Asked by karyme catano on Jul 12, 2024
Verified
During 2017,Regina,a sole proprietor,had the following income and expenses from her home jewelry business.Regina is also employed as an office assistant at a local business:
W-2 wages from employer $28,000 Proceeds from jewelry sales 15,000 Supplies for jewelry 5,000 Travel for jewelry 1,400 Charitable contributions to church 3,000\begin{array}{lr}\text { W-2 wages from employer }&\$28,000\\\text { Proceeds from jewelry sales } & 15,000 \\\text { Supplies for jewelry } & 5,000 \\\text { Travel for jewelry } & 1,400\\\text { Charitable contributions to church }&3,000\end{array} W-2 wages from employer Proceeds from jewelry sales Supplies for jewelry Travel for jewelry Charitable contributions to church $28,00015,0005,0001,4003,000 a.What income or loss should be reported on Schedule C?
b.What is Regina's AGI?
Schedule C
A tax form used by sole proprietors to report profits or losses from a business.
Sole Proprietor
An individual who owns and operates a business alone, bearing sole responsibility for its debts and liabilities.
- Learn about the protocols and forms required for self-employment as well as the resulting tax impacts.
- Ascertain the highest level of cost recuperation allowable for deduction within a specific fiscal year.
Verified Answer
RB
ravel bembridgeJul 18, 2024
Final Answer :
a.
Jewelry Sales 15,000 Supplies (5,000) Travel (1,400) Schedule C income $8,600\begin{array}{lr}\text { Jewelry Sales } & 15,00 0 \\\text { Supplies } & (5,000)\\\text { Travel } & (1,400)\\\text { Schedule C income }&\$8,600\end{array} Jewelry Sales Supplies Travel Schedule C income 15,000(5,000)(1,400)$8,600
b.$28,000 + $8,600 - $608 (½ of SE tax)= $35,992 - The charitable contribution does not go into the AGI calculation.It is a from AGI deduction.
SE tax deduction = ((8,600 × 92.35% × 15.3%)* .50)
Jewelry Sales 15,000 Supplies (5,000) Travel (1,400) Schedule C income $8,600\begin{array}{lr}\text { Jewelry Sales } & 15,00 0 \\\text { Supplies } & (5,000)\\\text { Travel } & (1,400)\\\text { Schedule C income }&\$8,600\end{array} Jewelry Sales Supplies Travel Schedule C income 15,000(5,000)(1,400)$8,600
b.$28,000 + $8,600 - $608 (½ of SE tax)= $35,992 - The charitable contribution does not go into the AGI calculation.It is a from AGI deduction.
SE tax deduction = ((8,600 × 92.35% × 15.3%)* .50)
Learning Objectives
- Learn about the protocols and forms required for self-employment as well as the resulting tax impacts.
- Ascertain the highest level of cost recuperation allowable for deduction within a specific fiscal year.
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