I have the Schedule C and SE finished below. Please help with the QBI deduction.
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 2020:
| Gross receipts | $ 203,000 |
| Business mileage: 27,000 (miles incurred ratably throughout the year) 35,000 miles total during the year 2020 Van (over 6,000 pounds) placed in service 1/01/2020, cost 27,000 | |
| Postage | (500) |
| Wages | (26,000) |
| Payroll taxes | (1,950) |
| Supplies | (12,500) |
| Phone | (1,250) |
| Internet service | (600) |
| Rent | (2,400) |
| Insurance | (2,800) |
| Van expenses | (4,500) |
| Business assets | Date Purchased | Cost |
| Computer 1 | 5/18/20 | $ 2,200 |
| Computer 2 | 6/01/20 | 2,700 |
| Printer | 3/01/19 | 900 |
| Copier | 3/02/19 | 2,100 |
| Furniture | 3/01/19 | 6,000 |
Required:
Determine Cassis self-employment income and QBI deduction. Prepare Schedule C and Schedule SE. 179 expense is elected on all eligible assets ( 179 was not taken on assets purchased last year). (Use Table 6A-1) (Input all the values as positive numbers. Use Rounded values for tax computation. Do not round other intermediate computations. Round your final answers to nearest whole dollar. Instructions can be found on certain cells within the forms.)
Name of person with self-employment income (as shown on Form 1040, 1040-SR, or 1040- NR) Social security number of person Cassi with self-employment income 412-34-5670 Partl Self-Employment Tax Note: If your only income subject to self-employment tax is church employee income, see instructions for how to report your income and the definition of church employee income. A If you are a minister, member of a religious order, or Christian Science practitioner and you filed Form 4361, but you had $400 or 1a 1b 2 123,371 123,371 113,933 4a 4b 4c 113,933 more of other net earnings from self-employment, check here and continue with Part 1 Skip lines 1a and 1b if you use the farm optional method in Part II. See instructions. 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 onSchedule F. line 4b. or listed on Schedule K-1 (Form 1065), box 20, code AH Skip line 2 if you use the nonfarm optional method in Part II. See instructions. 2 Net profit or loss) from Schedule C, line 31; and Schedule K-1 (Form 1065), box 14 code A (other than farming). See instructions for other income to report or if you are a minister or member of a religious order 3 Combine lines 1a, 1b, and 2 4a If line 3 is more than zero, multiply line 3 by 92.35% (0.9235). Otherwise, enter amount from line 3 Note: If line 4a is less than $400 due to Conservation Reserve Program payments on line 1b, see instructions. b If you elect one or both of the optional methods, enter the total of lines 15 and 17 here C Combine lines 42 and 4b. If less than $400, stop; you don't owe self-employment tax. Exception: If less than $400 and you had church employee income, enter-O- and continue 5a Enter your church employee income from Form W-2. See instructions for definition of church employee income 5 b Multiply line 5a by 92.35% (0.9235). If less than $100, enter-O- 6 Add lines 40 and 5b 7 Maximum amount of combined wages and self-employment earnings subject to social security tax or the 6.2% portion of the 7.65% railroad retirement (tier 1) tax for 2020 Ba Total social security wages and tips (total of boxes 3 and 7 on Form(s) W-2) and railroad retirement (tier 1) compensation. If $137.700 or more, skip lines Sb through 10, and go to line 11 b Unreported tips subject to social security tax from Form 4137, line 10 8b c Wages subject to social security tax from Form 8919, line 10 8C d Add lines 8a, 8b, and 8c 9 Subtract line 3d from line 7. If zero or less, enter -6- here and on line 10 and go to line 11 10 Multiply the smaller of line 6 or line 9 by 12.4% (0.124) 11 Multiply line 6 by 2.9% (0.029) 12 Self-employment tax. Add lines 10 and 11. Enter here and on Schedule 2 (Form 1040), line 4 13 Deduction for one-half of self-employment tax. Multiply line 12 by 50% (0.50). Enter here and on Schedule 1 (Form 1040), line 14 13 8,716 5b 6 113,933 137,700 7 8a 8d 10 11 12 0 137,700 14,128 3,304 17,432 113 Ontion Matbed. T. Siamo Motrician intruction) 000 Yes No Yes No 1 203,000 2 203,000 3 4 5 203,000 6 7 203,000 18 2,350 19 instructions) 2,400 20a 20b 21 22 H If you started or acquired this business during 2020, check here I Did you make any payments in 2020 that would require you to file Form(s) 1090? See instructions J If "Yes," did you or will you file required Form(s) 1099? Partl 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 2 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 7 Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising 8 18 Office expense (see instructions) ) 9 Car and truck expenses (see 19 Pension and profit-sharing plans 9 3,47120 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) 28,15824 Travel and meals : 14 Employee benefit programs a Travel a (other than on line 19) 14 b Deductible meals 15 Insurance (other than health) 15 2,800 (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 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 in the instructions to figure the amount to enter on line 30 31 Net profit or loss). Subtract line 30 from line 29. 