 2013, and no changes have been made to the divorce decree since that time.

n.

Interest income of $800 on City of Boca Raton bonds.

o.

Jane made estimated Federal tax payments of $2,000.

p.

Sales taxes from the sales tax table of $953.

q.

Property taxes on her residence of $3,200.

r.

Charitable contribution of $2,500 to her alma mater, Citrus State College.

s.

On November 1, 2019, Jane was involved in an automobile accident. At the time of the accident, Jane's automobile had an FMV of $45,000. After the accident, the automobile's FMV was $38,000. Jane acquired the car at a cost of $52,000. Jane's car was covered by insurance, but because the policy had a $5,000 deduction clause, Jane decided not to file a claim for the damage.

Required:

Compute Jane Smith's 2019 Federal income tax payable (or refund due). Use Form 1040, Schedule 1, Schedule 5, Schedule A, Schedule C, Schedule D and Form 8949.

• 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. However, unless instructed otherwise, use the minus sign to indicate a loss.
• It may be necessary to complete the tax schedules before completing Form 1040.
• Use the tax rate schedules provided (do not use the tax tables). When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar.

1040

Schedule 1

Schedule 3

Schedule A

Schedule C

Form Department of the Treasury-Internal Revenue Service (99) dropdown ) U.S. Individual Income Tax Return 2019 OMB No. 1545-0074 IRS Use Only Filing Status Last name Your first name and middle initial Jane Smith Your social security number 123-45-6781 If joint return, spouse's first name and middle initial Last name Spouse's social security number Apt. no. Home address (number and street). If you have a P.O. box, see instructions. 2020 Oakcrest Road City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). Boca Raton, FL 33434 Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. Foreign country name Foreign province/state/county Foreign postal code If more than four dependents, see instructions and here Standard Deduction Someone can claim: Age/Blindness You: : Spouse: Dependents (see instructions): (2) Social security number (3) Relationship to you (4) if qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependents 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 b Taxable interest. Attach Sch. B 2a Tax-exempt interest .. 2a if required 2b b 3a Qualified dividends ... Ordinary dividends. Attach Sch. B if required 3b 4a 4b 4a IRA distributions ..... C Pensions and annuities 4c b Taxable amount. d Taxable amount b Taxable amount ... 4d Standard Deduction for- Single or Married filing separately, $12,200 Married filing jointly or Qualifying widow(er), $24,400 Head of household, 5a 5a Social security benefits 5b 6 Capital gain or loss). Attach Schedule D if required. If not required, check here 6 za Other income from Schedule 1, line 9 7a b Add lines 1, 2b, 3b, 4b, 40, 56, 6, and 7a. This is your total income 7b 8a Adjustments to income from Schedule 1, line 22 8a b Subtract line 8a from line 7b. This is your adjusted gross income 8b $18,350 If you checked any box under Standard Deduction, see instructions. 9 9 Standard deduction or itemized deductions (from Schedule A) ...... Qualified business income deduction. Attach Form 8995 or Form 8995-A.... 10 10 11a Add lines 9 and 10 11a b Taxable income. Subtract line 11a from line 8b. If zero or less, enter-O- 11b BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2019) Form 1040 (2019) Jane Smith 123-45-6781 Page 2 12a Tax (see inst.) Check if any from Form(s): 1 8814 2 4972 30 12a b Add Schedule 2, line 3, and line 12a and enter the total 12b 13a Child tax credit or credit for other dependents 13a b Add Schedule 3, line 7, and line 13a and enter the total 13b 14 Subtract line 13b from line 12b. If zero or less, enter-O- 14 15 Other taxes, including self-employment tax, from Schedule 2, line 10 15 16 Add lines 14 and 15. This is your total tax 16 17 Federal income tax withheld from Forms W-2 and 1099 17 18 Other payments and refundable credits: a Earned income credit (EIC) 18a If you have a qualifying child, attach Sch. EIC. If you have nontaxable combat pay, see instructions. b Additional child tax credit. Attach Schedule 8812. 18b c American opportunity credit from Form 8863, line 8 18c d Schedule 3, line 14 .. 18d e Add lines 18a through 18d. These are your total other payments and refundable credits .. 18e 19 Add lines 17 and 18e. These are your total payments 19 20 Refund If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid .. 