Scenario: Sarah's Graphic Design Business Sarah Thompson is a freelance graphic designer who started her own business, "Designs by Sarah," last year. As tax season approaches, Sarah realizes that she needs to file a Schedule C along with her personal income tax return. This is the first time she's navigating the complexities of small business taxes, and she's seeking your assistance.

BUSINESS DETAILS: Business Name: Designs by Sarah Business Type: Sole Proprietorship EIN (Employer Identification Number): None (because she's a sole proprietor) Business Start Date: March 1, 2022 Business Address: 123 Main Street, Anytown, USA

Revenue: Sarah's total revenue for the year was $45,000. This includes payments from various clients for graphic design services.

Expenses: Office Supplies: $500 Software Subscriptions (Adobe Creative Cloud): $600 Business Mileage (Sarah's car is used for business purposes): 2,500 miles (1,000 before July 1). Internet and Phone Expenses: $800 Advertising (Online promotions and business cards): $700 Meals & Entertainment (Related to business meetings): $300

Assets: Sarah purchased a new computer for her graphic design work, costing $2,000. She plans to depreciate it over its useful life and does NOT take bonus depreciation or Section 179.

Home Office: Sarah uses a dedicated room in her apartment (200 square feet) as her home office. Her apartment is 1,000 square feet in total. Rent for the apartment is $1,200 per month. Sarah's utilities (electricity, internet) amount to $150 per month. She wants to claim the home office deduction.

Prepare her Schedule C, SE, 4562 & 8829.