tax year 2018
. TFP08.57 (Algorithmic Note: This problem is for the 2018 tax year. anice Morgan, age 24, is single and has no dependents. She is a freelance writer. In January 2018, Janice opened her own office located at 2751 Waldham Road, Pleasant Hill, NM 88135. She called her business Writers Anonymous. Janice is a cash basis taxpayer. She lives at 132 Stone Avenue, Pleasant Hill, NM 88135. Her Social Security number is 123-45-6789. Janice's parents continue to provide health insurance for her under their policy. Janice wants to contribute to the Presidential Election Campaign Fund. During 2018Janice reported the following income and expense items connected with her business. Income from sale of articles Rent $85,000 16,500 7,900 1,800 5,000 85,000 o5 00 7,400 1.800 5000 2,300 Supplies Insurance Travel (including meals of $1,200) 3,500-12c02,3o 67,500 from eus Sooncome s Panice wants too1 ,,uo Janice purchased and placed in service the following fixed assets for her business. Janice wants to elect imm if possible. immediate expensing under $ 179, . Furniture and fixtures (new) costing $2,000 on January 10. Computer equipment (new) costing $12,400 on July 28. besuckon for interest Coo total Hemites ded. 12,65o Janice's itemized deductions include: State income tax Home mortgage interest paid to First National Bank6,000 Property taxes on home Charitable contribution to her alma mater, State College 1,200 . Mational Bank 12.950 2,500. Deouchon sor toxes 5150 Janice did not keep a record of the sales tax she paid. The amount from the sales tax table is $437 Janice reports interest income of $4,000 on certificates of deposit at Second National Bank. She made estimated tax payments of $3,000 for 2018. interest ncom 4000 20,263 AGI-12 equired: Compute Janice Morgan's 2018 Federal income tax payable (or refund due) by providing the following informatien that would be reported on Form 1040 and Schedules A, B, C, and SE. Make realistic assumptions about any missing data. . If an amount is zero, enter 0 Enter all amounts as positive numbers . When computing the tax liability, do not round your immediate calculations. If required, round your final answers to the nearest dollar. Form 1040 Information income:8S,ooo Provide the following that would be reported on Janice's Form 1040: Sunale 2. Calculate taxable gross income. s-24 3. Calculate the total adjustments for AGI 4. Calculate adjusted gross income. 20,203 20,2 63 5. Calculate the greater of the standard deduction or itemized deductions. 6. Calculate the qualified busies income deduction. 7. Calculate total taxable income. 8. Calculate the income tax liability. 9 Calculate SE taxes due. 10. Calculate the total tax credits available 11. Calculate total withholding and tax payments. 12. Calculate the amount overpaid (refund): 13. Calculate the amount of taxes owed
