Thomas Jones $(SSN$: $123-45-6789)$ owns a business $in$ which $he$ charges storage fees for warehouse space $to$ customers. The business $is$ a sole proprietorship called $Thomas$ Storage.$(Catchy,$ isn$tit?)Itis$ located $at6$ Main Street, Anywhere, $PA11111.$ The company does not own any real estate; $it$ rents $an$ office, warehouse, and all equipment $to$ provide its services. The company uses the cash basis $of$ accounting $to$ record transactions and determine taxable income.

The company collected $$145,000of$ storage income $in$ cash throughout the year. Included $in$ the $$145,000is$ $$3,000$ cash for services that Thomas Storage will provide a customer during January and February $of$ next year. The company paid cash for advertising $in$ the local paper, the Local Gazette. $It$ paid a total $of$ $$1,333$ for advertising $in$ the current tax year. Thomas does all the office work. The office space $is$ rented for $$7,888$ for the year. All $of$ this was paid during the tax year and $is$ for the tax year. Also, the following items were paid $in$ cash during the tax year for the office space: Electricity

$$891$

Water

$$300$

Gas $(heat)$

$$766$

Sewer and trash

$$200$

Cleaning service

$$529$

Insurance

$$898$

Phon$\frac{e}{\text{I}}$nternet

$$567$

The insurance coverage runs from February $1of$ the current tax year $to$ February $1of$ the next tax year. Thomas $is$ responsible for all the office work and for attracting clients. During the tax year, Thomas purchased the following gifts for clients $to$ show his appreciation for their business:

Pens $(with$ company info$)$

$$201$

Television $(Mr.$ Smith$)$

$$532$

Fruit basket $(Mrs.$ Jones$)$

$$56$

Clock $(Mr.$ Lamp$)$

$$80$

Shipping and wrapping

$$15$

Thomas must use the company vehicles $to$ run various business errands, including meeting with customers. The following information relates $to$ the vehicles that were used $at$ the business during the tax year:

Vehicle $1$

Vehicle $2$

Total mileage

$15,705$

$13,010$

Business mileage

$15,705$

$6,302$

Personal mileage

$0$

$6,708$

Gas

$$1,470$

$$1,356$

Oil

$$450$

$$300$

Insurance

$$731$

$$731$

Registration

$$50$

$$50$

Speeding tickets

$$199$

$$0$

Parking tickets

$$0$

$$50$

Parking fees $(all$ business$)$

$$555$

$$233$

Tolls $(all$ business$)$

$$475$

$$365$

Assume the standard mileage rate $is$ $$\frac{0\mathrm{.}53}{m}$ile.

During the year, Thomas needed $to$ travel $to$ Las Vegas for a landlord conference. The company paid all his expenses. $He$ spent three days $at$ the conference and two days playing craps $at$ the casino. The expenses $of$ the trip were $as$ follows:

Airfare

$$2,000$

Hotel $(per$ night$)$

$$200$

Total cab fare $t\frac{o}{f}$rom conference

$$100$

Meals daily

$$110$

Limo $togo$ play craps

$$300$

Registration fee for conference

$$600$

The office$-$supplies inventory $at$ the company for the year was $as$ follows:

Beginning $of$ year

$$321$

Purchases during year

$$735$

End $of$ year

$$472$

Used

$$584$

Thomas $is$ very active $in$ his local political party. During the year, the business donated $$300to$ a local political candidate. The business has one employee, Jadee, who take care $of$ the warehouse. Jadee$s$ salary for the year $is$ $$50,000,$ and $is$ all paid $by$ December $31of$ the current tax year. $In$ addition, the company must pay the following for employing Jadee $(also$ fully paid $by$ December $31of$ the current tax year$)$:

FICA and Medicare tax $(employer$ match$)$

$$3,825$

Employer unemployment taxes

$$210$

Worker$s$ compensation insurance

$$761$

Employee health insurance premiums

$$8,008$

Thomas also went $on$ a trip $to$ learn more about the management $of$ a warehouse, flying $to$ Houston, Texas, for a two$-$day conference. Unfortunately, $he$ was only able $to$ attend the conference while $in$ Houston, missing out $on$ other sights $in$ the city. The expenses that the company paid for this trip were $as$ follows:

Airfare $$1,444$

Hotel per night $$150$

Meals per day $$125$

$In$ addition, during the tax year, the company paid $in$ cash the following for the warehouse:

Rent

$$15,500$

Cleaning

$$1,645$

Electricity

$$3,787$

Water

$$455$

Gas $(heat)$

$$7,989$

Sewe$\frac{r}{t}$rash

$$3,078$

Phon$\frac{e}{\text{I}}$nternet

$$567$

Insurance

$$2,899$

The insurance coverage runs from February $1of$ the current tax year $to$ February $1of$ the next tax year. The final expenses that the company paid $by$ December $31of$ the current tax year were $as$ follows: Accountant for preparation $of$ tax return $$2,190$

Lawyer for Thomas$s$ divorce $$4,700$

Interest charge $on$ business line $of$ credit $$6,439$ Requirement

Complete the Schedule $C$ and Schedule $SE$ for Thomas Storage using tax year $2018$ forms. Include all calculations and assumptions made during the preparation $of$ the tax return. $(Tax$ law citations are not required$).$ You will $be$ able $to$ download $PDF$ forms from the IRS.