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 unii sharvarl 22 anter the Ince nn hnth Seharulo 1 / Farm 1n4n line and on Seharule SF line ? Ilf unui mharbanl the hav on line 1 ces the line 12,500 1,950 23 13 24a 24b 25 26,000 26 20 27a 27b 28 29 79,629 123,371 Worksheet in the 30 fa 31 123,371 N 32a All investment is at risk Name of person with self-employment income (as shown on Form 1040, 1040-SR, or 1040- NR) Social security number of person Cassi with self-employment income 412-34-5670 Partl Self-Employment Tax Note: If your only income subject to self-employment tax is church employee income, see instructions for how to report your income and the definition of church employee income. A If you are a minister, member of a religious order, or Christian Science practitioner and you filed Form 4361, but you had $400 or 1a 1b 2 123,371 123,371 113,933 4a 4b 4c 113,933 more of other net earnings from self-employment, check here and continue with Part 1 Skip lines 1a and 1b if you use the farm optional method in Part II. See instructions. 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 onSchedule F. line 4b. or listed on Schedule K-1 (Form 1065), box 20, code AH Skip line 2 if you use the nonfarm optional method in Part II. See instructions. 2 Net profit or loss) from Schedule C, line 31; and Schedule K-1 (Form 1065), box 14 code A (other than farming). See instructions for other income to report or if you are a minister or member of a religious order 3 Combine lines 1a, 1b, and 2 4a If line 3 is more than zero, multiply line 3 by 92.35% (0.9235). Otherwise, enter amount from line 3 Note: If line 4a is less than $400 due to Conservation Reserve Program payments on line 1b, see instructions. b If you elect one or both of the optional methods, enter the total of lines 15 and 17 here C Combine lines 42 and 4b. If less than $400, stop; you don't owe self-employment tax. Exception: If less than $400 and you had church employee income, enter-O- and continue 5a Enter your church employee income from Form W-2. See instructions for definition of church employee income 5 b Multiply line 5a by 92.35% (0.9235). If less than $100, enter-O- 6 Add lines 40 and 5b 7 Maximum amount of combined wages and self-employment earnings subject to social security tax or the 6.2% portion of the 7.65% railroad retirement (tier 1) tax for 2020 Ba Total social security wages and tips (total of boxes 3 and 7 on Form(s) W-2) and railroad retirement (tier 1) compensation. If $137.700 or more, skip lines Sb through 10, and go to line 11 b Unreported tips subject to social security tax from Form 4137, line 10 8b c Wages subject to social security tax from Form 8919, line 10 8C d Add lines 8a, 8b, and 8c 9 Subtract line 3d from line 7. If zero or less, enter -6- here and on line 10 and go to line 11 10 Multiply the smaller of line 6 or line 9 by 12.4% (0.124) 11 Multiply line 6 by 2.9% (0.029) 12 Self-employment tax. Add lines 10 and 11. Enter here and on Schedule 2 (Form 1040), line 4 13 Deduction for one-half of self-employment tax. Multiply line 12 by 50% (0.50). Enter here and on Schedule 1 (Form 1040), line 14 13 8,716 5b 6 113,933 137,700 7 8a 8d 10 11 12 0 137,700 14,128 3,304 17,432 113 Ontion Matbed. T. Siamo Motrician intruction) 000 Yes No Yes No 1 203,000 2 203,000 3 4 5 203,000 6 7 203,000 18 2,350 19 instructions) 2,400 20a 20b 21 22 H If you started or acquired this business during 2020, check here I Did you make any payments in 2020 that would require you to file Form(s) 1090? See instructions J If "Yes," did you or will you file required Form(s) 1099? Partl 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 2 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 7 Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising 8 18 Office expense (see instructions) ) 9 Car and truck expenses (see 19 Pension and profit-sharing plans 9 3,47120 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) 28,15824 Travel and meals : 14 Employee benefit programs a Travel a (other than on line 19) 14 b Deductible meals 15 Insurance (other than health) 15 2,800 (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 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 in the instructions to figure the amount to enter on line 30 31 Net profit or loss). Subtract line 30 from line 29. 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 unii sharvarl 22 anter the Ince nn hnth Seharulo 1 / Farm 1n4n line and on Seharule SF line ? Ilf unui mharbanl the hav on line 1 ces the line 12,500 1,950 23 13 24a 24b 25 26,000 26 20 27a 27b 28 29 79,629 123,371 Worksheet in the 30 fa 31 123,371 N 32a All investment is at risk
