Question
Use the following information to prepare the tax return of Robert E. Dunkin using Form 1040, Schedule A, Schedule C, Schedule SE, and Form 8829.
Use the following information to prepare the tax return of Robert E. Dunkin using Form 1040, Schedule A, Schedule C, Schedule SE, and Form 8829. This problem is suitable for manual preparation or computer software application. Robert E. Dunkin (SSN 392-48-6844) operates a consulting business out of his home located at 293 E. Main Street, Lafayette, LA 70503. The IRS business code (Schedule C, line B) is 541600. He uses the cash basis and materially participates in the business. During 2012, his business generated income of $55,088 and he had the following expenses: advertising, Si 50; depreciation expense, $1,630; office expense, $695; and supplies, $450. Rob drove his personal automobile 523 business miles during 2012. He uses the standard mileage rate method. Rob uses one of the rooms in his house regularly and exclusively as a home office. The size of the room used as an office is 224 square feet. The total square footage of his home is 2,800 square feet. The expenses of operating the home during the year included utilities, $3,500; insurance, $250; home mortgage interest, $8,500; and real estate taxes, $3,205. The depreciable basis in the home is $110,840 ($130,840 minus $20,000 for the land). His depreciation percentage (Form 8829, line 40) is 2.564%. Complete Schedule C and Form 8829 for Rob Dunkin. Then complete Robs Schedule SE. Based on your answers to Part a., what is the maximum amount Rob can contribute to a SEP plan for 2012? How long does Rob have to set up a SEP and make his 2012 SEP contribution? Complete Robs Form 1040 assuming that he makes the maximum contribution allowed to his SEP for 2012. Rob files as single with no dependents. He is 47 years old and made $8,000 of estimated federal income tax payments for the 2012 tax year. This amount is reported in the Payments section on Form 1040. Robs only other source of gross income is SI, 120 of taxable interest and his only other deduction for AGI is $3,600 that he pays during the year for health insurance. In addition to the non-home office portion of the interest and taxes on his home, his other itemized deductions include S2,000 of state income taxes paid during the year, $1,300 of cash contributions to his alma mater, and $150 of noncash contributions to Goodwill. Rob signs and dates his return on April 11, 2013.
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