Cassi (SSN 412-34-5670) has a cash-basis home cleaning business she runs as a sole proprietorship. The following are the results from business operations for the tax year 2019: $203,000 Gross receipts Business mileage: 27,000 (miles incurred ratably throughout the year) 35,000 miles total during the year 2019 Van (over 6,000 lbs) placed in service 1/01/19, cost 27,000 Postage Wages Payroll taxes Supplies Phone Internet service Rent Insurance Van expenses (500) (26,000) (1,950) (12,500) (1,250) (600) (2,400) (2,800) (4,500) Cost Business assets Computer 1 Computer 2 Printer Copier Furniture Date Purchased 5/18/19 6/01/19 3/01/18 3/02/18 3/01/18 $2,200 2,700 900 2,100 6,000 Part Income 1 Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W-2 and the "Statutory employee" box on that form was checked 2 Returns and allowances 3 Subtract line 2 from line 1 4 Cost of goods sold (from line 42) 5 Gross profit. Subtract line 4 from line 3 6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) 7 Gross income. Add lines 5 and 6 Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising 8 18 Office expense (see instructions) 9 9 Car and truck expenses (see 19 Pension and profit-sharing plans instructions) 9 20 Rent or lease (see instructions) 10 Commissions and fees 10 a Vehicles, machinery, and equipment 11 Contract labor (see instructions) 11 b Other business property 12 Depletion 12 21 Repairs and maintenance 13 Depreciation and section 179 22 Supplies (not included in Part III) expense deduction (not included 23 Taxes and licenses in Part III) (see instructions) 13 24 Travel, meals: , 14 Employee benefit programs a Travel (other than on line 19) 14 b b Deductible meals 15 Insurance (other than health) 15 (see instructions) 16 Interest (see instructions): 25 Utilities a Mortgage (paid to banks, etc.) 16a 26 Wages (less employment credits) b Other 16b 27a Other expenses (from line 48) 17 Legal and professional services 17 b Reserved for future use 2 2 28 30 28 Total expenses before expenses for business use of home. Add lines 8 through 27a 29 Tentative profit or loss). Subtract line 28 from line 7 30 Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method (see instructions). Simplified method filers only: enter the total square footage of: (a) your home: and (b) the part of your home used for business: Use the Simplified Method Worksheet in the instructions to figure the amount to enter on line 30 31 Net profit or loss). Subtract line 30 from line 29 If a profit, enter on both Schedule 1 (Form 1040 or 1040-SR), line 3 (or Form 1040-NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see instructions). Estates and trusts, enter on Form 1041, line 3. If a loss, you must go to line 32 32 If you have a loss, check the box that describes your investment in this activity (see instructions). If you checked 32a, enter the loss on both Schedule 1 (Form 1040 or 1040-SR), line 3 (or Form 1040-NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see the line 31 instructions). Estates and trusts, enter on Form 1041, line 3. If you checked 32b, you must attach Form 6198. Your loss may be limited. 31 32a All investment i 32b Some investme Qualified Business Income deduction (QBI) The Qualified Businees Income deduction (QBI) is May I Use Short Schedule SE or Must I Use Long Schedule SE? Note: Use this flowchart only if you must file Schedule SE. If unsure, see Who Must File Schedule SE in the instructions. Section A-Short Schedule SE. Caution: Read above to see if you can use Short Schedule SE. 1 a 1b 1a Net farm profit or (loss) from Schedule F, line 34, and farm partnerships, Schedule K-1 (Form 1065), box 14, code A b If you received social security retirement or disability benefits, enter the amount of Conservation Reserve Program payments included on Schedule F, line 4b, or listed on Schedule K-1 (Form 1065), box 20, code AH 2 Net profit or loss) from Schedule C, line 31; and Schedule K-1 (Form 1065), box 14, code A (other than farming). and Ministers and members of religious orders, see instructions for types of income to report on this line. See instructions for other income to report 3 Combine lines 1a, 1b, and 2 4 Multiply line 3 by 92.35% (0.9235). If less than $400, you don't owe self-employment tax, don't file this schedule unless you have an amount on line 16 Note: If line 4 is less than $400 due to Conservation Reserve Program payments on line 1b, see instructions. 