Scott Butterfield is self-employed as a CPA. He uses the cash method of accounting, and his Social Security number is 644-47-7833. His principal business code is 541211. Scott's CPA practice is located at 678 Third Street, Riverside, CA 92860. Scott's income statement for the year shows the following: Income Statement Scott Butterfield, CPA Income Statement 12/31/2019 Prior Period Current Period 1/1/2019 to 12/31/2019 1/1/2018 to 12/31/2018 REVENUES $76,123.00 $75,067.00 49,001.00 48,860.00 Tax Services Accounting Services Other Consulting Services TOTAL REVENUES 10,095.00 10,115.00 135,219.00 134,042.00 COST OF SERVICES 32,000.00 30,100.00 Salaries 2,868.00 2,387.00 Payroll Taxes Prior Period Current Period 1/1/2019 to 12/31/2019 1/1/2018 to 12/31/2018 REVENUES Tax Services $76,123.00 49,001.00 10,095.00 135,219.00 $75,067.00 48,860.00 10,115.00 134,042,00 Accounting Services Other Consulting Services TOTAL REVENUES COST OF SERVICES Salaries Payroll Taxes Supplies 30,100.00 2,387.00 1,548.00 32,000.00 2,868.00 1,391.00 36,259.00 98,950.00 34,035.00 100,007.00 TOTAL COST OF SERVICES GROSS PROFIT (LOSS) OPERATING EXPENSES 350.00 300.00 250.00 250.00 275.00 425.00 Advertising and Promotion Business Licenses and Permits Charitable Contributions Continuing Education Dues and Subscriptions 300.00 300.00 3,500.00 3,500.00 875.00 875.00 Insurance 4,400.00 5,500.00 150.00 150.00 Meals and Entertainment Office Expense Postage and Delivery Printing and Reproduction Office Rent 50.00 100.00 50.00 100.00 14,000.00 865.00 14,000.00 Travel 865.00 2,978.00 Utilities 2,978,00 28,193.00 29,193.00 TOTAL OPERATING EXPENSES NET INCOME (LOSS) $70,767.00 $70,814.00 Scott also mentioned the following: The expenses for dues and subscriptions were his country club membership dues for the year. $300 of the charitable contributions were made to a political action committee Scott does not generate income from the sale of goods and therefore does not record supplies and wages as part of cost of goods sold. Scott placed a business auto in service on January 1, 2016 and drove it 3,792 miles for business, 3,250 miles for commuting, and 4,500 miles for nonbusiness purposes. His wife has a car for personal use. He maintains written records for the business use of the car. Issume Scott has evidence to support his Part 1 Income 1 1 135,219 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 Returns and allowances Subtract line from line 1 2 2 3 3 135,219 4 Cost of goods sold (from line 42). 0 5 135,219 6 6 Gross profit. Subtract line 4 from line 3 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions)... Gross income. Add lines 5 and 6 2 135,219 7 150 9 Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising 8 300 18 Office expense (see instructions), 13 9 Car and truck expenses (see 19 Pension and profit-sharing plans.... 19 Instructions)..... 9 2,029 20 Rent or lease (see instructions). 10 Commissions and fees. 10 a vehicles, machinery, and equipment. 200 11 Contract labor (see instructions) 11 b Other business property.. 201 12 Depletion. 12 21 Repairs and maintenance 21 13 Depreciation and section 179 22 Supplies (not included in Part II) 22 expense deduction (not included 14,000 1,391 21 22 1,391 23 3,113 24a 865 24b 2,200 25 2,978 26 32,000 12 Depletion 12 21 Repairs and maintenance ........ 13 Depreciation and section 179 22 Supplies (not included in Part II)... expense deduction (not induded in Part 1) 23 Taxes and licenses (see instructions) 13 24 Travel and meals: 14 Employee benefit programs a Travel (other than on line 19).... 14 b Deductible meals 15 Insurance (other than health) 15 875 (see instructions) 16 Interest (see instructions): 25 Utilities a Mortgage (paid to banks, etc.) 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: Use the Simplified Method Worksheet and (b) the part of your home used for business: in the instructions to figure the amount to enter on line 30 160 27a 425 27b 28 60,331 29 74,888 30 Part IV Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not required to file Form 4562 for this business. See the instructions for line 13 to find out if you must file Form 4562. 43 When did you place your vehide in service for business purposes? (month, day, year) 1/1/16 44 of the total number of miles you drove your vehice during 2019, enter the number of miles you used your vehide for: a Business 3,792 b Commuting (see instructions) 3,250 Other 4,500 45 Was your vehide available for personal use during off duty hours? Yes 46 Do you (or your spouse) have another vehide available for personal use? Yes 47a Do you have evidence to support your deduction? Yes b If "Yes," is the evidence written? Yes Part V Other Expenses. List below business expenses not included on lines 8-26 or line 30. Charitable contributions 125 300 Continuing education 2,200 Nondeductible portion of meals and entertainment Next Check My Work 1 more Check My Work uses romaining 634 PM