Reference no: EM132722464
Question - 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$85,000Rent16,500Utilities7,900Supplies1,800Insurance5,000Travel (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 § 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$2,950Home mortgage interest paid to First National Bank6,000Property taxes on home2,500Charitable contribution to her alma mater, State College1,200
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. She made estimated tax payments of $3,000 for 2019.
Required - Compute Janice Morgan's 2019 Federal income tax payable (or refund due).
Make realistic assumptions about any missing data.
If an amount box does not require an entry or the answer is zero, enter "0".
Enter all amounts as positive numbers.
The taxpayer wants $3 to go to the Presidential Election Campaign.
It may be necessary to complete the other tax forms and schedules before completing Form 1040.
Use the tax schedules (not the tax tables) included with this problem to compute the tax.
If required, round your final answers to the nearest dollar.