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Chris and Stefani Watanabe live with their two boys at 1400 Victoria Lane, Riverside, CA 92501 Chris is an accountant who has his own accounting practice. Stefani is an elementary school teacher. Their sons, Justin and Jordan, are ages 13 and 10, respectively. The following is additional information regarding the Watanabes. Social security numbers for the Watanabe family: Chris Stefani Justin Jordan 412-34-5670 412-34-5671 412-34-5672 412-34-5673 They paid $4,500 to Friendly Hills Child Care center for after-school care for both Justin and Jord allocated equally. The address is 2 River Dr, Riverside, CA and their ID number is 22-1234567 Stefani's W-2 from the Riverside school district showed the following: Wages$56,925.04 Federal W/H$9,085.90 Social Security wages $56,925.04 Social Security W/H 3,529.35 Medicare Wages $56,925.04 Medicare WH = $ 825.41 California WH $ 2,105.75 Chris's accounting business (Business code, 541211, Cash basis) is located in downtown Riverside. His business had the following income and expense information for the year: Gross revenues Expenses Advertising Insurance Legal fees Office supplies Rent Travel Meals and entertainment Utilities Wages Dues $165,000 S 2,100 10,500 800 24,000 6,945 2,400 2,800 34,000 650 Additionally, Chris and Stefani paid the following expenses during the year: $ 4,500 3,750 3,900 3,500 14,900 Medical and dental expenses Property tax (home on Victoria Lane) State income taxes with the 2016 return Donations to the church (cash) Mortgage interest (home on Victoria Lane) Stefani paid $950 in classroom expenses for her class Chris and Stefani also earned $975 of interest income from California Bank during the year. Lastly, Chris and Stefani own a three-bedroom cabin in Big Bear Lake (they bought it in January of 2005 for $300,000). The address is 3105 Stonehedge Road, Big Bear Lake, CA 92315. They did not use the property for personal use at any time during the year. The revenue and expenses for the Big Bear Lake rental property are as follows: Rental income Expenses: Insurance Property taxes Auto (standard mileage) Management fees Repairs and maintenance Mortgage interest Depreciation Utilities $18,000 S 1,200 2,500 267 1,600 1,100 9,000 Calculate 450 The Watanabes also made $15,000 and $9,000 in federal and California estimated income tax payments, respectively, on 12/31/17. Prepare the Watanabes' federal tax return for 2017. Use Form 1040, Schedule A, Schedule C, Schedule E, Schedule SE, and any additional schedules or forms they may need. The Watanabes had qualifying health care coverage at all times during the tax year. They do not want to contribute to the presidential election campaign, and they do not want anyone to be a third-party designee. For any missing information, make reasonable assumptions Chris and Stefani Watanabe live with their two boys at 1400 Victoria Lane, Riverside, CA 92501 Chris is an accountant who has his own accounting practice. Stefani is an elementary school teacher. Their sons, Justin and Jordan, are ages 13 and 10, respectively. The following is additional information regarding the Watanabes. Social security numbers for the Watanabe family: Chris Stefani Justin Jordan 412-34-5670 412-34-5671 412-34-5672 412-34-5673 They paid $4,500 to Friendly Hills Child Care center for after-school care for both Justin and Jord allocated equally. The address is 2 River Dr, Riverside, CA and their ID number is 22-1234567 Stefani's W-2 from the Riverside school district showed the following: Wages$56,925.04 Federal W/H$9,085.90 Social Security wages $56,925.04 Social Security W/H 3,529.35 Medicare Wages $56,925.04 Medicare WH = $ 825.41 California WH $ 2,105.75 Chris's accounting business (Business code, 541211, Cash basis) is located in downtown Riverside. His business had the following income and expense information for the year: Gross revenues Expenses Advertising Insurance Legal fees Office supplies Rent Travel Meals and entertainment Utilities Wages Dues $165,000 S 2,100 10,500 800 24,000 6,945 2,400 2,800 34,000 650 Additionally, Chris and Stefani paid the following expenses during the year: $ 4,500 3,750 3,900 3,500 14,900 Medical and dental expenses Property tax (home on Victoria Lane) State income taxes with the 2016 return Donations to the church (cash) Mortgage interest (home on Victoria Lane) Stefani paid $950 in classroom expenses for her class Chris and Stefani also earned $975 of interest income from California Bank during the year. Lastly, Chris and Stefani own a three-bedroom cabin in Big Bear Lake (they bought it in January of 2005 for $300,000). The address is 3105 Stonehedge Road, Big Bear Lake, CA 92315. They did not use the property for personal use at any time during the year. The revenue and expenses for the Big Bear Lake rental property are as follows: Rental income Expenses: Insurance Property taxes Auto (standard mileage) Management fees Repairs and maintenance Mortgage interest Depreciation Utilities $18,000 S 1,200 2,500 267 1,600 1,100 9,000 Calculate 450 The Watanabes also made $15,000 and $9,000 in federal and California estimated income tax payments, respectively, on 12/31/17. Prepare the Watanabes' federal tax return for 2017. Use Form 1040, Schedule A, Schedule C, Schedule E, Schedule SE, and any additional schedules or forms they may need. The Watanabes had qualifying health care coverage at all times during the tax year. They do not want to contribute to the presidential election campaign, and they do not want anyone to be a third-party designee. For any missing information, make reasonable assumptions

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