Steve and Nancy Harrington are married and have six children. They file their tax returns jointly. Steve is a high school science teacher and head basketball coach and Nancy is a self-employed investigative journalist. Steve participates in his employers cafeteria plan for benefits. They had the following cash flows during 2022:

Cash Receipts:
Steves Salary reported on Form W-2, box 1	50,000
Interest Income from Indiana State Bank on savings account	350
Interest Income from Ameriprise investment account (not a retirement account)	1,450
Interest Income from City of Hawkins bond	2,100
Gift from friend, Enzo	25,000
Qualified Dividend Income from Kellogg Company	1,250
Qualified Dividend Income from Coca-Cola Co	800
Nonqualified Dividend Income from Nestle Corporation	250
Face value life insurance proceeds on death of Nancys father	500,000
Flow-through Income from Enterprise Product Partners	1,500
Value of Nancys inheritance from her fathers estate	3,130,000
Proceeds from asset sales*	(see next page)
Cash Payments:
Federal Income Tax Withholding from W-2	4,000
State Income Tax Withholding from W-2	1,200
Class materials Steve purchased, unreimbursed by school district	525
Student loan interest paid	2,700
IRA contributions ($6,000 each)	12,000
Qualified medical expenses paid out-of-pocket	3,200
Cash Payments are continued on the next page
Interest on Steves car loan	1,200
Property taxes on automobiles (not used in Nancys business)	1,800
State sales taxes paid (per IRS tables)	2,100
Real estate taxes on principle home	9,600
Charitable contributions (cash contributions to public charities)	12,600
Mortgage interest on principle home (outstanding balance of mortgage 12/31/22 was $320,000 and reported on Form 1098)	8,300
Company provided Benefits (paid for by School district):
Health insurance premiums, family coverage	16,000
Vision and Dental insurance, family coverage	2,400
Contributions to retirement plan for Steve	6,300

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The Harringtons had the following asset sales during 2022:

• On December 20^th, Steve sold 500 shares of Kellogg Company stock for $24/share. He had originally bought those shares on February 5, 2022, for $10/share.
• On November 20^th, Steve sold 50 shares of BMW AG stock for $25/share. He bought those shares on March 11, 2011, for $9/share.
• On November 20^th, they sold 100 shares of American Tower Corporation stock for $175/share. They bought those shares on March 5, 2022, for $300/share.
• On December 15^th, Nancy sold 1 share of Berkshire-A that she inherited from her fathers estate, which closed on October 15, 2022. She received $411,000 of proceeds. Nancys dad paid $11,000 for the share in 1983. On the date of her fathers death, January 11, 2022, it was worth $387,000.
• On December 15^th, Nancy sold a piece of land that she inherited from her fathers estate, which closed on October 15, 2022. She received $29,000 of proceeds. Her dad paid $5,000 for that land in 1990 and on the date of her fathers death, January 11, 2022, it was worth $28,000.

In addition, they have a $12,800 long-term capital loss carryover from the prior year.

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Nancy runs her business as a Sole Proprietorship on a cash basis. She did not need to file 1099s for 2022. The business name is Nancy Drew Enterprises, and the EIN is 01-7654321. She materially participates in her business. Cash receipts and cash payments (completely business, unless otherwise noted) as follows:

Cash Receipts:
Gross receipts	320,000
Cash Payments:
Wages (for staff)	38,000
Payroll Taxes (for above wages)	2,900
Office Supplies	4,600
Internet & Telephone	1,700
Legal & Accounting (professional) Fees ($600 for tax return preparation of Sch C; $900 for remainder of 1040; legal fees $1,500)	3,000
Meals (while traveling and/or discussing business with clients)	3,600
Advertising	1,900
Business liability insurance	2,500

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Additional information regarding Nancys business:

Miles: 22,000 business miles and a total of 26,000 miles. 13,000 miles by 6/30/22 and 13,000 after 7/1/22. The non-business miles were personal in nature. Nancy uses the standard mileage rate. The vehicle is a 2019 BMW 3-series sports wagon, put in service 11/6/19. The vehicle is available for family use. They own 3 other vehicles. Nancy uses an app on her iPhone to record business mileage. Home Office: Nancy wants to use the safe harbor amount. She completes all research and administrative work at home. The office is 200 square feet, and the total house is 5,400 square feet.

Nancy has a SEP (Simplified Employed Pension Plan) and would like to maximize her contribution for 2022. She is asking you, as her tax professional, to calculate that amount so that she may make a timely deposit into her account.

Nany paid Federal tax estimates of $16,000 and state tax estimates of $8,000.

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Their address is 11 Mirkwood Road, Hawkins, IN 46067. Their personal information is as follows:

Name	SSN	Birthday
Steve E.	507-20-XXXX	7/4/67
Nancy E.	506-10-XXXX	11/18/69
Noah (son)	508-55-XXXX	11/6/00
Nola (daughter)	508-55-XXXX	11/6/00
Natalie (daughter)	509-11-XXXX	1/1/03
Sadie (daughter)	509-22-XXXX	4/15/05
Scott (son)	509-33-XXXX	12/27/07
Sara (daughter)	509-44-XXXX	11/4/09

The Harringtons have six children. Noah and Nola are college seniors, both are full-time students at E College. Natalie is a full-time college sophomore at P University. Sadie is a high school junior; Scott is a high school freshman and Sara is in seventh grade. Noah and Nola had paid internships this year, both earning $10,000. In addition, they both have full scholarships at "E", including room and board. Natalie did not work this year and is funding her education with student loans. She lives in the dormitory at "P". Sadie worked part-time at Scoops Ahoy at the mall this year, earning $5,400. Neither Scott nor Sara worked this year. Steve and Nancy provide the majority of financial support for all their children.

INSTRUCTIONS: PREPARE SCHEDULE C

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 2022 , enter the number of miles you used your vehicle for: a Business b Commuting (see instructions) 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? Yes No h If "Yee" is the evirlenre written? Yoe Nn 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 2022 , enter the number of miles you used your vehicle for: a Business b Commuting (see instructions) 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? Yes No h If "Yee" is the evirlenre written? Yoe Nn