Interview Notes

• Joanne is a data entry clerk, age 26, and single.

• Joanne has investment income and a consolidated broker’s statement.

• Joanne is self employed delivering food for Delicious Deliveries on the weekends. She received a Form 1099-NEC and a Form 1099-K. She received additional cash payments of $455.

• Joanne uses the cash method of accounting. She uses business code 492000.

• Joanne provided a statement from the food delivery service indicating the fees paid for the year. These fees are considered ordinary and necessary for the food delivery business: o $150 for insulated box rental o $50 for vehicle safety inspection (required by Delicious Deliveries) o $600 for Delicious Deliveries fees

• Joanne also kept receipts for the following out-of-pocket expenses:

o $100 for tolls o $120 for car washes o $150 for tickets for illegal parking o $150 for snacks and lunches Joanne consumed while working • Joanne’s record keeping application shows she has driven a total of 2,500 miles during and between deliveries. 1,200 miles were driven from 1/01/2022 - 6/30/2022, and 1,300 miles were driven from 7/01/2022 - 12/31/2022. She also drove 1,500 miles between her home and the first and last delivery of each day. o She placed her only vehicle, an SUV, in service on 3/15/2020. The total mileage on her SUV for tax year 2022 was 11,000 miles. Of that, 7,000 were personal miles. Joanne will take the standard business mileage rate.

• Joanne took an early distribution from her IRA in April. She used part of the IRA distribution to pay off her educational expenses.

• Joanne is paying off her student loan from 2017.

• Joanne is working towards her Masters of Education degree to start a new career as an Associate Professor. She took a few college courses this year at an accredited college.

• If Joanne has a refund, she would like it deposited into her checking account.

a. What is the amount Joanne can take as a student loan interest deduction on her form 1040 schedule 1 ____

b. What is the amount of Joannes's lifetime learning credit? ___

c. Which of the following can be claimed as a business expense of Joanne's Schedule C? a. Car Washes b. Tickets for illegal parking c. tolls d. snack and lunches