The information that needs to be found is simply the outlined boxes, some are already checked as correct and some as incorrect, I was unable to find the answers for the ones incorrect and not filled out.

Thank you!

Note: This problem is for the 2018 tax year. David R. and Ella M. Cole (ages 39 and 38, respectively) are husband and wife who live at 1820 Elk Avenue, Denver, CO 80202. David is a self-employed consultant specializing in retail management, and Ella is a dental hygienist for a chain of dental clinics. David earned consulting fees of $145,000 in 2018. He maintains his own office and pays for all business expenses. The Coles are adequately covered by the medical plan provided by Ella's employer but have chosen not to participate in its 401(k) retirement plan. David's employment-related expenses for 2018 are summarized below. Airfare 58,800 Lodging 5,000 Meals (during travel status) 4,800 Entertainment 3,600 Ground transportation (e.g., limos, rental cars, and taxis) 800 Business gifts 900 Office supplies includes postage, overnight delivery, and copying) 1,500 The entertainment involved taking clients to sporting and musical events. The business gifts consisted of $50 gift certificates to a national restaurant. These were sent by David during the Christmas holidays to 18 of his major clients. In addition, David drove his 2016 Ford Expedition 11,000 miles for business and 3,000 for personal use during 2018. He purchased the Expedition on August 15, 2015, and has always used the automatic (standard) mileage method for tax purposes. Parking and tolls relating to business use total $340 in 2018. When the Coles purchased their present residence in April 2015, they devoted 450 of the 3,000 square feet of living space to an office for David. The property cost $440,000 $40,000 of which is attributable to the land) and has since appreciated in value. Expenses relating to the residence in 2018 (except for mortgage interest and property taxes; see below) are as follows: Insurance $2,600 Repairs and maintenance 900 Utilities 4,700 Painting office area; area rugs and plants in the office)* 1,800 *Treat as a direct office in home expense. In terms of depreciation, the Coles use the MACRS percentage tables applicable to 39-year nonresidential real property. As to depreciable property (e.g. office furniture), David tries to avoid capitalization and uses whatever method provides the fastest write-off for tax purposes. Ella works part-time as a substitute when a hygienist is ill or on vacation or when one of the clinics is particularly busy (e.g. prior to the beginning of the school year). Assumed that Ella is an employee (not an independent contractor). Besides her transportation, she must provide and maintain her own uniforms. Her expenses for 2018 appear below. Uniforms $690 State and city occupational licenses 380 Professional journals and membership dues in the American Dental Hygiene Association Correspondence study course (taken online) dealing with teeth whitening procedures Ella's salary for the year is $42.000, and her Form W-2 for the year shows income tax withholdings of $5,000 (Federal) and $1,000 (state) and the proper amount of Social Security and Medicare taxes. Besides the items already mentioned, the Coles had the following receipts during 2018 Interest income- Ella's salary for the year is $42.000, and her Form W-2 for the year shows income tax withholdings of $5,000 (Federal) and $1,000 (state) and the proper amount of Social Security and Medicare taxes. Besides the items already mentioned, the Coles had the following receipts during 2018 Interest income- State of Colorado general purpose bonds $2,500 IBM bonds 800 Wells Fargo Bank 1,200 $4,500 Federal income tax refund for year 2017 510 Life insurance proceeds paid by Eagle Assurance Corporation 200,000 Inheritance of savings account from Sarah Cole 50,000 Sales proceeds from two ATVs 9,000 For several years, the Coles' household has included David's divorced mother, Sarah, who has been claimed as their dependent. In late December 2017, Sarah unexpectedly died of coronary arrest in her sleep. Unknown to Ella and David, Sarah had a life insurance policy and a savings account (with David as the designated beneficiary of each). In 2017, the Coles purchased two ATVs for $14,000. After several near mishaps, they decided that the sport was too dangerous. In 2018, they sold the ATVs to their neighbor. $4,500 56,400 Additional expenditures for 2018 include: Funeral expenses for Sarah Taxes- Real property taxes on personal residence Colorado state income tax due paid in April 2018 for tax year 2017) Mortgage