Help to Prepare 1040, Schedule 1, Schedule 2, Schedule B, Schedule C, Schedule D, Form 8849, Schedule SE, Form 4562 Note: This problem is for the 2021 tax year.

1. Beth R. Jordan lives at 2322 Skyview Road, Mesa, AZ 85201. She is a tax accountant with Mesa Manufacturing Company, 1203 Western Avenue, Mesa, AZ 85201 (employer identification number 11-1111111). She also writes computer software programs for tax practitioners and has a part-time tax practice. Beth is single and has no dependents. Beth was born on July 4, 1975, and her Social Security number is 123-45-6785. She did not engage in any virtual currency transactions during the year, and she wants to contribute $3 to the Presidential Election Campaign Fund. Beth received the appropriate coronavirus recovery rebates (economic impact payments); related questions in ProConnect Tax should be ignored.

Para 1 provides you with information generally needed to complete the top part of page 1 of Form 1040. In addition, if the taxpayer had not received the appropriate COVID rebates, we would need to calculate them while completing the return. The rebates would appear as tax credits.

2.The following information is shown on Beth's Wage and Tax Statement (Form W2) for 2021.

Line	Description	Amount
1	Wages, tips, other compensation	$65,000.00
2	Federal income tax withheld	9,500.00
3	Social Security wages	65,000.00
4	Social Security tax withheld	4,030.00
5	Medicare wages and tips	65,000.00
6	Medicare tax withheld	942.50
15	State	Arizona
16	State wages, tips, etc.	65,000.00
17	State income tax withheld	1,954.00

Para 2 Beths employment information is provided. HINT: wages appear on page 1 of the 1040, federal withholding appears on page 2 of the 1040, state withholding (if greater than state sales tax paid), appears on Schedule A if she itemizes deductions.

3.During the year, Beth received interest of $1,300 from Arizona Federal Savings and Loan and $400 from Arizona State Bank. Each financial institution reported the interest income on a Form 1099INT. She received qualified dividends of $800 from Blue Corporation, $750 from Green Corporation, and $650 from Orange Corporation. Each corporation reported Beth's dividend payments on a Form 1099DIV.

Para 3 The first two sentences contain information for two INCOME items: interest and dividend details are reported on Schedule B; the total is transferred to page 1 of the 1040.

4.Beth received a $1,100 income tax refund from the state of Arizona on April 29, 2021. On her 2020 Federal income tax return, she used the standard deduction.

With respect to the state tax refund, application of the tax benefit rule (Chapter 5), dictates that the refund, if taxable income, is to be reported on Schedule 1.

5.Fees earned from her part-time tax practice in 2021 totaled $3,800. She paid $600 to have the tax returns processed by a computerized tax return service.

Income and expenses from self-employment are reported on Schedule C. See additional items in paragraph 7 below.

6.On February 8, 2021, Beth bought 500 shares of Gray Corporation common stock for $17.60 a share. On September 12, 2021, Beth sold the stock for $14 a share.

On January 2, 2021, Beth acquired 100 shares of Blue Corporation common stock for $30 a share. She sold the stock on December 19, 2021, for $55 a share. Both stock transactions were reported to Beth on Form 1099B; basis was not reported to the IRS.

Beth bought a used sport utility vehicle for $6,000 on June 5, 2021. She purchased the vehicle from her brother-in-law, who was unemployed and was in need of cash. On November 2, 2021, she sold the vehicle to a friend for $6,500.

These are all property transactions. If reportable, the details appear on Form 8949; the totals then get transferred to Schedule D. The Schedule D total gets transferred to Form 1040, page 1.

7.During the year, Beth records revenues of $16,000 from the sale of a software program she developed. Beth incurred the following expenses in connection with her software development business.

Cost of personal computer $7,000; Cost of printer $2,000; Furniture $3,000; Supplies $650; Fee paid to computer consultant $3,500 Beth elected to expense the maximum portion of the cost of the computer, printer, and furniture allowed under the provisions of 179. These items were placed in service on January 15, 2021, and used 100% in her business.
Income and expenses from self-employment are reported on Schedule C. Since Depreciation it claimed, it should be supported by completing Form 4562; the total gets transferred to the income statement on Schedule C. See additional items in paragraph 5 above. Please be certain to see the information provided above Form 4562 in Cengage. Following is information regarding the calculation of line 11 from Form 4562: Line 11: The total cost that can be deducted is limited to the taxpayer's taxable income from the active conduct of a trade or business during the year. A person is considered to actively conduct a trade or business only if he or she meaningfully participates in its management or operations. A mere passive investor is not considered to actively conduct a trade or business. Enter the smaller of line 5 or the total taxable income from any trade or business that the taxpayer actively conducted, computed without regard to any section 179 expense deduction, the deduction for one-half of self-employment taxes under section 164(f), or any net operating loss deduction. Also include all wages, salaries, tips, and other compensation earned as an employee (from Form 1040, line 7). Do not reduce this amount by unreimbursed employee business expenses. If you are married filing a joint return, combine the total taxable incomes for the taxpayer and their spouse. The amount is $80,050 ($65,000 wages + $3,050 schedule C + $12,000 add back section 179 deduction).

8.Although her employer suggested that Beth attend an in-person conference on current developments in corporate taxation, Beth was not reimbursed for the travel expenses of $1,420 she incurred in attending the meeting. The $1,420 included $200 for the cost of meals.

Prior to the TCJA, these expenses may have been deductible. Between 2018 and 2025, they are not.

9.During the year, Beth paid $300 for prescription medicines and $2,875 for doctor bills and hospital bills. Medical insurance premiums were paid by her employer. Beth paid real property taxes of $1,766 on her home. Interest on her home mortgage (Valley National Bank) was $3,845, and credit card interest was $320. Beth contributed $2,080 in cash to various qualifying charities during the year. Professional dues and subscriptions totaled $350.

These personal expenses, if deductible, would appear on Schedule A.

10.Beth paid estimated taxes of $1,000.

These are federal estimated income tax payments and appear on the payment section of Form 1040.

Use the 2021 Tax Rate Schedules to compute the tax. (Note: Because the tax rate schedules are used instead of the tax tables, the amount of tax computed may vary slightly from the amount listed in the tables.) Form 1040 Form 1040 16 Tax (see instructions). Check if any from Form(s): 8814249723 18 Add lines 16 and 17 19 Nonrefundable child tax credit or credit for other dependents from Schedule 8812 .... 22 Subtract line 21 from line 18. If zero or less, enter 0 23 Other taxes, including self-employment tax, from Schedule 2, line 21 ........... 24 Add lines 22 and 23 . This is your total tax .................... 25 Federal income tax withheld from: ... ....................... a Form(s)w2 b Form(s) 1099 c Other forms (see instructions) .................. 25c If you have a 262021 estimated tax payments and amount applied from 2020 return ........... qualifying child, Form 1040 28 Refundable child tax credit or additional child tax credit from Schedule 8812 29 American opportunity credit from Form 8863 , line 8 30 Recovery rebate credit. See instructions 31 Amount from Schedule 3, line 15 32 Add lines 27a and 28 through 31 . These are your total other payments and refundable credits 32 36 Amount of line 34 you want applied to your 2022 estimated Designee \begin{tabular}{l|l|l|l|} & Designee's & Phone & nersonal identification \\ Mame & Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and \\ Here the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than \\ taxpayer) is based on all information of which preparer has any knowledge. \end{tabular}