Ashley Panda lives at 1310 Meadow Lane, Wayne, OH 43466, and her Social Security

Question

Ashley Panda lives at 1310 Meadow Lane, Wayne, OH 43466, and her Social Security number is 123-45-6789. Ashley is single and has a 20-year-old son, Bill. His Social Security number is 111-11-1111. Bill lives with Ashley, and she fully supports him. Bill spent 2014 traveling in Europe and was not a college student. He had gross income of $4,655in 2014. Ashley owns the Enterprises, LLC sole proprietorship, a data processing service (98-7654321), which is located at 456 Hill Street, Wayne, OH 43466. The business activity code is 514210. Her 2014 Form 1040, Schedule C for Panda Enterprises shows revenuesof $315,000, office expenses of $66,759, employee salary of $63,000, employee payrolltaxes of $3,560, meals and entertainment expenses (before the 50% reduction) of $22,000, and rent expense of $34,000. The rent expense includes payments related torenting an office ($30,000) and payments related to renting various equipment ($4,000). There is no depreciation because all depreciable equipment owned has beenfully depreciated in previous years. No fringe benefits are provided to the employee. Ashley personally purchases health insurance on herself and Bill. The premiums are$23,000 per year. Ashley has an extensive stock portfolio and has prepared the following analysis:

Beige 10 shares, purchased on10/18/13, date sold 10/11/14,pre-share cost $80,pre-share selling price $ 74,toal dividends $30.

Garland 30 Shares ,purchased on 10/11/07, date sold 10/11/14, pre-share cost43, pre share selling price 157 , total dividends 70.

Puce 15shares, purchased on 3/10/14, date sold 8/11/14, pre-share cost 62, pre share selling price 33, total dividends 45 .

Ashley had $800 of interest income from State of Ohio bonds and $600 of interest income on her Wayne Savings Bank account. She paid $25,000 of alimony to her formerhusband. His Social Security number is 123-45-6788. Ashley itemizes her deductions and had the following items, which may be relevant to her return: Item Amount Comment Unreimbursed medical expenses forAshley (all for visits to doctors)$1,786 Does not include health insurancepremiums.State income taxes paid 1,830Real property taxes on personalresidence3,230Interest paid on home mortgage(Form 1098)8,137 The loan is secured by the residenceand was incurred when the homewas purchased.Charitable contributions 940 Cash paid to Ashley's church.Sales taxes 619 Amount per sales tax table. Ashley made a $30,000 estimated Federal income tax payment, does not want any of her taxes to finance presidential elections, has no foreign bank accounts or trusts, and wants any refund to be applied against her 2015 taxes.Compute Ashley's net tax payable or refund due for 2014. If you use tax forms for your computations, you will need Form 1040 and its Schedules A, C, D, and SE and Form 8949.

Check figure from book publisher is a $329 refund.

Explanation / Answer

Answer

Income Tax return

  

* Bill Income does not include Ashley income, Because Bill is more than 19 years and Bill is not a student.

** Income from share trading

Share name Qty Purchase value sale value Dividend Net profit/loss

Beige 10 800 740 30 -30

Garland 30 1290 4710 70 3490

Puce 15 930 495 45 -390

Net Income 3070

Particulars Amount ($) Amount ($) Amount ($) Bill income 4655 * 0 Bussiness Income 315000 Office Exp. 66759 Employee Salary 63000 Employee Pay roll taxes 3560 Meal & Entertainment Exp. 22000*50% 11000 Office rent 30000 Equipment rent 4000 178319 Net Income from business 136681 136681 Income from share trading** (capital gain) 3070 Income from other sources Intt from Ohio Bond 800 Intt from saving Bank account 600 1400 Total Income 141151 Less deductions Health Insurance premium 23000 Alimony to former husband 25000 Unremburshed Medical Exp 1786 State Income Tax 1830 Real Property tax 3230 Intt paid on Home Loan 8137 Charity to church 940 Sales Tax 619 64542 Taxable income 76609 Standard deduction 7750 Net Taxable income 68859 Fedral Income tax @25% 17215 Tax deposit 30000 Refund due 12785

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