Prepare a 2016 Form 1040 for the individual below. Also prepare Schedules C.

PERSONAL INFORMATION & WAGES

Lala Chambers, a divorced single taxpayer and practicing attorney, lives at 9551 Oak Leaf Lane in Pine Cove, AZ 86035. Her social security number is 412-34-5670 (date of birth 2/27/1972).

Her W-2 contained the following information:

Wages (box 1) = $83,401.55

Federal W/H (box 2) = $ 9,782.15

Social security wages (box 3) = $83,401.55

Social security W/H (box 4) = $ 5,170.90

Medicare wages (box 5) = $83,401.55

Medicare W/H (box 6) = $ 1,209.32

In addition, Lala made alimony payments totaling $9,600 for the year to her former husband Alex, an unemployed mine worker, whose social security number is 412-34-5671. He found an old girlfriend on Facebook from high school; that is why they got divorced.

She made estimated tax payments this year of $10,000 each quarter of 2016.

HOME BUSINESS

Hint: Use Schedule C. Schedule SE is for bonus points, but is not required. She also has a home cleaning business she runs as a sole proprietorship. The following are the results from business operations for the tax year 2016:

Gross receipts							$43,000
Business mileage: 27,000 (miles incurred ratably throughout the year) 35,000 miles total during the year 2016 Van (over 6,000 lbs) placed in service 1/01/2016, cost $27,000
Postage			(500)
Supplies			(500)
Phone			(1,250)
Rent			(2,400)
Insurance			(2,800)
Van expenses			(4,500)
Plastic surgery to be more attractive to customers (5,000)
Business assets	Date Purchased	Cost
Computer	5/18/16	$2,200

1040

https://www.irs.gov/pub/irs-pdf/f1040.pdf

SCHEDULE C

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

33 Method(s) used to value closing inventory a Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If "Yes," attach explanation Cost b Lower of cost or market c Other (attach explanation) 34 -.. . YesNo 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation 36 Purchases less cost of items withdrawn for personal use 37 Cost of labor. Do not include any amounts paid to yourself 38 Materials and supplies 35 36 37 38 39 Other costs.. 40 40 Add lines 35 through 39 41 Inventory at end of year 42 Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4 42 Part IV Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not required to file Form 4562 for this business. See the instructions for line 13 to find out if you must file Form 4562 43 When did you place your vehicle in service for business purposes? (month, day, year) 44 Of the total number of miles you drove your vehicle during 2016, enter the number of miles you used your vehicle for: a Business c Other 45 Was your vehicle available for personal use during off-duty hours?. Yes No 46 Do you (or your spouse) have another vehicle available for personal use? ....Yes No 47a Do you have evidence to support your deduction? . . No b If"Yes," is the evidence written? Part VC Other List below business expenses not included on lines 8-26 or line 30 48Total other expenses. Enter here and on line 27a 48 Schedule C (Form 1040) 2016