20 21a 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here Routing number c Type: Checking Savings Direct deposit? See instructions. d Account number 22 Amount of line 20 you want applied to your 2020 estimated tax 22 2a Alimony received 2a b Date of original divorce or separation agreement (see instructions) 12/2013 3 Business income or loss). Attach Schedule C. 3 4 Other gains or (losses). Attach Form 4797 4 5 5 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or loss). Attach Schedule F 6 6 7 Unemployment compensation ... 7 7 8 Other income. List type and amount 8 9 Combine lines 1 through 8. Enter here and on Form 1040 or 1040-SR, line 7a . 9 Part II Adjustments to Income 10 Educator expenses 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 12 Health savings account deduction. Attach Form 8889 12 13 Moving expenses for members of the Armed Forces. Attach Form 3903 13 14 Deductible part of self-employment tax. Attach Schedule SE 14 15 Self-employed SEP, SIMPLE, and qualified plans 15 16 Self-employed health insurance deduction. 16 17 Penalty on early withdrawal of savings. 17 18a 18a Alimony paid. b Recipient's SSN.. c Date of original divorce or separation agreement (see instructions) 19 IRA deduction 19 20 Student loan interest deduction 20 21 Tuition and fees. Attach Form 8917 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040 or 1040-SR, line 8a ......... 22 BAA For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 1 (Form 1040 or 1040-SR) 2019 Complete Jane Smith's Schedule 3. SCHEDULE 3 OMB No. 1545-0074 (Form 1040 or 1040-SR) Additional Credits and Payments 2019 Department of the Treasury Attach to Form 1040 or 1040-SR. Attachment Internal Revenue Service Go to www.irs.gov/Form1040 for instructions and the latest information. Sequence No. 03 Name(s) shown on Form 1040 or 1040-SR Your social security number Jane Smith 123-45-6781 Part I Nonrefundable Credits 1 Foreign tax credit. Attach Form 1116 if required. 2 Credit for child and dependent care expenses. Attach Form 2441 . 3 Education credits from Form 8863, line 19 4 Retirement savings contributions credit. Attach Form 8880 .. 5 Residential energy credit. Attach Form 5695. 6 Other credits from Form: a = 3800 b 8801 co 7 Add lines 1 through 6. Enter here and include on Form 1040 or 1040-SR, line 13 7 Part II Other Payments and Refundable Credits 1 N 3 4 5 6 8 2019 estimated tax payments and amount applied from 2018 return 8 9 10 9 Net premium tax credit. Attach Form 8962. 10 Amount paid with request for extension to file (see instructions). 11 Excess social security and tier 1 RRTA tax withheld . 12 Credit for federal tax on fuels. Attach Form 4136.. 13 Credits from Form: a 2439 b Reserved CO 8885 do 11 12 13 14 Add lines 8 through 13. Enter here and on Form 1040 or 1040-SR, line 18d 14 BAA For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 3 (Form 1040 or 1040-SR) 2019 Complete Jane Smith's Schedule A for 2019. OMB No. 1545-0074 SCHEDULE A (Form 1040 or 1040-SR) (Rev. January 2020) Department of the Treasury Internal Revenue Service (99) Itemized Deductions Go to www.irs.gov/ScheduleA for instructions and the latest information. Attach to Form 1040 or 1040-SR. Caution: If you are claiming a net qualified disaster loss on Form 4684, see the instructions for line 16. 2019 Attachment Sequence No. 07 Name(s) shown on Form 1040 or 1040-SR Jane Smith Your social security number 123-45-6781 Caution: Do not include expenses reimbursed or paid by others. 1 Medical and dental expenses (see instructions) 1 Medical and Dental Expenses 2 Enter amount from Form 1040 or 1040- SR, line 8b.. 2 3 Multiply line 2 by 7.5% (0.075) 3 4 Subtract line 3 from line 1. If line 3 is more than line 1, enter -0- 4 5 State and local taxes. Taxes You Paid a State and local income taxes or general sales taxes. You may include either income taxes or general sales taxes on line 5a, but not both. If you elect to include general sales taxes instead of income taxes, check this box. X 5a b State and local real estate taxes (see instructions) 5b c State and local personal property taxes 5c d Add lines 5a through 5c ... 5d e Enter the smaller of line 5d or $10,000 ($5,000 if married filing separately) 5e 6 Other taxes. List type and amount 6 7 Add lines 5e and 6.. 7 Interest You Paid 8 Home mortgage interest and points. If you didn't use all of your home mortgage loan(s) to buy, build, or improve your home, see instructions and check this box. a Home mortgage interest and points reported to you on Form 1098. See instructions if limited 8a Caution: Your mortgage interest deduction may be limited (see instructions) b Home mortgage interest not reported to you on Form 1098. See instructions if limited. If paid to the person from whom you bought the home, see instructions and show that person's name, identifying no., and address 8b Investment interest. Attach Form 4952 if required. See instructions. 