Advanced Tax Concepts.

Jason and Judith Zollinger QuickBooks data: Jason and Judith Zollinger II Income and Expenses Maximize Deductions Jason Zollinger SS#: 543-21-0987 DOB: 06/27/1959 Self-Employed, Artist Sole Proprietorship: Jason Zollinger Artist Judith Zollinger SS# 543-21-0986 DOB: 09/18/1962 Accountant TJ and Associates (S Corporation) W2 – Wages: $63,500 Medical: $13,500 (Use the K1 from TJ & Associates generated in Task 1 for Mrs. Zollinger) Dependents: Johnny Zollinger DOB: 02/04/2003 SS#: 234-56-7890 Janey Zollinger DOB: 07/01/1995 SS#: 345-67-8901 Student: Sunshine College – freshman full time Sunshine College EIN: 57-1234567 Janey has not been convicted of any crimes. Jeremy Zollinger DOB: 09/30/2010 SS#: 456-78-9012 Child Care: The couple’s daycare expenses were paid to Ms. Sunshine Florida, Balmy Drive, Sunshine, FL 33040, SSN# 541-77-7777. Half of the daycare bill was for Johnny and half for Jeremy. Rental House: 3456 Abbey Road, Sunshine, FL Purchased 11/30/1998 $200,000 (land basis $20,000) 1,300 square feet Lived in the home until 02/15/2011 Rental period: 1/1/2013 – 12/31/2013 Primary Residence: Purchased 02/15/2011 $325,000 (land basis $80,000) 2,800 square feet Primary Residence Address: 1234 Main Street, Sunshine, FL 33040

Home office: 256 square feet used exclusively by Jason Zollinger. The home’s major rooms are the studio, 5 bedrooms, a living room, a garage, a kitchen, a library, and a sun room. Jason began using the studio in his work as soon as the Zollingers purchased the house. Choose either the simplified method or actual expense method to maximize deductions. Charitable Contributions: The charitable contributions in the attached printout were made by check to the Red Cross and are separate from any amounts given by Mrs. Zollinger’s business. . Purchased 900 shares of E stock on 7/31/2009 @ $30 per share Sold 500 shares of E Stock on 4/15/2013 @ 45 per share Long-Term Capital Loss Carryover from 2012: $36,000 Dividend income: all qualified dividends The taxpayer and spouse wish to designate a contribution to the presidential election campaign fund. Use tax methods that minimize taxable income. All estimated tax payments were made by the appropriate deadlines and were equal in amount.

8:24 PM 10/26/14 Cash Basis

Jason and Judith Zollinger II Profit & Loss

January through December 2013

Page 1 of 2

Jan - Dec 13

Ordinary Income/Expense

Income

Art Sales 98,000.00

Dividend Income

ABC Corporation 1,625.00

E Stock 1,350.00

XYZ Corporation 122.00

Total Dividend Income 3,097.00

Gain (loss) on Investment 7,500.00

Rental 3456 Abbey Road 14,400.00

Salaries and Wages

Judith Zollinger 63,500.00

Judith Zollinger (Health Ins) 13,500.00

Total Salaries and Wages 77,000.00

Total Income 199,997.00

Expense

Charitable Contributions 6,000.00

Child Care 3,000.00

Continuing Education

Judith Zollinger 1,000.00

Total Continuing Education 1,000.00

Health Insurance (TJ and Assoc) 13,500.00

Insurance Expense

Life and Disability Insurance 3,000.00

Total Insurance Expense 3,000.00

Jason Zollinger Artist

Advertising and Promotion 1,960.00

Art Supplies 19,600.00

Bank Service Charges 96.00

Dues and Subscriptions 375.00

Interest Expense 1,100.00

Office Supplies 465.00

Taxes and Licenses 400.00

Telephone Expense 498.00

Total Jason Zollinger Artist 24,494.00

Medical

Doctor CoPay 2,700.00

Prescriptions CoPay 1,200.00

Total Medical 3,900.00

8:24 PM 10/26/14 Cash Basis

Jason and Judith Zollinger II Profit & Loss

January through December 2013

Page 2 of 2

Jan - Dec 13

Personal Residence 1234 Abbey

General Liability Insurance 600.00

Mortgage Interest 1234 Abbey Rd 12,375.00

Property Tax 1234 Abbey Road 4,300.00

Utilities 6,120.00

Total Personal Residence 1234 Abbey 23,395.00

Professional Fees - Accountant 1,200.00

Rental Property 3456 Abbey Road

Depreciation Expense 5,818.00

Insurance 450.00

Mortgage Interest 3456 Abbey Rd 6,500.00

Property Tax 2,450.00

Repairs and Maintenance 600.00

Total Rental Property 3456 Abbey Road 15,818.00

Taxes

Payroll Taxes

Federal Income Tax (FIT)

Estimated payments 16,600.00

Ms. Zollinger 12,500.00

Total Federal Income Tax (FIT) 29,100.00

FICA

Ms. Zollinger 4,857.75

Total FICA 4,857.75

Total Payroll Taxes 33,957.75

Total Taxes 33,957.75 Telephone Expense 300.00

Tuition expense 12,000.00

Total Expense 141,364.75

Net Ordinary Income 58,632.25

Other Income/Expense

Other Income

TJ and Assoc Distribution 2,360.00

Total Other Income 2,360.00

Net Other Income 2,360.00

Net Income 60,992.25