Nuga and Muriel Atewon are married and file a joint return in 2012. They live at 12345 Hemenway Avenue, Marlboro, MA, 01752. Nuga is a self-employed tax preparer and his SSN is 412-34-5670. Muriel is a manager and her SSN is 412-34-5671. They had the following income and expenses for the year:
Muriel's W-2:
Gross Wages $96,000
Social security tax 4,032
Medicare tax 1,392 Federal withholding tax 18,643
State withholding tax 4,800
Nuga was the sole proprietor of NAMA Tax Service, located at 123 Main Street, Marlboro, MA, 01752, and his business code is 541213. He had the following revenue and expenses:
Revenue: $80,000
Expenses:
Advertising 1,200
Insurance Expense 3,200
Telephone Expense 2,400 Office Rent Expense 18,000
Utilities Expense 4,800
Office Expense 5,000
Depreciation 6,041 must be allocated to the §1231 assets listed next
Nuga had the following business assets:
• Office Furniture: Purchased for $4,950 on May 20, 2010. The equipment is being depreciated over 7-year MACRS 200% declining balance. Nuga sold it on May 15, 2012 for $4,000.
• Office Equipment: Purchased a copier for $13,800 on January 10, 2012. The copier is being depreciated over 5-year MACRS 200% declining balance. Nuga makes no elections for §179 or bonus depreciation.
• Computer & Equipment: Purchased a computer system for $8,900 on January 2, 2011. The computer is being depreciated over 5-year MACRS 200% declining balance. Nuga makes no elections for §179 or bonus depreciation.
Nuga and Muriel had the following other sources of income and deductions:
• Interest from a CD in the amount of $1,385
• Long-term loss carryover from 2011 of $5,000
• Real estate taxes of $8,042
• Home mortgage interest of $14,458
• Charitable contributions in cash over the year of $1,800; all receipts and acknowledgments were received from the charitable organizations.
Nuga has made four (4) quarterly installments of $750 each as estimated taxes for 2012. All estimated tax payments were paid by the due date using 1040-ES coupons.
Prepare Form 1040 and all related schedules, forms, and worksheets for 2012 for Nuga and Muriel Atewon. The Atewons do not donate to the Presidential Election Campaign