Question
Monica is a cash basis, self-employed chef with her own restaurant. She didnt receive any 1099-Misc forms, but her total deposits in her business bank
Monica is a cash basis, self-employed chef with her own restaurant. She didnt receive any 1099-Misc forms, but her total deposits in her business bank account for 2017 show $151,723. In addition to amounts collected from the restaurant, she also received a payment of $2,500 in cash on Dec 31, 2017 from a former catering client for a catering job she performed in late 2015. She did not receive a Form 1099 for this amount and she did not put this amount in her bank account.
Monica rents a space to have her restaurant, but Monica also uses a small room (100 sq ft) in her home (2,100 sq ft) to keep up with payroll, order supplies, and other administrative duties. She uses her SS number in lieu of an EIN. She incurred the following business related expenses during the year:
Restaurant Expenses (utilized at Restaurant)
Printing/copying $2,789
Legal fees $1,200
Supplies $3,617
Internet Service used 100% for her work $1,200
Postage/UPS $296
Premium for Insurance Policy (100% Business) $1,175
Worker Salaries (assume contract labor) $48,693
Utilities $12,159
Rent $12,000
Cost of Food Sold $25,476
Home Expenses
Lawn Care $1,200
Security $600
Utilities $3,623
During 2017 Monica purchased new appliances in March to use in her restaurant business. The cost of the equipment was $16,825. She wishes to maximize her depreciation deduction.
**LABEL THE FOLLOWING AS Gross Income, Exclusion, For AGI Deduction, From AGI Deduction AND PERCENTAGE LIMITATIONS OF AGI IF APPLICABLE**
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