The Paynes file 1040, Sch C, SE Tax

Cliff Payne 123-45-6789 2/1/1970

Susan Payne 987-65-4321 Spouse 3/1/1972

Mitchell Payne 456-23-4578 Son 1/1/2003

Brian Payne 951-69-1548 Son 7/1/2004

Dr. Cliff Payne determines that his deductible expenses associated with his dental practice are as follows:

Salaries including FICA ($5,000 are unpaid at year-end) $165,000

Building rent 24,000

Depreciation of dental and office furnishings and equipment 52,000

Insurance (malpractice and of dental equipment

and office furnishings and equipment) 22,000

Dental supplies 16,000

Office supplies 3,000

Investigation expenses to purchase another dental practice 6,000

Contribution to State Senate campaign fund of Tom Smith 1,000

Legal expenses associated with patient lawsuit 4,000

Fine imposed by city for improper disposal of medical waste 3,000

Dues paid to The Dental Society 10,000

Draw by Dr. Payne for living expenses ($5,000 monthly) 60,000

Accounting expense 3,000

Susan Payne is an Attorney received a W-2 for $150,000

Susans mother, Joan Smith a retired school teacher 1/1/1940, lives with Cliff and Susan year round and receives $1,250 of social security and is covered by Medicare. Joan Smith requires round the clock medical and physical attention. Joan Smith has a long term care policy that covers all of her round the clock expenses, Joan paid for the policy with personal funds while she was a school teacher.

Mortgage interest paid $14,000

Property taxes paid $22,000

Charitable contributions $450 cash, $2,000 clothing

Susan unreimbursed employee expenses $750