interest on personal residence (Rocky Mountain Bank) Paid church pledge Contributions to traditional IRAs for Ella and David ($5,500 + 55,500) 310 6,710 6,600 2,400 11,000 In 2018, the Coles made quarterly estimated tax payments of $6,000 (Federal) and $500 (state) for a total of $24,000 (Federal) and $2,000 (state). Relevant Social Security numbers are: David Cole 123-45-6788 Ella Cole 123-45-6787 The Coles do not want to contribute to the Presidential Election Campaign Fund. Also, they want any overpayment of tax refunded to them and not applied toward next year's tax liability. David will have a self-employment tax liability. Required: Using the appropriate forms and schedules, compute the Coles' Federal income tax for 2018. Disregard the alternative minimum tax (AMT) and the various education credits Make realistic assumptions about any missing data. Enter all amounts as positive numbers. If an amount box does not require an entry or the answer is zero, enter "0". If required, round all dollar amounts to the nearest dollar. It may be necessary to complete the tax schedules before completing Form 1040. Use the included tax rates schedules to compute the tax. When computing the tax liability, do not round your immediate calculations. If required, round your final answers to the nearest dollar. Form 1040 Complete the Coles' Form 1040. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2018 OMB No. 1545-0074 IRS Use Only Filing status: Married filing jointly Last name Your first name and initial David R. Cole Your social security number 123-45-6788 Your standard deduction: None Last name If joint return, spouse's first name and initial Ella M. Cole Spouse's social security number 123-45-6787 Spouse standard deduction: Someone can claim your spouse as a dependent Spouse was born before January 2, 1954 Spouse is blind Spouse itemizes on a separate return or you were dual- status alien Yes Full-year health care coverage or exempt (see inst.) Home address (number and street). If you have a P.O. box, see instructions. 1820 Elk Avenue Apt. no. Presidential Election Campaign (see inst.) None City, town or post office, state, and ZIP code. If you have a foreign address, attach Schedule 6. If more than four dependents, see Denver, CO 80202 inst. and here Dependents (see instructions): (2) Social security number (3) Relationship to you (4) if qualifies for (see inst.): (1) First name Last name Child tax credit Credit for other dependents Sign Here Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Your signature Date Your occupation If the IRS sent you an Identity Consultant Protection PIN, enter it here (see inst.) Joint return? See instructions. Keep a copy for your records. Spouse's signature. If a joint Date return, both must sign. Spouse's occupation Dental Hygenist If the IRS sent you an Identity Protection PIN, enter it here Preparer's name PTIN Firm's EIN Preparer's signature Self-Prepared Paid Preparer Use Only Check if: 3rd Party Designee Self-employed Firm's name Phone no. Firm's address BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2018) Form 1040 (2018) Page 2 Form 1040 (2018) Page 2 1 2a 42,000 2,000 2b 3b 4a Attach Form(s) - 2. Also attach Form(s) W-2G and 1099-R if tax was withheld 5a Wages, salaries, tips, etc. Attach Form(s) W-2......... Tax-exempt interest 2a 2,500 b Taxable interest Qualified dividends 3a b Ordinary dividends IRAs, pensions, and b Taxable amount annuities Social security benefits b Taxable amount Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 46,500 X ................ . .. Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6.... Standard deduction or itemized deductions (from Schedule A). . . . . . . . . . 6 7 Qualified business income deduction (see instructions)............... Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter-O-.... 8.449 X Standard 8 Deduction for- Single or married 9 filing separately, 10 $12,000 11 jointly or Qualifying widow(er), $24,000 Head of household 12 $18,000 . If you checked 13 any box under Standard 14 deduction, see instructions. 15 a Tax (see inst) (check if any from 1 Form(s) 8814 2 Form 4972 30 b Add any amount from Schedule 2 and check here... a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here ..... Subtract line 12 from line 11. If zero or less, enter-0-....... Other taxes. Attach Schedule 4 ........ Total tax. Add lines 13 and 14....... 8.449 X 16 Federal income tax withheld from Forms W-2 and 1099...... 4,000 X 17 Refundable credits: a EIC see inst.) b Sch 8812 c Form 8863 Add any amount from Schedule 5 . 18 Add lines 16 and 17. These are your total payments ...... 