Question

Very lost on the whole business side of doing taxes, could use some help.

Advanced Scenario 8: Ramon Torrez Directions Using the tax software, complete the tax retum, including Form 1040 and all appropri- ate forms, schedules, or worksheets. Answer the questions following the scenario. Note: When entering Social Security numbers (SSNS) or Employer Identification Numbers (EINS), replace the Xs as directed, or with any four digits of your choice. For the purpose of these scenario questions only, ignore the VITA/TCE total business expense limitation for Schedule C. Interview Notes • Ramon works as a self-employed ride share driver. Ramon is a cash-basis taxpayer who materially participates in the operation of his business. He did not make any payments that would require him to file Form 1099. - Ramon uses business code 485990. - Ramon had no prior year unallowed losses. He received Form 1099-MISC and Form 1099-K from the ride share company. He had an additional $2,745 in cash tip income from individual customers NOT included on the Forms 1099. Ramon provided a statement from the ride share company that indicated the amount of mileage driven and fees paid for the year. These fees are considered ordinary and necessary for the ride share business. - 30,200 miles driven while transporting SOCLAL SECURI SECUE customers. - Ride share fee: $4,800 - Safe driver fee: $140 227-00-XXXX Ramon Torrez - Airport fee: $515 - GPS device fee: $320 Ranok Tareg Ramon's recordkeeping application shows he drove 5,830 miles between rides; 2,700 miles driven between his home and his first and last customer of the day. He had the following miscellaneous expenses: - Snacks for customers: $280 - Auto deodorizers: $15 - Phone chargers for customer use only: $120 Meals eaten while waiting for customers: $1,200 The total mileage on his car for 2019 was 44,730 miles, of that 6,000 was personal miles. He placed his car, a 2016 sedan, in service on January 6, 2017. He always takes the standard mileage rate. This is Ramon's only car and it was available for personal use. Ramon found his Fom 1098-E online stating he paid $3,600 in student loan interest in 2019. • Ramon did not have any health insurance for the year. Ramon received a CP01-A Notice assigning him an identity protection personal identification number (IP PIN). His IP PIN is 357900.

Answer 1

28. Option D,His income reported on Form 1099-MISC, Form 1099-K, and the cash tip income from his customers

29. Option B ,22463

No of miles driven = 30200+5830+2700 = 38730

Standard mileage rate = 0.58

Mileage expense deduction = 38730* 0.58 = 22463

32. True