Problem:
Janice Morgan, age 32, is single and has no dependents. She is a freelance writer. In January 2012, Janice opened her own office located at 22751 Waldham Road, Pleasant Hill, NM 88135. She called her business Writers Anonymous. Janice is a cash basis taxpayer. She lives at 132 Stone Avenue, Pleasant Hill, NM 88135. Her Social Security number is 123-45-6789. Janice wants to contribute to the Presidential Election Campaign Fund. During 2012, Janice had the following income and expense items connected with her business:
Income from sale of articles $85,000
Rent 16,500
Utilities 7,900
Supplies 1,800
Insurance 5,000
Travel (including meals of $1,200) 3,500
Janice purchased and placed in service the following fixed assets for her business:
Furniture and fixtures (new) costing $17,000 on January 10, 2012.
Computer equipment (new) costing $40,000 on July 28, 2012.
Janice elected immediate expending under Section 179.
Janice's itemized deductions are as follows:
State income tax $3,000
Home mortgage interest 6,000
Property taxes on home 1,500
Charitable contributions 1,200
Janice did not keep a record of the sales tax she paid. The amount from the sales tax table is $437
Janice has interest income of $20,000 on certificates of deposit at Second Bank. Janice makes estimated tax payments of $3,00 for 2012.
Compute Janice Morgan's 2012 Federal income tax payable (or refund due).