Tax Project 2B

Facts:

Taxpayer: Monica Lewis(SSN 633-33-9500) operates a business from her home at 123 Lexington Sacramento 95823. Her consulting business (IRS business code 541600) uses the cash method and materially participates in the business

Revenue	$73,380
Expenses:
Contract Labor	$8,750
Business taxes	225
Advertising	250
Meals and entertainment	325
Insurance	750
Repairs	335
Office expense	995
Supplies	560
Professional fees	1,300
Automobile Expenses:
Repairs, gas & oil for automobile	3,645
Registration and taxes	275

Assets:
Office Equipment, purchases uses on 3/19/2016, 7 year	2,650
Office machine, purchased on 6/11/2016, 7 year	2,100
Furniture, purchased on 9/1/2015, 7 year	2,400
Computer equipment, purchased new on 4/21/2017, 5 year	3,135
Automobile, purchased new on 2/25/2017	22,250

No Section 179 [or bonus depreciation] was taken on assets purchases in prior year(s). No Section 179 in current year

For assets purchased prior to 2017, you will need to manually compute the depreciation through the pio year. If entered correcctly, the system should compute the current ear depreciation properly for assets pleaced in service prior to 2017.

She uses her car for business and drove 14,150 miles, plus parking and tolls of $105. Her business miles were 10,615

Monica uses one her rooms in her house regularly and exclusively as a home office. The size of the room is 215 square feet. Total square footage of the house is 2,010. Home expenses included utilities, $2,450; insurance $450; cleaning and maintenance $950; home mortgage interest $9,500; real estate taxes $2,975; repairs $475; the depreciable basis is 199,815 [249,815 less land of $50,000}.

In addition to her consulting busines, Monica also had a part-time job as follows:

	Gross Wages	Federal Income Tax Withheld	Social Security Tax	Medicare Tax Withheld	State Income Tax Withheld	SDI Withheld
Bank Services Inc	$9,000	$1,455	$558.00	4130.50	$150	$81

Bank Services Inc [20-3456789 federal id and 433-3589-2 state id] 866 Howe Avenue, Sacramento, CA 95825

Interest from American Bank of $560; total dividends recieved from Industrial Mutual Fund of $1,930, including qualifying dividend of $1,780. The following transactions were reported to IRS on 1099 without basis.

Transaction	Purchased	Sold	Net Sale Proceed	Cost
200 shs Ford	02/25/2009	05/11/2017	15,400	13,200
300 shs Aetna Inc	04/25/2016	04/12/2017	11,500	12,400
500 shs Safeway	08/08/2006	10/15/2017	10,300	15,100
100 shs Walmart	Inherited*	12/10/2017	11,500	*

*Monica inherited form her mother. Her mother purhcased the stock on 3/1/2017 for 8,300. She died on 7/31/2017. The market value at the time of death was $9,500.

#Monica sold on 11/18/2017 for $1,685 furniture used in her business. She purchased the furniture on 9/1/2015 for $2,400. The accumulated depreciation of the machine was $931

Monica is single with no dependents. She was born 4/18/1982. She paid for her own health insurance in the amount of $3,350 for the entire year. She contributed $2,500 to her churhc and $250 of non-cash contributions to Goodwill. Last year she paid a tax prepares $400 to prepare her taxes. Monica paid estimate tax payments for 2017 as follows:

Date of Payment	Federal	State
4/15/2017	$2,000	$300
6/15/2017	$2,000	$400
9/15/2017	$2,000	$ 0
1/15/2018	$2,000	$300

Prepare Monica's 2017 federal and state income tax returns to minimize the taxes she is to incur.

Complete and submit appropriate federal and state depreciation schedules and Forms 8949