Advanced Scenario 7: Austin Drake

Directions

Using the tax software, complete the tax return, 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.

Interview Notes

Austin works as a customer service employee during the day. He also has a busi-
ness as a personal trainer and fitness instructor, called Austins Abs. After work, he
travels to teach classes at the gym five days a week.
Austin 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.
Austin uses business code 812190.
He received Form 1099-MISC for classes he taught at the gym. He had an addi-
tional $4,290 cash income in payments from individual clients not included on the
Form 1099-MISC.
He has a written mileage log showing the following miles for 2017. All his travel is
within his local commuting area.
3,750 miles from home to his main job
2,850 miles from his main job to the gym where he taught classes and met indi-
vidual clients
1,300 miles from the gym each day to his home
The total mileage on his car for 2017 was 11,230 miles. He placed his car in service
on January 6, 2011. He always takes the standard mileage rate. This is Austins only
car and it was available for personal use.
Austin has records for other expenses relating to his business:
Advertising: $300
Supplies: $1,000
Nutritional supplements for his own consumption: $675
Business liability insurance: $610
Business license: $150
Austin has a statement from his church stating he donated $650 on December 1,
2017.
Austin also brought his Form 1098 showing the mortgage interest and real estate
tax he paid.
Austin has receipts for an eye exam for $80 and prescription contact lenses for
$300.
Austin donated $100 to a friend in need through a social networking site.

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 This year, Austin will deduct state income tax on Schedule A. Last year, he did not
itemize.
Austins school loan was for qualified education expenses at an eligible institution.
Austin has never taken a distribution from a retirement account and he was not a
full-time student during 2017.
Austin had health insurance all year through his employer. The insurance qualifies
as MEC.

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