Prepare 1040 Tax Return

Bonnie R. Jackson lives at 4193 Colorado Lane, Fort Collins, CO 80505. She is a tax accountant with Miller Manufacturing Company, 2301 Wide Avenue, Fort Collins, CO 80505 (employer identification number 45-7894561). She has two Schedule C businesses. She writes computer software programs for tax practitioners and has a part-time tax practice. Bonnie is single and has no dependents. Bonnie was born on July 4, 1972, and her social security number is 456-78-9542. She wants to contribute $3 to the Presidential Election Campaign Fund.

The following information is shown on Bonnies 2016 wage and tax statement (W-2).

Line	Description	Amount
1	Wages, tips, other compensation	$65,000
2	Federal income tax withheld	10,500
3	Social security wages	65,000
4	Social security tax withheld	4,030
5	Medicare wages and tips	65,000
6	Medicare tax withheld	943
15	State	Colorado
16	State wages, tips, etc.	65,000
17	State income tax withheld	1,954

Other 2016 transactions include the following.

Bonnie received interest of $1,300 from Arizona Federal Savings and Loan and $400 from Colorado State Bank. Each financial institution reported the interest income on a Form 1099-INT. She received qualified dividends of $800 from Green Corporation, $750 from Yellow Corporation, and $650 from Red Corporation. Each corporation reported Bonnies dividend payments on a Form 1099-DIV.

Bonnie received a $1,100 income tax refund from the state of Colorado on April 29, 2016. On her 2015 federal income tax return, she reported total itemized deductions of $8,200, which included $2,200 of state income tax withheld by her employer.

Fees earned from her part-time tax practice totaled $3,800. She paid $600 to have the tax returns processed by a computerized tax return service.

On February 8, Bonnie bought 500 shares of Gray Corporation common stock for $17.60 a share. On September 12, Bonnie sold the stock for $14 a share.

Bonnie bought a used sport utility vehicle for $6,000 on June 5. She purchased the vehicle from her brother-in-law, who was unemployed, and was in need of cash. On November 2, she sold the vehicle to a friend for $6,500.

On January 2, Bonnie acquired 100 shares of Blue Corporation common stock for $30 a share. She sold the stock on December 19 for $55 a share.

Bonnie records revenues of $16,000 from the software development business. Bonnie incurred the following expenditures in connection with her software development business.

Cost of personal computer (100% business use)	$7,000
Cost of printer (100% business use)	2,000
Furniture	3,000
Supplies	650
Fee paid to computer consultant	3,500

Bonnie elected to deduct the maximum portion of the cost of the computer, printer, and furniture allowed under the provisions of 179. These items were placed in service on January 15 and used 100 percent in her business.

Although her employer suggested that Bonnie attend a convention on current developments in corporate taxation, Bonnie was not reimbursed for the travel expenses of $1,420 she incurred in attending the conference. The $1,420 included $200 for meals.

Bonnie paid $300 for prescription medicines and $2,875 in physician and hospital bills. Medical insurance premiums were paid by her employer. Bonnie paid real property taxes of $1,766 on her home. Interest on her home mortgage at Valley National Bank was $3,845, and interest paid to credit card companies totaled $320.

Bonnie contributed $2,080 to various qualified charities during the year. Professional dues and subscriptions totaled $350.

Bonnie paid $1,000 in estimated Federal income taxes throughout the year. She was covered for the entire year by Miller Manufacturings health insurance policy.

Required: Prepare Bonnie R. Jacksons 2016 tax return. You will need to complete Form 1040, 2106, 8949, and 4562 and Schedules A, B, C, D, and SE. You should complete to separate Schedules C for the software development business and tax practice. The forms, schedules, and instructions can be found at the IRS website (www.irs.gov). The instructions can be helpful in completing the forms. Make sure you use the 2016 tax return. Round all numbers to the whole dollar.