Prepare tax return to 2019 Form 1040 Schedule C

In July of 2019, Rachel Green started a sole proprietorship called Green's Garments Wardrobe Design Services. Greeny G's uses the cash method of accounting and Rachel has given you the following financial information for the year.Rachel needs you to prepare her 2019 Schedule C for her using all the information that follows. She also has the following additional questions and requests for you.

1.Include a detailed account listing for the Miscellaneous Expense account, per Rachel's records. In a column beside this detail, list the expenses in the Miscellaneous Expense account that are allowed by the IRS.

2.Are there any taxes besides income taxes that she is responsible for paying, in relation to her Schedule C? If so, what is the amount?

3.What kinds of taxes should (or could) be included in her Schedule C?

4.Provide a list of expenses not deducted on Schedule C and a list of revenues not includible on Schedule C. Remember, the Schedule C is only a small part of the whole tax return, so please answer the following for your client. Where would those expenses would be deducted if they were deductible? Which expenses are not deductible? Where would the revenues would be included? Are any revenues not required to be included on a tax return? Please clearly label these lists and present them in an organized fashion as your client has limited time and attention and is, after all, paying for your expertise.

Use the information provided in the income statement and the additional information received from your client that follows to prepare client's Schedule C and to answer her questions, in addition to the requirements from your supervisor.

Green's Garments Wardrobe Design Services

Revenues $ 228,300 Interest expense $ 2,200 Storage rent ($400 per month) 8,000 Contract labor (1099's provided to all workers) 10,950 Liability insurance premiums ($350 per month) 4,200 Oice Supplies (three quarters will be used this year) 400 Health insurance for Rachel 2,500 Bad debt expense 4,000 Depreciation 1 ,265 Miscellaneous Expenses 26,604 Inventory Purchases 50,000 Legal fees for building purchase 3,000 Building downpayment 40,000 Mortgage payments 3,100 Total Expenses 156,219 Net Income 72,081 Beginning Inventory Ending Inventory 35,000