10 Add lines 8e and 9 10 Gifts to Charity 11 11 Gifts by cash or check. If you made any gift of $250 or more, see instructions .. 12 Other than by cash or check. If you made any gift of $250 or more, see instructions. You must attach Form 8283 if over $500.... 13 Carryover from prior year 12 13 Caution: If you made a gift and got a benefit for it, see instructions. Casualty and Theft Losses 14 Add lines 11 through 13 14 15 Casualty and theft loss(es) from a federally declared disaster (other than net qualified disaster losses). Attach Form 4684 and enter the amount from line 18 of that form. See instructions. 16 Other-from list in instructions. List type and amount 15 Other Itemized Deductions 16 li 17 Total 17 Add the amounts in the far right column for lines 4 through 16. Also, enter this amount on Form 1040 or 1040-SR, line 9.. Itemized 18 If you elect to itemize deductions even though they are less than your standard deduction, Deductions check this box.... BAA For Paperwork Reduction Act Notice, see the Instructions Schedule A (Form 1040 or 1040-SR) 2019 for Forms 1040 and 1040-SR. Part I Income 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 1 2 Returns and allowances 2 3 Subtract line 2 from line 1.... 3 4 Cost of goods sold (from line 42). 4 5 Gross profit. Subtract line 4 from line 3 5 6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions). 6 7 Gross income. Add lines 5 and 6 7 Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising 8 18 Office expense (see instructions)... 9 Car and truck expenses (see 19 Pension and profit-sharing plans. 18 19 instructions) 9 20 Rent or lease (see instructions): . 10 Commissions and fees ..... 10 a Vehicles, machinery, and equipment 20a 11 Contract labor (see instructions) 11 b Other business property.... 20b 12 Depletion .. 12 21 Repairs and maintenance 21 13 Depreciation and section 179 22 Supplies (not included in Part III) ... 22 expense deduction (not included 23 Taxes and licenses. 23 in Part III) (see instructions) ... 13 24 Travel and meals: 14 Employee benefit programs 24a a Travel .... b Deductible meals (see 14 (other than on line 19).... 15 Insurance (other than health).. 15 instructions) 24b 16 Interest (see instr.): 25 Utilities .. 25 a Mortgage (paid to banks, etc.) 16a 26 Wages (less employment credits).. 26 b Other .. 16b 27a Other expenses (from line 48)..... 27a 17 Legal and professional services 17 b Reserved for future use.. 27b 28 Total expenses before expenses for business use of home. Add lines 8 through 27a .... 28 29 Tentative profit or loss). Subtract line 28 from line 7. 29 30 Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method (see instructions). Simplified method filers only: enter the total square footage of: (a) your home: and (b) the part of your home used for business: Use the Simplified Method Worksheet in the instructions to figure Form Department of the Treasury-Internal Revenue Service (99) dropdown ) U.S. Individual Income Tax Return 2019 OMB No. 1545-0074 IRS Use Only Filing Status Last name Your first name and middle initial Jane Smith Your social security number 123-45-6781 If joint return, spouse's first name and middle initial Last name Spouse's social security number Apt. no. Home address (number and street). If you have a P.O. box, see instructions. 2020 Oakcrest Road City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). Boca Raton, FL 33434 Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. Foreign country name Foreign province/state/county Foreign postal code If more than four dependents, see instructions and here Standard Deduction Someone can claim: Age/Blindness You: : Spouse: Dependents (see instructions): (2) Social security number (3) Relationship to you (4) if qualifies for (see instructions): (1) First name Last name Child tax credit Credit for other dependents 1 Wages, salaries, tips, etc. Attach Form(s) W-2 1 b Taxable interest. Attach Sch. B 2a Tax-exempt interest .. 2a if required 2b b 3a Qualified dividends ... Ordinary dividends. Attach Sch. B if required 3b 4a 4b 4a IRA distributions ..... C Pensions and annuities 4c b Taxable amount. d Taxable amount b Taxable amount ... 4d Standard Deduction for- Single or Married filing separately, $12,200 Married filing jointly or Qualifying widow(er), $24,400 Head of household, 5a 5a Social security benefits 5b 6 Capital gain or loss). Attach Schedule D if required. If not required, check here 6 za Other income from Schedule 1, line 9 7a b Add lines 1, 2b, 3b, 4b, 40, 56, 6, and 7a. This is your total income 7b 8a Adjustments to income from Schedule 1, line 22 8a b Subtract line 8a from line 7b. This is your adjusted gross income 8b $18,350 If you checked any box under Standard Deduction, see instructions. 