18 9,600 Refund 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid .......... 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here 1,151 20a Savings Direct deposit? See instructions. Routing number III|||| Type: Checking d Account number ||||||||||IIIIII 21 Amount of line 19 you want applied to your 2019 estimated tax ... Amount 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions...EEEEEEEE Estimated tax penalty (see instructions) ...... 23 You Owe 23 Go to www.irs.gov/ Form 1040 for instructions and the latest information. Form 1040 (2018) Complete Coles' Schedule 1 below for 2018. SCHEDULE 1 OMB No. 1545-0074 (Form 1040) Additional Income and Adjustments to Income Department of the 2018 Treasury Internal Attach to Form 1040. Attachment Revenue Service Go to www.irs.gov/Form 1040 for instructions and the latest information. Sequence No. 01 Name(s) shown on Form 1040 Your social security number David R. and Ella M. Cole 123-45-6788 Additional 1-9b Reserved....... 1-9b Income 10 Taxable refunds, credits, or offsets of state and local income taxes..... 11 Alimony received ... 61,067 X 19 20b 12 Business income or loss). Attach Schedule C or C-EZ............... 13 Capital gain or loss). Attach Schedule D if required. If not required, check here 14 Other gains or losses). Attach Form 4797..... 15a Reserved ........................ 16a Reserved. . . . . . . . . . . . 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E......... 18 Farm income or (loss). Attach Schedule F.... Unemployment compensation .......... 20a Reserved ...................... 21 Other income. List type and amount 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter here and include on Form 1040, line 6. Otherwise, go to line 23 23 Educator expenses... 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 ... 25 Health savings account deduction. Attach Form 8889 ......... 26 Moving expenses for members of the Armed Forces. Attach Form 3903........... Deductible part of self-employment tax. Attach Schedule SE..... 28 Self-employed SEP, SIMPLE, and qualified plans 29 Self-employed health insurance deduction .... 30 Penalty on early withdrawal of savings ..... 31a Alimony paid b Recipient's SSN 22 61,067 X Adjustments to Income 32 IRA deduction ........... 11,000 33 34 35 36 Student loan interest deduction ........ Reserved. Reserved ....... Add lines 23 through 35 ........ Note: This problem is for the 2018 tax year. David R. and Ella M. Cole (ages 39 and 38, respectively) are husband and wife who live at 1820 Elk Avenue, Denver, CO 80202. David is a self-employed consultant specializing in retail management, and Ella is a dental hygienist for a chain of dental clinics. David earned consulting fees of $145,000 in 2018. He maintains his own office and pays for all business expenses. The Coles are adequately covered by the medical plan provided by Ella's employer but have chosen not to participate in its 401(k) retirement plan. David's employment-related expenses for 2018 are summarized below. Airfare 58,800 Lodging 5,000 Meals (during travel status) 4,800 Entertainment 3,600 Ground transportation (e.g., limos, rental cars, and taxis) 800 Business gifts 900 Office supplies includes postage, overnight delivery, and copying) 1,500 The entertainment involved taking clients to sporting and musical events. The business gifts consisted of $50 gift certificates to a national restaurant. These were sent by David during the Christmas holidays to 18 of his major clients. In addition, David drove his 2016 Ford Expedition 11,000 miles for business and 3,000 for personal use during 2018. He purchased the Expedition on August 15, 2015, and has always used the automatic (standard) mileage method for tax purposes. Parking and tolls relating to business use total $340 in 2018. When the Coles purchased their present residence in April 2015, they devoted 450 of the 3,000 square feet of living space to an office for David. The property cost $440,000 $40,000 of which is attributable to the land) and has since appreciated in value. Expenses relating to the residence in 2018 (except for mortgage interest and property taxes; see below) are as follows: Insurance $2,600 Repairs and maintenance 900 Utilities 4,700 Painting office area; area rugs and plants in the office)* 1,800 *Treat as a direct office in home expense. In terms of depreciation, the Coles use the MACRS percentage tables applicable to 39-year nonresidential real property. As to depreciable property (e.g. office furniture), David tries to avoid capitalization and uses whatever method provides the fastest write-off for tax purposes. Ella