Amy and David Smith are a married couple and live along the 123 main street of Stafford VA 22554. Dave as his wife calls him is a self-employed person who works in his company as a web developer while Amy is a commercial sales representative. David Has specialized in the building and maintaining of web applications for a number of clients. He does all this from the comfort of his office at home, but at the time of payment or a crucial matter, he meets the client face-to-face. Nonetheless, most times he meets with clients at his home office. David’s home office is very and covers approximately 400 square feet of their 4000 square meter home. The home David and Amy was built at the cost of 350000 dollars on a piece of plot that they acquired at the cost of 75000 dollars. The house was finished on May 1, 2008 which paved way for the smiths to move in together. As referred in business, depreciation has been based and considered on MACRS. The expenses the couple encountered apart from the mortgage interest and the property taxes in the year 2011, utilities summed up to 4200 dollars, cleaning services rendered totaled up to 2400, the security systems included 1200 dollars, owners insurance 2100 dollars and repairs in the office summed up to 750 dollars. David had to order for the office equipment’s worth 800 dollars, and the office telephone line at the cost of 600 dollars for the smooth running of his web business. He later purchased a laptop worth 25500 dollars in the month of august and later on march 7th he purchased a printer that went for 400 dollars.
On May 19th, he paid a tax of 34500 dollars for the purchase of a new Audi A8 that is used on a 90% bases for the running of the business. From all this costs incurred by David, he uses the method of computing tax to deduce on his expenses. His expenses that relate to the purchased A8 Audi were: gasoline 2800 dollars, auto insurance 1250 on the car, interest on the loan of the car at 750, oil at 425, license of the driver and registration of the car at 150, parking and the tolls both for 90 and 75. David smith drove the car at 13500 miles on matters concerning the business and 1500 miles for his own personal motives. While on the road either attending a business trip or personal gain, he incurred 2500 dollars of airfare, 1570 dollars for lodging and 1313 dollars for his meals. On the business trips, he paid for the dinners with his clients that were worth 630 dollars. During the year 2011, David smith incurred contributed to Keogh plan 8000 dollars on matters concerning business.
Amy the wife to David smith earns a total of 35000 dollars as a part timer. At the work place, she is not eligible to be include in her employer’s retirement plan or on health programs. Her expenses are contribution to traditional IRA 4000 dollars, membership worth 120 and subscriptions to the web magazines at 90. Amy drives a Chevy Tahoe 1135 miles from job related tasks. She purchased the car at the cost of 25000 dollars in 2010. The smiths incurred the expenses of Gene who suffered a massive stroke. They paid a sum of 11800 dollars but later on died on January 8 2011. They carted for the burial expenses that summed up to 17100 dollars. In the early 2011, Joe, the uncle to David died, and David donated the colt to the museum. This transfer was made on December 5 2011. While on a walk with her dog Amy was hit by delivery truck. This incident sent her to the hospital for several days. The driver of the truck offered to settle her hospital expenses if she would agree to sign a release for him. Under the resolution, Amy would be given a total of 134 dollars -8000$ for loss of her earnings and 126000$for the injuries. On the 31st of January, the year 2011, Amy signed the discharge and walked away with a sum of $134000.