Question
Please help with solving this. I previously asked this question but it was answered with 2017 and 2015 tax information. Per the questions below it
Please help with solving this. I previously asked this question but it was answered with 2017 and 2015 tax information. Per the questions below it is based on 2020. Thank you in advance!
Tax Return #5
Addison Brown, single and age 32. She is employed as regional sales manager by PILLS Corporation, a manufacturer and distributor of vitamins and food supplements. Addison is paid an annual salary of $50,000. $9,600 of Federal Income Tax was withheld. Addison also has a bookkeeping and tax business that she runs out of her home. Her fees income collected for the year was $25,000. Out of 1,500 square feet of living space in her apartment, Addison has set aside 300 square feet as an office.
Expenses for 2020 relating to the office are listed below.
Rent $18,000
Utilities $ 4,000
Insurance $ 1,600
Carpet $ 1,200 (office area only)
Her self-employment-related expenses for 2020 are summarized below.
Airfare $4,100
Lodging $3,200
Business meals $2,800
Entertainment $2,400
Taxi, Uber, etc. $ 300
Business Gifts $ 540
Continuing Education $ 400
Professional journals $ 140
The business gifts were boxes of candy costing $30 sent to 18 clients at Christmas. The continuing education was a noncredit course dealing with improving people management skills that Addison took online. She uses her automobile 10% for business and 90% for personal. During 2020, Addison drove a total of 15,000 miles - use standard mileage rate. Besides the items already mentioned, Addison had the following revenue in 2020: Bank of America interest income of $250 and City of Dallas bond interest of $1,000.
Addison's expenditures for 2020 (not previously noted) are summarized below.
Medical 7,000
State and local tax 4,000
Property Taxes 7,000
Church pledge Paid 6,000
Credit card interest 2,000
Tax return preparation fee 500
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