works part-time as a substitute when a hygienist is ill or on vacation or when one of the clinics is particularly busy (e.g. prior to the beginning of the school year). Assumed that Ella is an employee (not an independent contractor). Besides her transportation, she must provide and maintain her own uniforms. Her expenses for 2018 appear below. Uniforms $690 State and city occupational licenses 380 Professional journals and membership dues in the American Dental Hygiene Association Correspondence study course (taken online) dealing with teeth whitening procedures Ella's salary for the year is $42.000, and her Form W-2 for the year shows income tax withholdings of $5,000 (Federal) and $1,000 (state) and the proper amount of Social Security and Medicare taxes. Besides the items already mentioned, the Coles had the following receipts during 2018 Interest income- Ella's salary for the year is $42.000, and her Form W-2 for the year shows income tax withholdings of $5,000 (Federal) and $1,000 (state) and the proper amount of Social Security and Medicare taxes. Besides the items already mentioned, the Coles had the following receipts during 2018 Interest income- State of Colorado general purpose bonds $2,500 IBM bonds 800 Wells Fargo Bank 1,200 $4,500 Federal income tax refund for year 2017 510 Life insurance proceeds paid by Eagle Assurance Corporation 200,000 Inheritance of savings account from Sarah Cole 50,000 Sales proceeds from two ATVs 9,000 For several years, the Coles' household has included David's divorced mother, Sarah, who has been claimed as their dependent. In late December 2017, Sarah unexpectedly died of coronary arrest in her sleep. Unknown to Ella and David, Sarah had a life insurance policy and a savings account (with David as the designated beneficiary of each). In 2017, the Coles purchased two ATVs for $14,000. After several near mishaps, they decided that the sport was too dangerous. In 2018, they sold the ATVs to their neighbor. $4,500 56,400 Additional expenditures for 2018 include: Funeral expenses for Sarah Taxes- Real property taxes on personal residence Colorado state income tax due paid in April 2018 for tax year 2017) Mortgage interest on personal residence (Rocky Mountain Bank) Paid church pledge Contributions to traditional IRAs for Ella and David ($5,500 + 55,500) 310 6,710 6,600 2,400 11,000 In 2018, the Coles made quarterly estimated tax payments of $6,000 (Federal) and $500 (state) for a total of $24,000 (Federal) and $2,000 (state). Relevant Social Security numbers are: David Cole 123-45-6788 Ella Cole 123-45-6787 The Coles do not want to contribute to the Presidential Election Campaign Fund. Also, they want any overpayment of tax refunded to them and not applied toward next year's tax liability. David will have a self-employment tax liability. Required: Using the appropriate forms and schedules, compute the Coles' Federal income tax for 2018. Disregard the alternative minimum tax (AMT) and the various education credits Make realistic assumptions about any missing data. Enter all amounts as positive numbers. If an amount box does not require an entry or the answer is zero, enter "0". If required, round all dollar amounts to the nearest dollar. It may be necessary to complete the tax schedules before completing Form 1040. Use the included tax rates schedules to compute the tax. When computing the tax liability, do not round your immediate calculations. If required, round your final answers to the nearest dollar. Form 1040 Complete the Coles' Form 1040. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2018 OMB No. 1545-0074 IRS Use Only Filing status: Married filing jointly Last name Your first name and initial David R. Cole Your social security number 123-45-6788 Your standard deduction: None Last name If joint return, spouse's first name and initial Ella M. Cole Spouse's social security number 123-45-6787 Spouse standard deduction: Someone can claim your spouse as a dependent Spouse was born before January 2, 1954 Spouse is blind Spouse itemizes on a separate return or you were dual- status alien Yes Full-year health care coverage or exempt (see inst.) Home address (number and street). If you have a P.O. box, see instructions. 