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Patsy, a single taxpayer, operates a daycare center in her home as a sole proprietorship. She has gross revenues of $20,000 and the following expenses:
Patsy, a single taxpayer, operates a daycare center in her home as a sole proprietorship. She has gross revenues of $20,000 and the following expenses: Cost of food $1,500; allocated costs of using the home $1,000; allowable depreciation $600; reasonable salary for her 16 year old daughter for after-school help $2,000. a. Determine Patsys net income from the sole proprietorship in 2017. b. Determine Patsys total of self-employment taxes on this activity. c. If this is Patsys only source of income, what is Patsys AGI?
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