Tyrese and Alexis Jefferson are married and live at $13071$ Copper Drive, Marquette, MI $49866.$ Tyrese is a self$-$employed insurance claims adjuster $($business activity code $524290),$ and Alexis is the dietitian for the local school district. They choose to file a joint tax return each year.

$1.$ Tyrese represents several national casualty insurance companies on a contract basis. He operates this business on the cash basis. He is paid a retainer and receives additional compensation if the claims he processes for the year exceed a specified number. During $2023,$ Tyrese received $$84,800$ in payments for services rendered as reported on Forms $1099$MISC issued by several payor insurance companies. As an independent contractor, he is responsible for whatever expenses he incurs. Tyrese works out of an office near his home. The office is located at $1202$ Moose Road. He shares Suite $326$ with a financial consultant, and operating expenses are divided equally between them. The suite has a common waiting room with a receptionist furnished and paid by the landlord. Tyrese paid his one$-$half share of the $2023$ expenses as detailed below.

Office rent $$11,600$

Utilities $($includes telephone and fax$)4,300$

Replacement of waiting room furniture on April $223,600$

Renters$$ insurance $($covers personal liability, casualty, and theft$)1,400$

Office expense $($supplies$,$ postage$)740$

New Toshiba copier on February $7300$

Waiting room coffee service $($catered$)280$

Waiting room magazine subscriptions $90$

$2.$ For his own business use, Tyrese purchased a $$2,100$ laptop computer on June $17$ and a $$1,200$ Nikon camera on February $5.$ Except for his vehicle $($see item $2),$ Tyrese uses the $179$ write$-$off option whenever possible. Tyrese has no expenditures for which he is required to file Form $1099$s$.$

$3.$ On January $2,2023,$ Tyrese paid $$31,000($including sales tax$)$ to purchase a gently used Toyota Camry that he uses $92\%$ of the time for business. No trade$-$in was involved in this purchase, and he did not claim any $179$ expensing. Tyrese uses the actual operating cost method to compute his tax deduction. He elects to use the $200\%$ declining$-$balance MACRS depreciation method with a half$-$year convention. His expenses relating to the Camry for $2023$ are as follows:

Gas $$3,500$

Auto insurance $1,700$

Interest on car loan $820$

Auto club dues $325$

Oil changes and lubrication $210$

License and registration $190$

$4.$ In connection with his business use of the Camry, Tyrese paid $$510$ for tolls and $$350$ in fines for traffic violations. In $2023,$ Tyrese drove the Camry $14,352$ miles for business and $1,248$ miles for personal use $($which includes his daily, round$-$trip commute to work$).$

$5.$ Tyrese handles most claim applications locally, but on occasion he must travel out of town. Expenses in connection with these business trips during $2023$ were $$930$ for lodging and $$1,140$ for meals. He also paid $$610$ for business dinners he had with several visiting executives of insurance companies with whom he does business. Tyrese$$s other business$-$related expenses for the year are listed below.

Contribution to H$.$R$.10($Keogh$)$ retirement plan $$8,000$

Premiums on medical insurance covering self and family $($spouse and children$)4,600$

Premiums on disability insurance policy $($to cover loss of income in the event Tyrese is disabled and cannot work$)2,400$

State and local occupation fee $450$

Birthday gift for receptionist $($$$25$ box of Godiva chocolates plus $$3$ for gift wrap$)28$

$6.$ Alexis earns $$36,000$ working as a registered dietician for the Marquette Public School District. The job she holds, manager of the school lunch program, is not classified as full time. Consequently, she is not eligible to participate in the teacher retirement or health insurance programs. Alexis$$s expenditures related to her job are summarized as follows:

Contribution to traditional IRA $$6,000$

Job hunting expense $720$

Continuing education program $350$

Membership dues to the National Association of Dietitians $120$

Subscription to Nutrition Today $90$

$7.$ To work full time and earn a larger salary, Alexis applied for a position as chief dietitian for a chain of nursing homes. According to the director of the recruiting service she hired, the position has not yet been filled, and Alexis is one of the leading candidates. The continuing education program was sponsored by the National Association of Dietitians and consisted of a one$-$day seminar on special diets for seniors. Alexis drove the family Chevrolet Malibu $930$ miles related to her job and $5,200$ miles commuting to work, out of a total of $8,670$ miles driven for the year. The Jeffersons purchased the car on July $11,2021,$ for $$23,400.$

$8.$ Dependents:

The Jeffersons have supported Samuel Barkley $($Alexis$$s widowed father$)$ for several years, appropriately claiming him as a dependent for tax purposes. On December $27,2022,$ Samuel suffered a massive stroke. The doctors did everything they could, but Samuel died in the intensive care unit of Riverwood Hospital on January $8,20$