9 9 Standard deduction or itemized deductions (from Schedule A) ...... Qualified business income deduction. Attach Form 8995 or Form 8995-A.... 10 10 11a Add lines 9 and 10 11a b Taxable income. Subtract line 11a from line 8b. If zero or less, enter-O- 11b BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2019) Form 1040 (2019) Jane Smith 123-45-6781 Page 2 12a Tax (see inst.) Check if any from Form(s): 1 8814 2 4972 30 12a b Add Schedule 2, line 3, and line 12a and enter the total 12b 13a Child tax credit or credit for other dependents 13a b Add Schedule 3, line 7, and line 13a and enter the total 13b 14 Subtract line 13b from line 12b. If zero or less, enter-O- 14 15 Other taxes, including self-employment tax, from Schedule 2, line 10 15 16 Add lines 14 and 15. This is your total tax 16 17 Federal income tax withheld from Forms W-2 and 1099 17 18 Other payments and refundable credits: a Earned income credit (EIC) 18a If you have a qualifying child, attach Sch. EIC. If you have nontaxable combat pay, see instructions. b Additional child tax credit. Attach Schedule 8812. 18b c American opportunity credit from Form 8863, line 8 18c d Schedule 3, line 14 .. 18d e Add lines 18a through 18d. These are your total other payments and refundable credits .. 18e 19 Add lines 17 and 18e. These are your total payments 19 20 Refund If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid .. 20 21a 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here Routing number c Type: Checking Savings Direct deposit? See instructions. d Account number 22 Amount of line 20 you want applied to your 2020 estimated tax 22 2a Alimony received 2a b Date of original divorce or separation agreement (see instructions) 12/2013 3 Business income or loss). Attach Schedule C. 3 4 Other gains or (losses). Attach Form 4797 4 5 5 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E Farm income or loss). Attach Schedule F 6 6 7 Unemployment compensation ... 7 7 8 Other income. List type and amount 8 9 Combine lines 1 through 8. Enter here and on Form 1040 or 1040-SR, line 7a . 9 Part II Adjustments to Income 10 Educator expenses 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 12 Health savings account deduction. Attach Form 8889 12 13 Moving expenses for members of the Armed Forces. Attach Form 3903 13 14 Deductible part of self-employment tax. Attach Schedule SE 14 15 Self-employed SEP, SIMPLE, and qualified plans 15 16 Self-employed health insurance deduction. 16 17 Penalty on early withdrawal of savings. 17 18a 18a Alimony paid. b Recipient's SSN.. c Date of original divorce or separation agreement (see instructions) 19 IRA deduction 19 20 Student loan interest deduction 20 21 Tuition and fees. Attach Form 8917 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040 or 1040-SR, line 8a ......... 22 BAA For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 1 (Form 1040 or 1040-SR) 2019 Complete Jane Smith's Schedule 3. SCHEDULE 3 OMB No. 1545-0074 (Form 1040 or 1040-SR) Additional Credits and Payments 2019 Department of the Treasury Attach to Form 1040 or 1040-SR. Attachment Internal Revenue Service Go to www.irs.gov/Form1040 for instructions and the latest information. Sequence No. 03 Name(s) shown on Form 1040 or 1040-SR Your social security number Jane Smith 123-45-6781 Part I Nonrefundable Credits 1 Foreign tax credit. Attach Form 1116 if required. 2 Credit for child and dependent care expenses. Attach Form 2441 . 3 Education credits from Form 8863, line 19 4 Retirement savings contributions credit. Attach Form 8880 .. 5 Residential energy credit. Attach Form 5695. 6 Other credits from Form: a = 3800 b 8801 co 7 Add lines 1 through 6. Enter here and include on Form 1040 or 1040-SR, line 13 7 Part II Other Payments and Refundable Credits 1 N 3 4 5 6 8 2019 estimated tax payments and amount applied from 2018 return 8 9 10 9 Net premium tax credit. Attach Form 8962. 10 Amount paid with request for extension to file (see instructions). 11 Excess social security and tier 1 RRTA tax withheld . 12 Credit for federal tax on fuels. Attach Form 4136.. 13 Credits from Form: a 2439 b Reserved CO 8885 do 11 12 13 14 Add lines 8 through 13. Enter here and on Form 1040 or 1040-SR, line 18d 14 BAA For Paperwork Reduction Act Notice, see your tax return instructions. Schedule 3 (Form 1040 or 1040-SR) 2019 Complete Jane Smith's Schedule A for 2019. OMB No. 1545-0074 SCHEDULE A (Form 1040 or 1040-SR) (Rev. January 2020) Department of the Treasury Internal Revenue Service (99) Itemized Deductions Go to www.irs.gov/ScheduleA for instructions and the latest information. Attach to Form 1040 or 1040-SR. Caution: If you are claiming a net qualified disaster loss on Form 4684, see the instructions for line 16. 