Solved by verified expert :Frederick Freeweights (age 42) owns and operates a health club called “Treadmills West.” The business is located at 4321 Arnold Street, Alpine, CA 91901. Freddy had the following income and expenses from the health club:Income: 214900Expenses:Business Insurance 3,800Office Supplies 3335Payroll 97,200Payroll Taxes 9180Travel 2420Equipment & maintenance 10666cleaning service 8500equipment rent 22820telephone 2780utilities 13975rent 30000advertising 4750special workout clothing and boxing gloves 750subscription to biceps monthly magazine 120educational seminar on weight training 775other expenses 1830The business uses the cash method of accounting and has no accounts receivable or inventory held for resale. Freddy has the following interest income for the year:Bank savings: 12831Bank bond: 10825Freddy has been a widower for 10 years with a dependent song, Arnold, and he files his tax return as a head-of-household. Arnold is an 18 year old high school student; he does not qualify for the child credit. They live next door to the health club. Freddy does all of the administrative work for the health club out of an office in his home. The room is 150 sq ft out of the house total of 1800. Freddy pays 20,000 for rent and 4,000 in utilities.Freddy made an estimated tax payment to the IRS of 1,000 on April 15, 2010.Required: Complete Freddy’s federal tax return for 2010. Use Form 1040, Schedule B, Schedule C, Form 8829, and Schedule M. Use any other appropriate schedules to complete this tax return. Do not complete a Form 4562. Make realistic assumptions about any missing data.
