53. Janice Morgan, age 24, is single and has no dependents. She is a freelance writer. In January 2019, Janice opened her own office located at 2751 Waldham Road, Pleasant Hill, NM 88135. She called her business Writers Anonymous. Janice is a cash basis taxpayer. She lives at 132 Stone Avenue, Pleasant Hill, NM 88135. Her Social Security number is 123-45-6782. Janice's parents continue to provide health insurance for her under their policy. Janice did not engage in any virtual currency transactions during the year and wants to contribute to the Presidential Election Campaign Fund. During 2019, Janice reported the following income and expense items connected with her business. Income from sale of articles $85,000 Rent 16,500 Utilities 7,900 Supplies 1,800 Insurance 5,000 Travel (including meals of $1,200) 3,500 Janice purchased and placed in service the following fixed assets for her business. Janice wants to elect immediate expensing under section 179*, if possible. Furniture and fixtures (new) costing $21,000 on January 10 Computer equipment (new) costing $12,400 on July 28 Janice's itemized deductions include: State income tax $2,950 Home mortgage interest paid to First National Bank 6,000 Property taxes on home 2,500 Charitable contribution to her alma mater, State College 1,200 Janice did not keep a record of the sales tax she paid. The amount allowed by the sales tax table is $437. Janice reports interest income of $4,000 on certificates of deposit at Second National Bank. Janice makes estimated tax payments of $3,000 for 2019. Compute Janice Morgan's 2019 Federal income tax payable (or refund due). If you use tax forms for your computations, you will need Forms 1040, 4562, 8995, and Schedules 1, 2, 3, A, B, C, and SE. (Tax forms are not necessary) *Section 179 of the IRC allows businesses to take an immediate deduction for business expenses related to depreciable assets such as equipment, vehicles, and software. This allows businesses to lower their current-year tax liability rather than capitalizing an asset and depreciating it over time in future tax years.
53. Janice Morgan, age 24, is single and has no dependents. She is a freelance writer. In January 2019, Janice opened her own office located at 2751 Waldham Road, Pleasant Hill, NM 88135. She called her business Writers Anonymous. Janice is a cash basis taxpayer. She lives at 132 Stone Avenue, Pleasant Hill, NM 88135. Her Social Security number is 123-45-6782. Janice's parents continue to provide health insurance for her under their policy. Janice did not engage in any virtual currency transactions during the year and wants to contribute to the Presidential Election Campaign Fund.
During 2019, Janice reported the following income and expense items connected with her business.
Income from sale of articles $85,000
Rent 16,500
Utilities 7,900
Supplies 1,800
Insurance 5,000
Travel (including meals of $1,200) 3,500
Janice purchased and placed in service the following fixed assets for her business. Janice wants to elect immediate expensing under section 179*, if possible.
- Furniture and fixtures (new) costing $21,000 on January 10
- Computer equipment (new) costing $12,400 on July 28
Janice's itemized deductions include:
State income tax $2,950
Home mortgage interest paid to First National Bank 6,000
Property taxes on home 2,500
Charitable contribution to her alma mater, State College 1,200
Janice did not keep a record of the sales tax she paid. The amount allowed by the sales tax table is $437.
Janice reports interest income of $4,000 on certificates of deposit at Second National Bank. Janice makes estimated tax payments of $3,000 for 2019.
Compute Janice Morgan's 2019 Federal income tax payable (or refund due). If you use tax forms for your computations, you will need Forms 1040, 4562, 8995, and Schedules 1, 2, 3, A, B, C, and SE. (Tax forms are not necessary)
*Section 179 of the IRC allows businesses to take an immediate deduction for business expenses related to
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