Question

	2018 Form 1040
Gross Income
Salary	65,000
Interest Income	1,700
Dividend Income	2,200
State Income Tax Refund	1,100
Schedule C Net Income	3,050
Schedule D Recognized Gain (Loss)	1,200
Gross Income	74,250
Deductions for AGI:
Self-employment Tax Deduction	215
Deductions For AGI	215
Adjusted Gross Income	74,035
Deductions from AGI:
Medical Expense Deduction	0
Sales Tax Deduction	0
State Income Tax Deduction	1,954
Real Estate Tax Deduction	1,766
Mortgage Interest Expense Deduction	3,845
Credit Card Interest Expense Deduction	0
Charitable Contribution Deduction	2,080
Total Itemized Deductions	9,645
Standard Deduction	0
Greater of Standard or Itemized	9,645
Qualified Business Income Deduction	0
Taxable Income	64,390
Tax Liability On Dividend Income	330
Tax Liability - Ordinary Income	9,621
Self-Employment Tax	431
Less: FIT Withholding/estimates	10,500
Net Balance	-118
Supplemental Schedule: Schedule C
Part time tax practice revenues	16,000
Software writing business royalties	3,800
Total Gross Income	19,800
Business expenses:
Part time tax practice processing fee	600
Cost of personal Computer	7,000
Cost of printer	2,000
Furniture	3,000
Supplies	650
Fee paid to consultant	3,500
Total Business Expense	16,750
SCHEDULE C NET INCOME	3050
SCHEDULE D - SHORT TERM TRANSACTIONS
	Adjusted Realized	Adjusted Basis
Gray Stock	7,000	8,800
Utility Vehicle	6,500	6,000
Blue Stock	5,500	3,000
Schedule SE - Self Employment Tax
	Social Security	Medicare
Ceiling Amount	0
Less: FICA	0
Net Ceiling	0
Schedule C Net Income	3,050
Net Self Employment Income (92.35%)	2,817
Lesser of net ceiling or net self employment income	2,817
Tax Rate	.124
Self Employment Tax	349
Total Self Employment tax	431
SELF EMPLOYMENT TAX DEDUCTION
Self employment tax	431
2012 Employer portion	.5000
Self Employment deduction	215

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’s birthday is July 4, 1972, and her Social Security number is 123-45-6789. She wants to contribute $3 to the Presidential Election Campaign Fund.

The following information is shown on Beth’s Wage and Tax Statement (Form W–2) for 2018.

Line	Description	Amount
1	Wages, tips, other compensation	$65,000.00
2	Federal income tax withheld	10,500.00
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

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 1099–INT. 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 1099–DIV.

Beth received a $1,100 income tax refund from the state of Arizona on April 29, 2018. On her 2017 Federal income tax return, she reported total itemized deductions of $8,200, which included $2,200 of state income tax withheld by her employer.

Fees earned from her part-time tax practice in 2018 totaled $3,800. She paid $600 to have the tax returns processed by a computerized tax return service.

On February 8, 2018, Beth bought 500 shares of Gray Corporation common stock for $17.60 a share. On September 12, 2018, Beth sold the stock for $14 a share

Beth bought a used sport utility vehicle for $6,000 on June 5, 2018. She purchased the vehicle from her brother-in-law, who was unemployed and was in need of cash. On November 2, 2018, she sold the vehicle to a friend for $6,500.

On January 2, 2018, Beth acquired 100 shares of Blue Corporation common stock for $30 a share. She sold the stock on December 19, 2018, for $55 a share.

During the year, Beth records revenues of $16,000 from the sale of a software program she developed. Beth incurred the following expenditures 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, 2018, and used 100% in her business.

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

During the year, Beth paid $300 for prescription medicines and $2,875 for doctor bills and hospital bills. Medical insurance premiums were paid for her 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 interest to credit card companies was $320. Beth contributed $2,080 to various qualifying charities during the year. Professional dues and subscriptions totaled $350.

Beth paid estimated taxes of $1,000.

Part 1—Tax Computation

Compute the net tax payable or refund due for Beth R. Jordan for 2018. If you use tax forms for your solution, you will need Forms 1040, 2106–EZ, and 4562 and Schedules C, D, and SE.

My answer and schedules for 2018 are provided in table above, while the AGI are correct, the TAXABLE INCOME and NET BALANCE are incorrect. I am not sure what I am missing

Answer 1