2019 Attachment Sequence No. 07 Name(s) shown on Form 1040 or 1040-SR Jane Smith Your social security number 123-45-6781 Caution: Do not include expenses reimbursed or paid by others. 1 Medical and dental expenses (see instructions) 1 Medical and Dental Expenses 2 Enter amount from Form 1040 or 1040- SR, line 8b.. 2 3 Multiply line 2 by 7.5% (0.075) 3 4 Subtract line 3 from line 1. If line 3 is more than line 1, enter -0- 4 5 State and local taxes. Taxes You Paid a State and local income taxes or general sales taxes. You may include either income taxes or general sales taxes on line 5a, but not both. If you elect to include general sales taxes instead of income taxes, check this box. X 5a b State and local real estate taxes (see instructions) 5b c State and local personal property taxes 5c d Add lines 5a through 5c ... 5d e Enter the smaller of line 5d or $10,000 ($5,000 if married filing separately) 5e 6 Other taxes. List type and amount 6 7 Add lines 5e and 6.. 7 Interest You Paid 8 Home mortgage interest and points. If you didn't use all of your home mortgage loan(s) to buy, build, or improve your home, see instructions and check this box. a Home mortgage interest and points reported to you on Form 1098. See instructions if limited 8a Caution: Your mortgage interest deduction may be limited (see instructions) b Home mortgage interest not reported to you on Form 1098. See instructions if limited. If paid to the person from whom you bought the home, see instructions and show that person's name, identifying no., and address 8b Investment interest. Attach Form 4952 if required. See instructions. 10 Add lines 8e and 9 10 Gifts to Charity 11 11 Gifts by cash or check. If you made any gift of $250 or more, see instructions .. 12 Other than by cash or check. If you made any gift of $250 or more, see instructions. You must attach Form 8283 if over $500.... 13 Carryover from prior year 12 13 Caution: If you made a gift and got a benefit for it, see instructions. Casualty and Theft Losses 14 Add lines 11 through 13 14 15 Casualty and theft loss(es) from a federally declared disaster (other than net qualified disaster losses). Attach Form 4684 and enter the amount from line 18 of that form. See instructions. 16 Other-from list in instructions. List type and amount 15 Other Itemized Deductions 16 li 17 Total 17 Add the amounts in the far right column for lines 4 through 16. Also, enter this amount on Form 1040 or 1040-SR, line 9.. Itemized 18 If you elect to itemize deductions even though they are less than your standard deduction, Deductions check this box.... BAA For Paperwork Reduction Act Notice, see the Instructions Schedule A (Form 1040 or 1040-SR) 2019 for Forms 1040 and 1040-SR. Part I Income 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 1 2 Returns and allowances 2 3 Subtract line 2 from line 1.... 3 4 Cost of goods sold (from line 42). 4 5 Gross profit. Subtract line 4 from line 3 5 6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions). 6 7 Gross income. Add lines 5 and 6 7 Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising 8 18 Office expense (see instructions)... 9 Car and truck expenses (see 19 Pension and profit-sharing plans. 18 19 instructions) 9 20 Rent or lease (see instructions): . 10 Commissions and fees ..... 10 a Vehicles, machinery, and equipment 20a 11 Contract labor (see instructions) 11 b Other business property.... 20b 12 Depletion .. 12 21 Repairs and maintenance 21 13 Depreciation and section 179 22 Supplies (not included in Part III) ... 22 expense deduction (not included 23 Taxes and licenses. 23 in Part III) (see instructions) ... 13 24 Travel and meals: 14 Employee benefit programs 24a a Travel .... b Deductible meals (see 14 (other than on line 19).... 15 Insurance (other than health).. 15 instructions) 24b 16 Interest (see instr.): 25 Utilities .. 25 a Mortgage (paid to banks, etc.) 16a 26 Wages (less employment credits).. 26 b Other .. 16b 27a Other expenses (from line 48)..... 27a 17 Legal and professional services 17 b Reserved for future use.. 27b 28 Total expenses before expenses for business use of home. Add lines 8 through 27a .... 28 29 Tentative profit or loss). Subtract line 28 from line 7. 29 30 Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method (see instructions). Simplified method filers only: enter the total square footage of: (a) your home: and (b) the part of your home used for business: Use the Simplified Method Worksheet in the instructions to figure