5 Self-employment tax. If the amount on line 4 is: $132,900 or less, multiply line 4 by 15.3% (0.153). Enter the result here and on Schedule 2 (Form 1040 or 1040-SR), line 4, or Form 1040- NR, line 55 . More than $132,900, multiply line 4 by 2.9% (0.029). Then, add $16,479.60 to the result. Enter the total here and on Schedule 2 (Form 1040 or 1040-SR), line 4, or Form 1040-NR, line 55 6 Deduction for one-half of self-employment tax. Multiply line 5 by 50% (0.50). Enter the result here and on Schedule 1 (Form 1040 or 1040-SR), line 14, or Form 1040-NR, line 27 1 Maximum amount (see instructions) 2 Total Cost section 179 property placed in service (see instructions) 3 Threshold cost of section 179 property before reduction in limitation (see instructions) 4 Reduction limitation. Subtract line 3 from line 2. If zero or less, enter-O- 5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter-O-. If married filing separately, see instructions 6 (a) Description of property (b) Cost (biz, use) (c) Elected cost Two Computers 0 0 0 10 11 12 7 Listed property. Enter the amount from line 29 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 9 Tentative deduction. Enter the smaller of line 5 or line 8 10 Carryover of disallowed deduction from line 13 of your 2018 Form 4562 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5. See instructions 12 Section 179 expense deduction. Add lines 9 and 10, but don't enter more than line 11 13 Carryover of disallowed deduction to 2020. Add lines 9 and 10, less line 12 13 ote: Don't use Part II or Part III below for listed property. Instead, use Part V. Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property. See instructions.) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year. See instructions 15 Property subject to section 168(f)(1) election 16 Other depreciation (including ACRS) Part III MACRS Depreciation (Don't include listed property. See instructions.) Section A 17 MACRS deductions for assets placed in service in tax years beginning before 2019 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here 14 15 16 171 Section B-Assets Placed in Service During 2019 Tax Year Using the General Depreciation System (c) Basis for depreciation (b) Month and year (business/investment placed in service use (d) Recovery period (e) Convention (1) Method only see instructions) ) (a) Classification of property (g) Depreciation deduction 19a 3-year property b 5-year property c7-year property d 10-year property e 15-year property f 20-year property g 25-year property h Residential rental property i Nonresidential real property 27.5 yrs 27.5 yrs. 39 yrs. 25 yrs. S/L MM S/L MM S/L MM S/L MM S/L Section CAssets Placed in Service During 2019 Tax Year Using the Alternative Depreciation System S/L 12 yrs. S/L 30 yrs. MM S/L 40 yrs. MM S/L Summary (See instructions.) 20a Class life b 12-year c 30-year d 40-year Part IV 24 listed oronert Enter amount from line 28 21 21 Part IV Summary (See instructions.) 21 Listed property. Enter amount from line 28 22 Total. Add amounts from line 12, lines 14 through 17. lines 19 and 20 in column (9), and line 21. Enter here and on the appropriate lines of your return. Partnerships and S corporations-see instructions 23 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to section 263A costs 23 22 Yes UNO 24b If "Yes," is the evidence written? Yes U (c) Basis for depreciation (1) (business/investment use only) Recovery period (g) Method/Convention (h) Depreciation deduction 24a Do you have evidence to support the business/investment use claimed? (a) Type of property (b) Date placed in (c) service (list vehicles first) Business/investment (d) Cost or other basis (mm/dd/yyyy) use percentage 25 Special depreciation allowance for qualified listed property placed in service during the tax year and used more than 50% in a qualified business use. See instructions 26 Property used more than 50% in a qualified business use: (1) Elected sec 179 cost 25 27 Property used 50% or less in a qualified business use: S/L S/L- L- S/L 28 Add amounts in column (h), lines 25 through 27. Enter here and on line 21, page 1 28 0 29 Add amounts in column (i), line 26. Enter here and on line 7, page 1 29 Section B-Information on Use of Vehicles Complete this section for vehicles used by a sole proprietor, partner, or other "more than 5% owner," or related person. If you provided vehicles to your employees, first answer the questions in Sectic to see if you meet an exception to completing this section for those vehicles. 