Thomas Jones (SSN: 123-45-6789) owns a business in which he charges storage fees for warehouse space to customers. The business is a sole proprietorship called Thomas Storage. (Catchy, isnt it?) It is located at 6 Main Street, Anywhere, PA 11111. The company does not own any real estate; it rents an office, warehouse, and all equipment to provide its services. The company uses the cash basis of accounting to record transactions and determine taxable income.

The company collected $145,000 of storage income in cash throughout the year. Included in the $145,000 is $3,000 cash for services that Thomas Storage will provide a customer during January and February of next year.

The company paid cash for advertising in the local paper, the Local Gazette. It paid a total of $1,333 for advertising in the current tax year.

Thomas does all the office work. The office space is rented for $7,888 for the year. All of this was paid during the tax year and is for the tax year. Also, the following items were paid in cash during the tax year for the office space:

Electricity	$891
Water	$300
Gas (heat)	$766
Sewer and trash	$200
Cleaning service	$529
Insurance	$898
Phone/Internet	$567

The insurance coverage runs from February 1 of the current tax year to February 1 of the next tax year.

Thomas is responsible for all the office work and for attracting clients. During the tax year, Thomas purchased the following gifts for clients to show his appreciation for their business:

Pens (with company info)	$201
Television (Mr. Smith)	$532
Fruit basket (Mrs. Jones)	$56
Clock (Mr. Lamp)	$80
Shipping and wrapping	$15

Thomas must use the company vehicles to run various business errands, including meeting with customers. The following information relates to the vehicles that were used at the business during the tax year:

	Vehicle 1	Vehicle 2
Total mileage	15,705	13,010
Business mileage	15,705	6,302
Personal mileage	0	6,708
Gas	$1,470	$1,356
Oil	$450	$300
Insurance	$731	$731
Registration	$50	$50
Speeding tickets	$199	$0
Parking tickets	$0	$50
Parking fees (all business)	$555	$233
Tolls (all business)	$475	$365

Assume the standard mileage rate is $0.53/mile.

During the year, Thomas needed to travel to Las Vegas for a landlord conference. The company paid all his expenses. He spent three days at the conference and two days playing craps at the casino. The expenses of the trip were as follows:

Airfare	$2,000
Hotel (per night)	$200
Total cab fare to/from conference	$100
Meals daily	$110
Limo to go play craps	$300
Registration fee for conference	$600

The office-supplies inventory at the company for the year was as follows:

Beginning of year	$321
Purchases during year	$735
End of year	$472
Used	$584

Thomas is very active in his local political party. During the year, the business donated $300 to a local political candidate.

The business has one employee, Jadee, who take care of the warehouse. Jadees salary for the year is $50,000, and is all paid by December 31 of the current tax year. In addition, the company must pay the following for employing Jadee (also fully paid by December 31 of the current tax year):

FICA and Medicare tax (employer match)	$3,825
Employer unemployment taxes	$210
Workers compensation insurance	$761
Employee health insurance premiums	$8,008

Thomas also went on a trip to learn more about the management of a warehouse, flying to Houston, Texas, for a two-day conference. Unfortunately, he was only able to attend the conference while in Houston, missing out on other sights in the city. The expenses that the company paid for this trip were as follows:

Airfare	$1,444
Hotel per night	$150
Meals per day	$125

In addition, during the tax year, the company paid in cash the following for the warehouse:

Rent	$15,500
Cleaning	$1,645
Electricity	$3,787
Water	$455
Gas (heat)	$7,989
Sewer/trash	$3,078
Phone/Internet	$567
Insurance	$2,899

The insurance coverage runs from February 1 of the current tax year to February 1 of the next tax year.

The final expenses that the company paid by December 31 of the current tax year were as follows:

Accountant for preparation of tax return	$2,190
Lawyer for Thomass divorce	$4,700
Interest charge on business line of credit	$6,439

Requirement

Complete the Schedule C and Schedule SE for Thomas Storage using tax year 2018 forms. Include all calculations and assumptions made during the preparation of the tax return.