Note: This problem is for the 2021 tax year.

Janice Morgan, age 24, is single and has no dependents. She is a freelance writer. In January 2021, 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 123-45-6782. Janice's parents continue to provide health insurance for her under their policy. Janice did not engage in any virtual currency transactions during the year and wants to contribute to the Presidential Election Campaign Fund. Janice received the appropriate coronavirus recovery rebates (economic impact payments); related questions in ProConnect Tax should be ignored.

During 2021, Janice reported the following income and expense items connected with her business.

Income from sale of articles	$95,000
Rent	16,500
Utilities	7,900
Supplies	1,800
Insurance	5,000
Travel (including restaurant meals of $600)	2,900

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	8,000
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 allowed by 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 $5,000 for 2021.

Required: Compute Janice Morgan's 2021 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.
• The taxpayer wants $3 to go to the to Presidential Election Campaign.
• 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.
• If required, round your final answers to the nearest dollar.

Form 1040

Question Content Area

Complete Janice Morgan's Form 1040 for 2021.

Form 1040 (2021)

Janice Morgan

123-45-6782

Page 2

	16	Tax (see instructions). Check if any from Form(s): 1 8814 2 4972 3 . .					16	fill in the blank 20036ffd104207d_17
	17	Amount from Schedule 2, line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .					17
	18	Add lines 16 and 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .					18	fill in the blank 20036ffd104207d_18
	19	Nonrefundable child tax credit or credit for other dependents from Schedule 8812 . . . .					19
	20	Amount from Schedule 3, line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .					20
	21	Add lines 19 and 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .					21	fill in the blank 20036ffd104207d_19
	22	Subtract line 21 from line 18. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . .					22	fill in the blank 20036ffd104207d_20
	23	Other taxes, including self-employment tax, from Schedule 2, line 21 . . . . . . . . . . . . . .					23	fill in the blank 20036ffd104207d_21
	24	Add lines 22 and 23. This is your total tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .					24	fill in the blank 20036ffd104207d_22
	25	Federal income tax withheld from: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
	a	Form(s) W-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			25a
	b	Form(s) 1099 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			25b
	c	Other forms (see instructions) . . . . . . . . . . . . . . . . . . . . . .			25c
	d	Add lines 25a through 25c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .					25d
If you have a qualifying child, attach Sch. EIC.	26	2021 estimated tax payments and amount applied from 2020 return . . . . . . . . . . . . . .					26	fill in the blank 20036ffd104207d_23
	27a	Earned income credit (EIC) . . . . . . . . . . . . . . . . . . . . . . . . .			27a
		Check here if you were born after January 1, 1998, and before January 2, 2004, and you satisfy all the other requirements for taxpayers who are at least age 18, to claim the EIC. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
	b	Nontaxable combat pay election . .	27b
	c	Prior year (2019) earned income . .	27c
	28	Refundable child tax credit or additional child tax credit from Schedule 8812 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			28
	29	American opportunity credit from Form 8863, line 8 . . . . . . . .			29
	30	Recovery rebate credit. See instructions . . . . . . . . . . . . . . . .			30
	31	Amount from Schedule 3, line 15 . . . . . . . . . . . . . . . . . . . . .			31
	32	Add lines 27a and 28 through 31. These are your total other payments and refundable credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .					32
	33	Add lines 25d, 26, and 32. These are your total payments . . . . . . . . . . . . . . . . . . .					33	fill in the blank 20036ffd104207d_24

Refund

34

If line 33 is more than line 24, subtract line 24 from line 33. This is the amount you overpaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34

35a

Amount of line 34 you want refunded to you. If Form 8888 is attached, check here

35a

Direct deposit?

b

Routing number

c Type: Checking Savings

See instructions.

d

Account number

36

Amount of line 34 you want applied to your 2022 estimated tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36

Amount You Owe

37

Amount You Owe. Subtract line 33 from line 24. For details on how to pay, see instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37

fill in the blank 20036ffd104207d_25

38

Estimated tax penalty (see instructions) . . . . . . . . . . . . . .

38