2018 Federal Income Tax Return for the Smith Family Scenario

This assignment presents a comprehensive solution to the Smith family's 2018 federal income tax return. The scenario involves Joseph and Rita Smith, a self-employed CPA and a third-grade teacher, respectively, along with their two children. The solution includes the completion of relevant tax forms such as Schedule C (for Joseph's self-employment income and business expenses), Schedule E (if applicable), and Form 1040. The assignment requires calculating their adjusted gross income, itemized deductions, and tax liability, considering their earned income, business expenses (office rent, supplies, internet, phone, advertising, postage, audit/tax software, and business gifts), and any applicable credits or deductions. The solution demonstrates the process of determining taxable income, calculating the tax owed, and ensuring compliance with IRS regulations. The solution also includes the tax withholdings from Rita's employment and the required Social Security and Medicare taxes. This assignment provides a detailed walkthrough of the tax calculation process for a family with self-employment and employee income.