Part I: You will be completing the portion of Tony and Tina's Tetrazzini's 1040 tax return for Tina's sole proprietorship business. Complete form 1040 Schedule C, and forms required by Schedule C: Forms 4562 (depreciation) and 8829 (home office) for Tina's Kitchen Supplies. Use handouts from module 10.1 and 7.2 to assist you in preparing the forms. The solution for Part I will be released after the due date. You will use this solution to complete Part II. In addition, make sure to compare your work to the solution and understand the differences, if any. Completing the Forms: You will be using the IRS Free File Fillable Forms option within the IRS website to complete all forms required in part I. You must register and setup an account for this option. Once in the software, click on the bottom of the page to "Add Form". Begin by adding the Schedule C. All additional forms needed for part I can only be added when in the Schedule C form by clicking on "Add", next to the related deduction, within the Schedule C form. We are not using the Simplified Method for calculating the business use of the home. Make sure to use the "Do the math" button, found on the bottom of the page to make Assignment Completion of the 1040 form requires the forms/schedules, listed below. All the forms support the main form 1040 , and link together, as discussed in class. Form 1040 Form 1040, Schedule E - Supplemental Income and Loss Form 1040, Schedule 1 Form 1040, Schedule SE - Self-Employment Tax Form 1040, Schedule 2 Form 4562 - Depreciation and Amortization Form 1040, Schedule B Form 8829 - Expenses for Business Use of your home Form 1040, Schedule C - Profit/Loss from Business Form 8995 - Qualified Business Income Deduction General Instructions 1. Round up/down for each tax return line entry, following normal rounding rules. 2. The Tetrazzini's preferential tax rate is 0% 3. Because cost of goods sold on Schedule C is automatically calculated based on amounts reported in the cost of goods sold section, just enter your cost of goods sold amount on the materials/supplies line in part III and the total cost of goods sold amount will calculate correctly. 4. Remember to use 2022 tax rules and tax tables, which can be found at the end of your textbook, Appendix C. Tony and Tina's Tax Information Tony and Tina Tettrazzini 1150 W. Stadium Kalamazoo, MI 49008 Tony, social security \#355-44-4450 and Tina, social security \#565-44-5000, are married and have 2 children, Tommy, aged 11, born 10/5/2011, Social security \#554-60-0150 and Taylor, aged 17, born 3/22/2005, social security \#340-55-4211. Both children have lived with Tony and Tina for the entire year. The following is a summary of the Tetrazzini's tax information. 1. Tony is a fifth-grade school teacher. His W-2 reports a salary of $52,000 with $8,200 of federal income tax withheld from his salary. 2. Tony owns stock and received a dividend during the year. His 1099-Div form reports $2,000 of qualified dividend income. 3. Tina works and is a partner in Foodies Unite, a restaurant business. In addition, she runs a business out of her home, Tina's Kitchen Supplies, which is taxed as a sole proprietorship. 4. Tony and Tina reported the following costs for their home, paid in the current year. UtilitiesRealestatetaxesInsuranceInterest$2,000$8,000$2,300$12,000 4. Estimated Quarterly federal income tax payments: 1st Quarter payment: $1,250 2nd Quarter payment: $1,250 3rd Quarter payment: $1,250 4th Quarter payment: $1,250 5. Tina is a general partner in "Foodies Unite", a general partnership. See her 1065K1 form. She "materially participates" in the operations of the partnership, therefore the income from her partnership is non-passive. This business flow-through amounts are reported on Form 1040, schedule E and Form 1040, Schedule B. Her allocated portion of partnership items per her K-1 follows: Ordinary income (subject to self-employment tax) $6,000 (non-passive income) Interest income $1,000 6. Tina owns and manages "Tina's Kitchen Supplies" out of her home. The business sells gourmet kitchen supplies. It is taxed as a sole proprietorship and uses the cash basis method of accounting. The activity from this business is reported on Form 1040, Schedule C, Forms 4562 and 8829 . The net income from this business is considered self-employment income. Her income and expenses are below: Additional information regarding Tina's Kitchen Supplies: A. Purchased equipment on 3/5/22 for $12,000; Reba elects to take section 179 deprecation on the equipment. B. Reba drives a 2010 Ford Explorer, which was placed in service on 1/1/10. During 2022, the vehicle had 4,400 business miles and 11,000 total miles. Use the 2022 standard mileage rate (google it) to calculate "car and truck expenses" for form 1040, schedule C. She does not have another vehicle for personal mileage but does document all her business miles. Make sure to report the vehicle, mileage, and documentation information on form 4562, as part of 1040, Schedule C. C. Home office: office used exclusively and on a regular basis; She moved her office to her home on Jan 1 of the year. Cost of the home =$245,000, which included $50,000 for land. The office portion of the home is considered non-residential real property and was placed in service on January 1 of the current year. Use form 8829 to claim her home office deduction, as part of Form 1040, schedule C. See Tony and Tina's Tax Information, on page two, for the expenses related to their home. Office space =150 sq feet: Total home =2,000 sq feet