Question

Note: This problem is for the 2018 taxyear.

Janice Morgan, age 24, is single and has no dependents. She is afreelance writer. In January 2018, Janice opened her own officelocated at 2751 Waldham Road, Pleasant Hill, NM 88135. She calledher business Writers Anonymous. Janice is a cash basis taxpayer.She lives at 132 Stone Avenue, Pleasant Hill, NM 88135. Her SocialSecurity number is 123-45-6789. Janice's parents continue toprovide health insurance for her under their policy. Janice wantsto contribute to the Presidential Election Campaign Fund.

During 2018, Janice reported the following income and expenseitems 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 fixedassets for her business. Janice wants to elect immediate expensingunder § 179, if possible.

• Furniture and fixtures (new) costing $21,000 on January10.
• 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. Theamount from the sales tax table is $437.
Janice reports interest income of $4,000 on certificates of depositat Second National Bank. She made estimated tax payments of $3,000for 2018.

Required:
Compute Janice Morgan’s 2018 Federal income tax payable (or refunddue) by providing the following information that would be reportedon Form 1040 and Schedules A, B, C, and SE.

• Make realistic assumptions about any missing data.
• If an amount is zero, enter "0".
• Enter all amounts as positive numbers.
• When computing the tax liability, do not round your immediatecalculations.
• If required, round your final answers to the nearestdollar.

• Provide the following that would be reported on Janice's Form1040:

  1. Filing status: The taxpayers' filingstatus:
  

  2. Calculate taxable gross income.
  $

  3. Calculate the total adjustments forAGI.
  $

  4. Calculate adjusted gross income.
  $

  5. Calculate the greater of the standarddeduction or itemized deductions.
  $

  6. Calculate the qualified busies incomededuction.
  $

  7. Calculate total taxable income.
  $

  8. Calculate the income tax liability.
  $

  9 Calculate SE taxes due.
  $

  10. Calculate the total tax creditsavailable.
  $

  11. Calculate total withholding and taxpayments.
  $

  12. Calculate the amount overpaid(refund):
  $

  13. Calculate the amount of taxes owed:
  $

  Provide the following that would be reported on Janice'sSchedule A:

  1. Calculate the deduction allowed for medicaland dental expenses.
  $

  2. Calculate the deduction for taxes.
  $

  3. Calculate the deduction for interest.
  $

  4. Calculate the charitable deductionallowed.
  $

  5. Calculate total itemized deductions.
  $Provide the following that would be reported on Janice's ScheduleB:

  1. Calculate the interest amount:
  $

  2. Calculate the ordinary dividends:
  $

  Provide the following that would be reported on Janice'sSchedule C:

  1. Calculate income from sales:
  $

  2. Calculate total expenses:
  $

  3. Calculate net profit or loss
  $ Provide the following that would be reported on Janice's Form4562.

  Click here to access Exhibit 8.1 and the depreciation tables inthe textbook.

  1. Calculate the total deprecation for thefurniture and fixtures:
  $

  2. Calculate the total depreciation for thecomputer equipment.
  $

  Provide the following that would be reported on Janice'sScheduled SE. When computing the self-employment tax liability, donot round your calculations. Round your final answers to thenearest dollar. Use rounded amount when determining the deductionfor self-employment tax.

  1. Calculate the self-employmentliability:
  $

  2. Calculate the eduction for self-employmenttax:
  $

  2018 Tax Rate Schedules

  Use the 2018 Tax Rate Schedules to compute the tax.

  Note: Because the tax rate schedules are used instead of the taxtables, the amount of tax computed may vary slightly from theamount listed in the tables. This variation occurs because the taxfor a particular income range in the tax table is based on themidpoint amount.

  2018 Tax Rate Schedules
  Single—Schedule X											Head of household—Schedule Z
  If taxable incomeis: Over—		But not over—		The taxis:				of the amount over—			If taxable incomeis: Over—		But not over—		The taxis:				of the amount over—
  $0		$9,525		. . . . . .		10%		$0			$0		$13,600		. . . . . .		10%		$0
  9,525		38,700		$952.50	+	12%		9,525			13,600		51,800		$1,360.00	+	12%		13,600
  38,700		82,500		4,453.50	+	22%		38,700			51,800		82,500		5,944.00	+	22%		51,800
  82,500		157,500		14,089.50	+	24%		82,500			82,500		157,500		12,698.00	+	24%		82,500
  157,500		200,000		32,089.50	+	32%		157,500			157,500		200,000		30,698.00	+	32%		157,500
  200,000		500,000		45,689.50	+	35%		200,000			200,000		500,000		44,298.00	+	35%		200,000
  500,000		. . . . . .		150,689.50	+	37%		500,000			500,000		. . . . . .		149,298.00	+	37%		500,000
  Married filing jointly or Qualifyingwidow(er)—Schedule Y-1											Married filing separately—ScheduleY-2
  If taxable incomeis: Over—		But not over—		The taxis:				of the amount over—			If taxable incomeis: Over—		But not over—		The taxis:				of the amount over—
  $0		$19,050		. . . . . .		10%		$0			$0		$9,525		. . . . . .		10%		$0
  19,050		77,400		$1,905.00	+	12%		19,050			9,525		38,700		$952.50	+	12%		9,525
  77,400		165,000		8,907.00	+	22%		77,400			38,700		82,500		4,453.50	+	22%		38,700
  165,000		315,000		28,179.00	+	24%		165,000			82,500		157,500		14,089.50	+	24%		82,500
  315,000		400,000		64,179.00	+	32%		315,000			157,500		200,000		32,089.50	+	32%		157,500
  400,000		600,000		91,379.00	+	35%		400,000			200,000		300,000		45,689.50	+	35%		200,000
  600,000		. . . . . .		161,379.00	+	37%		600,000			300,000		. . . . . .		80,689.50	+	37%		300,000