30 Total business/investment miles driven during the year (don't (a) Vehicle 1 a (b) Vehicle 2 (c) Vehicle 3 (d) Vehicle 4 (e) Vehicle 5 (1) Vehicle include commuting miles) 31 Total commuting miles driven during the year 32 Total other personal (noncommuting) miles driven 33 Total miles driven during the year. Add lines 30 through 32 0 0 0 0 0 lo DOO DOD JO 34 Was the vehicle available for personal Yes No Yes No Yes NO Yes No Yes No Yes use during off-duty hours? 35 Was the vehicle used primarily by a more 0 than 5% owner or related person? 36 is another vehicle available for personal use? Section C-Questions for Employers Who Provide Vehicles for Use by Their Employees Answer these questions to determine if you meet an exception to completing Section B for vehicles used by employees who aren't more than 5% owners or related persons. See instructions. Yes 37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, by your employees? 38 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by your employees? See the instructions for vehicles used by corporate officers, directors, or 1% or more owners 39 Do you treat all use of vehicles by employees as personal use? 40 Do you provide more than five vehicles to your employees, obtain information from your employees about the use of the vehicles, and retain the information received 41 Do you meet the requirements concerning qualified automobile demonstration use? See instructions. Note: If your answer to 37, 38, 39, 40, or 41 is "Yes," don't complete Section B for the covered vehicles. Part VI Amortization DODOD (c) Amortizable amount (d) Code section (c) Amortization period or percentage (f) Amortization for this (b) Date (a) Description of costs amortization begins (mm/dd/yyyy) 42 Amortization of costs that begins during your 2019 tax year (see instructions): 43 Amortization of costs that began before your 2019 tax year 44 Total. Add amounts in column (f). See the instructions for where to report. 43 44 Cassi (SSN 412-34-5670) has a cash-basis home cleaning business she runs as a sole proprietorship. The following are the results from business operations for the tax year 2019: $203,000 Gross receipts Business mileage: 27,000 (miles incurred ratably throughout the year) 35,000 miles total during the year 2019 Van (over 6,000 lbs) placed in service 1/01/19, cost 27,000 Postage Wages Payroll taxes Supplies Phone Internet service Rent Insurance Van expenses (500) (26,000) (1,950) (12,500) (1,250) (600) (2,400) (2,800) (4,500) Cost Business assets Computer 1 Computer 2 Printer Copier Furniture Date Purchased 5/18/19 6/01/19 3/01/18 3/02/18 3/01/18 $2,200 2,700 900 2,100 6,000 Part Income 1 Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W-2 and the "Statutory employee" box on that form was checked 2 Returns and allowances 3 Subtract line 2 from line 1 4 Cost of goods sold (from line 42) 5 Gross profit. Subtract line 4 from line 3 6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) 7 Gross income. Add lines 5 and 6 Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising 8 18 Office expense (see instructions) 9 9 Car and truck expenses (see 19 Pension and profit-sharing plans instructions) 9 20 Rent or lease (see instructions) 10 Commissions and fees 10 a Vehicles, machinery, and equipment 11 Contract labor (see instructions) 11 b Other business property 12 Depletion 12 21 Repairs and maintenance 13 Depreciation and section 179 22 Supplies (not included in Part III) expense deduction (not included 23 Taxes and licenses in Part III) (see instructions) 13 24 Travel, meals: , 14 Employee benefit programs a Travel (other than on line 19) 14 b b Deductible meals 15 Insurance (other than health) 15 (see instructions) 16 Interest (see instructions): 25 Utilities a Mortgage (paid to banks, etc.) 16a 26 Wages (less employment credits) b Other 16b 27a Other expenses (from line 48) 17 Legal and professional services 17 b Reserved for future use 2 2 28 30 28 Total expenses before expenses for business use of home. Add lines 8 through 27a 29 Tentative profit or loss). Subtract line 28 from line 7 30 Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method (see instructions). Simplified method filers only: enter the total square footage of: (a) your home: and (b) the part of your home used for business: Use the Simplified Method Worksheet in the instructions to figure the amount to enter on line 30 31 Net profit or loss). Subtract line 30 from line 29 If a profit, enter on both Schedule 1 (Form 1040 or 1040-SR), line 3 (or Form 1040-NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see instructions). Estates and trusts, enter on Form 1041, line 3. If a loss, you must go to line 32 32 If you have a loss, check the box that describes your investment in this activity (see instructions). If you checked 32a, enter the loss on both Schedule 1 (Form 1040 or 1040-SR), line 3 (or Form 1040-NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see the line 31 instructions). Estates and trusts, enter on Form 1041, line 3. If you checked 32b, you must attach Form 6198. Your loss may be limited. 31 32a All investment i 32b Some investme Qualified Business Income deduction (QBI) The Qualified Businees Income deduction (QBI) is May I Use Short Schedule SE or Must I Use Long Schedule SE? Note: Use this flowchart only if you must file Schedule SE. If unsure, see Who Must File Schedule SE in the instructions. Section A-Short Schedule SE. Caution: Read above to see if you can use Short Schedule SE. 1 a 1b 1a Net farm profit or (loss) from Schedule F, line 34, and farm partnerships, Schedule K-1 (Form 1065), box 14, code A b If you received social security retirement or disability benefits, enter the amount of Conservation Reserve Program payments included on Schedule F, line 4b, or listed on Schedule K-1 (Form 1065), box 20, code AH 2 Net profit or loss) from Schedule C, line 31; and Schedule K-1 (Form 1065), box 14, code A (other than farming). and Ministers and members of religious orders, see instructions for types of income to report on this line. See instructions for other income to report 3 Combine lines 1a, 1b, and 2 4 Multiply line 3 by 92.35% (0.9235). If less than $400, you don't owe self-employment tax, don't file this schedule unless you have an amount on line 16 Note: If line 4 is less than $400 due to Conservation Reserve Program payments on line 1b, see instructions. 5 Self-employment tax. If the amount on line 4 is: $132,900 or less, multiply line 4 by 15.3% (0.153). Enter the result here and on Schedule 2 (Form 1040 or 1040-SR), line 4, or Form 1040- NR, line 55 . More than $132,900, multiply line 4 by 2.9% (0.029). Then, add $16,479.60 to the result. Enter the total here and on Schedule 2 (Form 1040 or 1040-SR), line 4, or Form 1040-NR, line 55 6 Deduction for one-half of self-employment tax. Multiply line 5 by 50% (0.50). Enter the result here and on Schedule 1 (Form 1040 or 1040-SR), line 14, or Form 1040-NR, line 27 1 Maximum amount (see instructions) 2 Total Cost section 179 property placed in service (see instructions) 3 Threshold cost of section 179 property before reduction in limitation (see instructions) 4 Reduction limitation. Subtract line 3 from line 2. If zero or less, enter-O- 5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter-O-. If married filing separately, see instructions 6 (a) Description of property (b) Cost (biz, use) (c) Elected cost Two Computers 0 0 0 10 11 12 7 Listed property. Enter the amount from line 29 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 9 Tentative deduction. Enter the smaller of line 5 or line 8 10 Carryover of disallowed deduction from line 13 of your 2018 Form 4562 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5. See instructions 12 Section 179 expense deduction. Add lines 9 and 10, but don't enter more than line 11 13 Carryover of disallowed deduction to 2020. Add lines 9 and 10, less line 12 13 ote: Don't use Part II or Part III below for listed property. Instead, use Part V. Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property. See instructions.) