Maria A. Solo (SSN 318-01-6921) lives at 190 Glenn Drive, Grand Rapids, Michigan 49527-2005. Maria (age 45 and single) claims her aunt, Selda Ray (SSN 282-61-4011), as a dependent. Selda lives with Maria. Maria owns and operates the Reliable Drug Company at 1816 First Street in Grand Rapids, Michigan 49503-1902, in which she materially participates the entire year. Her EIN is 38-9654321. Employer quarterly payroll tax returns were filed as required, and Maria values her inventory at cost. The income statement for 2014 is reproduced on the next page. Maria reports on the accrual method, but uses the “direct write-off” method to compute bad debt expense. Her business code is 446110. She does not deduct expenses for an office in her home.
An examination of Maria’s business records reveals that the depreciable property includes furniture and fixtures, a delivery truck, and store equipment. The depreciation expense shown on the 2014 income statement meets the income tax requirements for depreciation for using the mentioned assets during 2014. Maria rounds calculations to the nearest dollar. Miscellaneous expenses include the following

Other income for Maria includes a salary of $100 each month for her services as a member of a working committee of the Drug Association. Her Form W-2 from the association shows gross wages of $1,200 and federal income tax withheld of $296. Maria also earned $320 in taxable interest. Maria made federal estimated tax payments totaling $5,000 during 2014. This amount is reported in the Payments section on Form 1040, page 2