PREPARE: 1040, Schedule A, C, and SE for Form 1040, and Forms 2106 and 8829 (Assume no depreciation for this problem and that no estimated taxes were paid by the couple)
George Details:
George worked as a Salesman for Toyboat, Inc.
Salary: $80,000 ($8,500 of Fed Income Taxes & $1,800 of State Income Withheld)
Expense reimbursement of $5,000 from Employer for his employee business expenses
Provide adequate expense records to employer and Return any excess reimbursement
None of the reimbursement was for Meals/Entertainment
Employer provides George with Medical Insurance worth $7,200 per year
Personal Vehicle 24,000 miles during the year – Placed car in service on June 1, 2010.
Logged 18,000 miles for sales calls to customer office, and remainder was personal mileage
Uses standard Mileage rate method and the Business Miles driven are evenly during the year
Purchased two season tickets; $4,000 - Takes a customer to every game; discuss some business before – during, and after games.
Client lunches, $1,500 on business meals
Took 5-day Business trip, Ended early so he spent the remaining 2-days sightseeing:
Details of 5-day Business Trip Expenses: Airfare $200
Lodging $85 per day
Meals $50 per day
Taxicabs $20 per day
Marge Details:
Self employed; repairs rubber toy boats in basement of home
25% of the house’s square footage (basement)
Business Code: 811490
Details of Income & Expenses: Income from rubber toys $15,000
Cost of Supplies $ 5,000
Contract Labor $ 3,500
Business Calls $ 500
Couples Home Cost $150,000 – which the cost of the land was $20,000
The FMV of the house is $225,000 and Depreciable over a 39-yr recovery period
Details of Additional Costs: Utility Bills $2,000
Real Estate Taxes $2,500
Mortgage Interest $4,500
Cash Charitable Contributions $3,500