Part I: You will be completing the portion of Tony and Tina's Tetrazzini's 1040 tax return for Tina's sole proprietorship business. Complete form 1040 Schedule C, and forms required by Schedule C: Forms 4562 (depreciation) and 8829 (home office) for Tina's Kitchen Supplies. Use handouts from module 10.1 and 7.2 to assist you in preparing the forms. The solution for Part I will be released after the due date. You will use this solution to complete Part II. In addition, make sure to compare your work to the solution and understand the differences, if any. Completing the Forms: You will be using the IRS Free File Fillable Forms option within the IRS website to complete all forms required in part I. You must register and setup an account for this option. Once in the software, click on the bottom of the page to "Add Form". Begin by adding the Schedule C. All additional forms needed for part I can only be added when in the Schedule C form by clicking on "Add", next to the related deduction, within the Schedule C form. We are not using the Simplified Method for calculating the business use of the home. Make sure to use the "Do the math" button, found on the bottom of the page to make Assignment Completion of the 1040 form requires the forms/schedules, listed below. All the forms support the main form 1040 , and link together, as discussed in class. Form 1040 Form 1040, Schedule E - Supplemental Income and Loss Form 1040, Schedule 1 Form 1040, Schedule SE - Self-Employment Tax Form 1040, Schedule 2 Form 4562 - Depreciation and Amortization Form 1040, Schedule B Form 8829 - Expenses for Business Use of your home Form 1040, Schedule C - Profit/Loss from Business Form 8995 - Qualified Business Income Deduction General Instructions 1. Round up/down for each tax return line entry, following normal rounding rules. 2. The Tetrazzini's preferential tax rate is 0% 3. Because cost of goods sold on Schedule C is automatically calculated based on amounts reported in the cost of goods sold section, just enter your cost of goods sold amount on the materials/supplies line in part III and the total cost of goods sold amount will calculate correctly. 4. Remember to use 2022 tax rules and tax tables, which can be found at the end of your textbook, Appendix C. Tony and Tina's Tax Information Tony and Tina Tettrazzini 1150 W. Stadium Kalamazoo, MI 49008 Tony, social security \#355-44-4450 and Tina, social security \#565-44-5000, are married and have 2 children, Tommy, aged 11, born 10/5/2011, Social security \#554-60-0150 and Taylor, aged 17, born 3/22/2005, social security \#340-55-4211. Both children have lived with Tony and Tina for the entire year. The following is a summary of the Tetrazzini's tax information. 1. Tony is a fifth-grade school teacher. His W-2 reports a salary of $52,000 with $8,200 of federal income tax withheld from his salary. 2. Tony owns stock and received a dividend during the year. His 1099-Div form reports $2,000 of qualified dividend income. 3. Tina works and is a partner in Foodies Unite, a restaurant business. In addition, she runs a business out of her home, Tina's Kitchen Supplies, which is taxed as a sole proprietorship. 4. Tony and Tina reported the following costs for their home, paid in the current year. UtilitiesRealestatetaxesInsuranceInterest$2,000$8,000$2,300$12,000 4. Estimated Quarterly federal income tax payments: 1st Quarter payment: $1,250 2nd Quarter payment: $1,250 3rd Quarter payment: $1,250 4th Quarter payment: $1,250 5. Tina is a general partner in "Foodies Unite", a general partnership. See her 1065K1 form. She "materially participates" in the operations of the partnership, therefore the income from her partnership is non-passive. This business flow-through amounts are reported on Form 1040, schedule E and Form 1040, Schedule B. Her allocated portion of partnership items per her K-1 follows: Ordinary income (subject to self-employment tax) $6,000 (non-passive income) Interest income $1,000 6. Tina owns and manages "Tina's Kitchen Supplies" out of her home. The business sells gourmet kitchen supplies. It is taxed as a sole proprietorship and uses the cash basis method of accounting. The activity from this business is reported on Form 1040, Schedule C, Forms 4562 and 8829 . The net income from this business is considered self-employment income. Her income and expenses are below: Additional information regarding Tina's Kitchen Supplies: A. Purchased equipment on 3/5/22 for $12,000; Reba elects to take section 179 deprecation on the equipment. B. Reba drives a 2010 Ford Explorer, which was placed in service on 1/1/10. During 2022, the vehicle had 4,400 business miles and 11,000 total miles. Use the 2022 standard mileage rate (google it) to calculate "car and truck expenses" for form 1040, schedule C. She does not have another vehicle for personal mileage but does document all her business miles. Make sure to report the vehicle, mileage, and documentation information on form 4562, as part of 1040, Schedule C. C. Home office: office used exclusively and on a regular basis; She moved her office to her home on Jan 1 of the year. Cost of the home =$245,000, which included $50,000 for land. The office portion of the home is considered non-residential real property and was placed in service on January 1 of the current year. Use form 8829 to claim her home office deduction, as part of Form 1040, schedule C. See Tony and Tina's Tax Information, on page two, for the expenses related to their home. Office space =150 sq feet: Total home =2,000 sq feet