1820 Elk Avenue Apt. no. Presidential Election Campaign (see inst.) None City, town or post office, state, and ZIP code. If you have a foreign address, attach Schedule 6. If more than four dependents, see Denver, CO 80202 inst. and here Dependents (see instructions): (2) Social security number (3) Relationship to you (4) if qualifies for (see inst.): (1) First name Last name Child tax credit Credit for other dependents Sign Here Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Your signature Date Your occupation If the IRS sent you an Identity Consultant Protection PIN, enter it here (see inst.) Joint return? See instructions. Keep a copy for your records. Spouse's signature. If a joint Date return, both must sign. Spouse's occupation Dental Hygenist If the IRS sent you an Identity Protection PIN, enter it here Preparer's name PTIN Firm's EIN Preparer's signature Self-Prepared Paid Preparer Use Only Check if: 3rd Party Designee Self-employed Firm's name Phone no. Firm's address BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Form 1040 (2018) Form 1040 (2018) Page 2 Form 1040 (2018) Page 2 1 2a 42,000 2,000 2b 3b 4a Attach Form(s) - 2. Also attach Form(s) W-2G and 1099-R if tax was withheld 5a Wages, salaries, tips, etc. Attach Form(s) W-2......... Tax-exempt interest 2a 2,500 b Taxable interest Qualified dividends 3a b Ordinary dividends IRAs, pensions, and b Taxable amount annuities Social security benefits b Taxable amount Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 46,500 X ................ . .. Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6.... Standard deduction or itemized deductions (from Schedule A). . . . . . . . . . 6 7 Qualified business income deduction (see instructions)............... Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter-O-.... 8.449 X Standard 8 Deduction for- Single or married 9 filing separately, 10 $12,000 11 jointly or Qualifying widow(er), $24,000 Head of household 12 $18,000 . If you checked 13 any box under Standard 14 deduction, see instructions. 15 a Tax (see inst) (check if any from 1 Form(s) 8814 2 Form 4972 30 b Add any amount from Schedule 2 and check here... a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here ..... Subtract line 12 from line 11. If zero or less, enter-0-....... Other taxes. Attach Schedule 4 ........ Total tax. Add lines 13 and 14....... 8.449 X 16 Federal income tax withheld from Forms W-2 and 1099...... 4,000 X 17 Refundable credits: a EIC see inst.) b Sch 8812 c Form 8863 Add any amount from Schedule 5 . 18 Add lines 16 and 17. These are your total payments ...... 18 9,600 Refund 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid .......... 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here 1,151 20a Savings Direct deposit? See instructions. Routing number III|||| Type: Checking d Account number ||||||||||IIIIII 21 Amount of line 19 you want applied to your 2019 estimated tax ... Amount 22 Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions...EEEEEEEE Estimated tax penalty (see instructions) ...... 23 You Owe 23 Go to www.irs.gov/ Form 1040 for instructions and the latest information. Form 1040 (2018) Complete Coles' Schedule 1 below for 2018. SCHEDULE 1 OMB No. 1545-0074 (Form 1040) Additional Income and Adjustments to Income Department of the 2018 Treasury Internal Attach to Form 1040. Attachment Revenue Service Go to www.irs.gov/Form 1040 for instructions and the latest information. Sequence No. 01 Name(s) shown on Form 1040 Your social security number David R. and Ella M. Cole 123-45-6788 Additional 1-9b Reserved....... 1-9b Income 10 Taxable refunds, credits, or offsets of state and local income taxes..... 11 Alimony received ... 61,067 X 19 20b 12 Business income or loss). Attach Schedule C or C-EZ............... 13 Capital gain or loss). Attach Schedule D if required. If not required, check here 14 Other gains or losses). Attach Form 4797..... 15a Reserved ........................ 16a Reserved. . . . . . . . . . . . 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E......... 18 Farm income or (loss). Attach Schedule F.... Unemployment compensation .......... 20a Reserved ...................... 21 Other income. List type and amount 22 Combine the amounts in the far right column. If you don't have any adjustments to income, enter here and include on Form 1040, line 6. Otherwise, go to line 23 23 Educator expenses... 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 ... 25 Health savings account deduction. Attach Form 8889 ......... 26 Moving expenses for members of the Armed Forces. Attach Form 3903........... Deductible part of self-employment tax. Attach Schedule SE..... 28 Self-employed SEP, SIMPLE, and qualified plans 29 Self-employed health insurance deduction .... 30 Penalty on early withdrawal of savings ..... 31a Alimony paid b Recipient's SSN 22 61,067 X Adjustments to Income 32 IRA deduction ........... 11,000 33 34 35 36 Student loan interest deduction ........ Reserved. Reserved ....... Add lines 23 through 35