Scott Butterfield is self-employed as a CPA. He uses the cash method of accounting, and his Social Security number is 644-47-7833. His principal business code is 541211. Scott's CPA practice is located at 678 Third Street, Riverside, CA 92860. Scott's income statement for the year shows the following: Income Statement Scott Butterfield, CPA Income Statement 12/31/2019 Prior Period Current Period 1/1/2019 to 12/31/2019 1/1/2018 to 12/31/2018 REVENUES $76,123.00 $75,067.00 49,001.00 48,860.00 Tax Services Accounting Services Other Consulting Services TOTAL REVENUES 10,095.00 10,115.00 135,219.00 134,042.00 COST OF SERVICES 32,000.00 30,100.00 Salaries 2,868.00 2,387.00 Payroll Taxes Prior Period Current Period 1/1/2019 to 12/31/2019 1/1/2018 to 12/31/2018 REVENUES Tax Services $76,123.00 49,001.00 10,095.00 135,219.00 $75,067.00 48,860.00 10,115.00 134,042,00 Accounting Services Other Consulting Services TOTAL REVENUES COST OF SERVICES Salaries Payroll Taxes Supplies 30,100.00 2,387.00 1,548.00 32,000.00 2,868.00 1,391.00 36,259.00 98,950.00 34,035.00 100,007.00 TOTAL COST OF SERVICES GROSS PROFIT (LOSS) OPERATING EXPENSES 350.00 300.00 250.00 250.00 275.00 425.00 Advertising and Promotion Business Licenses and Permits Charitable Contributions Continuing Education Dues and Subscriptions 300.00 300.00 3,500.00 3,500.00 875.00 875.00 Insurance 4,400.00 5,500.00 150.00 150.00 Meals and Entertainment Office Expense Postage and Delivery Printing and Reproduction Office Rent 50.00 100.00 50.00 100.00 14,000.00 865.00 14,000.00 Travel 865.00 2,978.00 Utilities 2,978,00 28,193.00 29,193.00 TOTAL OPERATING EXPENSES NET INCOME (LOSS) $70,767.00 $70,814.00 Scott also mentioned the following: The expenses for dues and subscriptions were his country club membership dues for the year. $300 of the charitable contributions were made to a political action committee Scott does not generate income from the sale of goods and therefore does not record supplies and wages as part of cost of goods sold. Scott placed a business auto in service on January 1, 2016 and drove it 3,792 miles for business, 3,250 miles for commuting, and 4,500 miles for nonbusiness purposes. His wife has a car for personal use. He maintains written records for the business use of the car. Issume Scott has evidence to support his Part 1 Income 1 1 135,219 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 Returns and allowances Subtract line from line 1 2 2 3 3 135,219 4 Cost of goods sold (from line 42). 0 5 135,219 6 6 Gross profit. Subtract line 4 from line 3 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions)... Gross income. Add lines 5 and 6 2 135,219 7 150 9 Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising 8 300 18 Office expense (see instructions), 13 9 Car and truck expenses (see 19 Pension and profit-sharing plans.... 19 Instructions)..... 9 2,029 20 Rent or lease (see instructions). 10 Commissions and fees. 10 a vehicles, machinery, and equipment. 200 11 Contract labor (see instructions) 11 b Other business property.. 201 12 Depletion. 12 21 Repairs and maintenance 21 13 Depreciation and section 179 22 Supplies (not included in Part II) 22 expense deduction (not included 14,000 1,391 21 22 1,391 23 3,113 24a 865 24b 2,200 25 2,978 26 32,000 12 Depletion 12 21 Repairs and maintenance ........ 13 Depreciation and section 179 22 Supplies (not included in Part II)... expense deduction (not induded in Part 1) 23 Taxes and licenses (see instructions) 13 24 Travel and meals: 14 Employee benefit programs a Travel (other than on line 19).... 14 b Deductible meals 15 Insurance (other than health) 15 875 (see instructions) 16 Interest (see instructions): 25 Utilities a Mortgage (paid to banks, etc.) 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: Use the Simplified Method Worksheet and (b) the part of your home used for business: in the instructions to figure the amount to enter on line 30 160 27a 425 27b 28 60,331 29 74,888 30 Part IV Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not required to file Form 4562 for this business. See the instructions for line 13 to find out if you must file Form 4562. 43 When did you place your vehide in service for business purposes? (month, day, year) 1/1/16 44 of the total number of miles you drove your vehice during 2019, enter the number of miles you used your vehide for: a Business 3,792 b Commuting (see instructions) 3,250 Other 4,500 45 Was your vehide available for personal use during off duty hours? Yes 46 Do you (or your spouse) have another vehide available for personal use? Yes 47a Do you have evidence to support your deduction? Yes b If "Yes," is the evidence written? Yes Part V Other Expenses. List below business expenses not included on lines 8-26 or line 30. Charitable contributions 125 300 Continuing education 2,200 Nondeductible portion of meals and entertainment Next Check My Work 1 more Check My Work uses romaining 634 PM