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year. See instructions 15 Property subject to section 168(f)(1) election 16 Other depreciation (including ACRS) Part III MACRS Depreciation (Don't include listed property. See instructions.) Section A 17 MACRS deductions for assets placed in service in tax years beginning before 2019 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here 14 15 16 171 Section B-Assets Placed in Service During 2019 Tax Year Using the General Depreciation System (c) Basis for depreciation (b) Month and year (business/investment placed in service use (d) Recovery period (e) Convention (1) Method only see instructions) ) (a) Classification of property (g) Depreciation deduction 19a 3-year property b 5-year property c7-year property d 10-year property e 15-year property f 20-year property g 25-year property h Residential rental property i Nonresidential real property 27.5 yrs 27.5 yrs. 39 yrs. 25 yrs. S/L MM S/L MM S/L MM S/L MM S/L Section CAssets Placed in Service During 2019 Tax Year Using the Alternative Depreciation System S/L 12 yrs. S/L 30 yrs. MM S/L 40 yrs. MM S/L Summary (See instructions.) 20a Class life b 12-year c 30-year d 40-year Part IV 24 listed oronert Enter amount from line 28 21 21 Part IV Summary (See instructions.) 21 Listed property. Enter amount from line 28 22 Total. Add amounts from line 12, lines 14 through 17. lines 19 and 20 in column (9), and line 21. Enter here and on the appropriate lines of your return. Partnerships and S corporations-see instructions 23 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to section 263A costs 23 22 Yes UNO 24b If "Yes," is the evidence written? Yes U (c) Basis for depreciation (1) (business/investment use only) Recovery period (g) Method/Convention (h) Depreciation deduction 24a Do you have evidence to support the business/investment use claimed? (a) Type of property (b) Date placed in (c) service (list vehicles first) Business/investment (d) Cost or other basis (mm/dd/yyyy) use percentage 25 Special depreciation allowance for qualified listed property placed in service during the tax year and used more than 50% in a qualified business use. See instructions 26 Property used more than 50% in a qualified business use: (1) Elected sec 179 cost 25 27 Property used 50% or less in a qualified business use: S/L S/L- L- S/L 28 Add amounts in column (h), lines 25 through 27. Enter here and on line 21, page 1 28 0 29 Add amounts in column (i), line 26. Enter here and on line 7, page 1 29 Section B-Information on Use of Vehicles Complete this section for vehicles used by a sole proprietor, partner, or other "more than 5% owner," or related person. If you provided vehicles to your employees, first answer the questions in Sectic to see if you meet an exception to completing this section for those vehicles. 30 Total business/investment miles driven during the year (don't (a) Vehicle 1 a (b) Vehicle 2 (c) Vehicle 3 (d) Vehicle 4 (e) Vehicle 5 (1) Vehicle include commuting miles) 31 Total commuting miles driven during the year 32 Total other personal (noncommuting) miles driven 33 Total miles driven during the year. Add lines 30 through 32 0 0 0 0 0 lo DOO DOD JO 34 Was the vehicle available for personal Yes No Yes No Yes NO Yes No Yes No Yes use during off-duty hours? 35 Was the vehicle used primarily by a more 0 than 5% owner or related person? 36 is another vehicle available for personal use? Section C-Questions for Employers Who Provide Vehicles for Use by Their Employees Answer these questions to determine if you meet an exception to completing Section B for vehicles used by employees who aren't more than 5% owners or related persons. See instructions. Yes 37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, by your employees? 38 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by your employees? See the instructions for vehicles used by corporate officers, directors, or 1% or more owners 39 Do you treat all use of vehicles by employees as personal use? 40 Do you provide more than five vehicles to your employees, obtain information from your employees about the use of the vehicles, and retain the information received 41 Do you meet the requirements concerning qualified automobile demonstration use? See instructions. Note: If your answer to 37, 38, 39, 40, or 41 is "Yes," don't complete Section B for the covered vehicles. Part VI Amortization DODOD (c) Amortizable amount (d) Code section (c) Amortization period or percentage (f) Amortization for this (b) Date (a) Description of costs amortization begins (mm/dd/yyyy) 42 Amortization of costs that begins during your 2019 tax year (see instructions): 43 Amortization of costs that began before your 2019 tax year 44 Total. Add amounts in column (f). See the instructions for where to report. 43 44