Self-Employed Problem Scott Butterfield is self-employed as a CPA. He uses the cash method of accounting. His principal business code is 541211. Scott's CPA practice is located at his home. Scott's income statement for the year shows the following: Scott Butterfield, CPA Income Statement 12/31/2020 Current Period Prior Period 1/1/2020 to 12/31/2000 1/1/2019 16 12/31/2013 REVENUES Tax Services 76,123 $ 75,067 Accounting Services 49,001 19,860 Other Consulting Services 10,095 10,115 TOTAL REVENUES 135,219 134,042 COST OF SERVICES Salaries 32,000 30,100 Payroll Taxes 2.858 2,387 Supplies 1,3491 1.545 TOTAL COST OF SERVICES 36,259 34,035 GROSS PROFIT LOSS 98,960 200.007 OPERATING EXPENSES Advertising and Promotion 300 350 Business Licenses and Permits 250 250 Charitable contributions 425 275 Continuing Education 300 300 Dues and Subscriations 1,500 7,500 Inance 825 875 Meals and Entertainment 4.400 5.500 Office pense 150 150 Postage and Delivery 50 50 Printing and Alegreduction 100 100 Office Rent 14.000 14.000 Travel 65 865 Utilities 2,978 2,375 TOTAL OPERATING EXPENSES 2,193 29,193 NET INCOME (LOSSI 20.767 70,814 Scott also mentioned the following: The expenses for dues and subscriptions were his country club membership dues for the year. The dues and subscriptions are to various professional organizations, the Tax Topics magazine & a subscription to People for clients to read when waiting for their appointments. $425 of the charitable contributions were made to a political action committee. This has been very helpful to his business as he was put on some influential committees that brought in new clients. The insurance is business insurance. Scott also paid $8,700 of medical premiums during the year - this was not included in his income statement. 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, 2017 and drove it 3,824 miles for business, 3,250 miles for commuting, and 4,500 miles for nonbusiness purposes. His wife has a car for personal use. Scott uses a portion of his home as his office. The amount of space devoted to business use is 1,000 square feet of the total 3,200 square feet in his house. The total mortgage for the year is $9,600, utilities (other than telephone) is $2,500, home insurance is $3,890 and has property taxes of 54,800 for the year. He installed a dedicated special high speed internet connection costing $550 for his office. In the prior tax year, they took a standard deduction. They did not have any virtual currency transactions during the year. They received $2,900 of EIP payments and do not want to contribute to the presidential fund. Complete tax return for the Butterfield's including a well-documented organizer. Self-Employed Problem Scott Butterfield is married to Amanda (age 37) and has two kids - Sam (age 3) and Roxie (age 2). Both kids attend Riverside Pre-school. They live at 678 Third Street, Riverside, CA 92860. The Families Social Security numbers are: Scott 644-47-7833 Amanda 652-45-6333 Sam 555-66-9788 Roxie 444-55-6733 Amanda is employed at the local craft store 22222 a Emelyne 652-45-6333 b Employer identification number EN o Employer's name, address, and ZIP code OMB No 1545-000 1 Visos tips cher compensation 38,000 3 Social securly wages 38,000 5 Medicare wages and tips 38,000 7 Social security tips 2 Federal income tax withheld 4,850 4 Social security tax withhold 2280 & Medicare tax withheld 252 Michael's 125 Craft Street Riverside, CA 92860 & Alocated # Control number 10 Dependent care benefits e Employee's first name and ta Last name Sul. 11 Nonqualified plans 323 19 on Thor 12 Amanda Butterfield 678 Third Street Riverside, CA 92860 14 Other 12e 120 + Employee's actress and ZIP code 15 Stade Employer's stato ID number 16 State wagos, tips, etc. 17 State income tax 18 Local wagas, p. 19 Local income tax 20 Lt Fom W-2 Wage and Tax Statement Copy 1-For State, City, ar Local Tax Department 2020 Department of the Trussary Internal Revenue Service They have the following other income and expense items: Riverside Bank - saving account interest $450 City of Riverside Bond interest $2,800 Disney Co Dividends (all qualified) $790 Charity contributions to church $600 Contribution to Riverside Preschool $350 Amanda also works in a home-based craft business. She loves to do crafts and works on this in her spare time (about 10 hour a week). One day she would like to quit Michaels and just do the craft business full-time, although she would miss the discounts she gets on buying supplies. She has thought about setting up her business formally but has never gotten around to doing the paperwork. She participates in every craft sale she can and generally has a lot of success selling her products. She has an entire room (150 sq.ft.) in the house dedicated to her craft business. She would like to take a home office deduction just like her husband does for his business. She had the following activity for the year: Sales $4,500 Craft Supplies $5,850 Installation of better lighting in the craft room $860 Car mileage (for business trips) 952 miles (total miles driven = 6,570) Self-Employed Problem Scott Butterfield is self-employed as a CPA. He uses the cash method of accounting. His principal business code is 541211. Scott's CPA practice is located at his home. Scott's income statement for the year shows the following: Scott Butterfield, CPA Income Statement 12/31/2020 Current Period Prior Period 1/1/2020 to 12/31/2000 1/1/2019 16 12/31/2013 REVENUES Tax Services 76,123 $ 75,067 Accounting Services 49,001 19,860 Other Consulting Services 10,095 10,115 TOTAL REVENUES 135,219 134,042 COST OF SERVICES Salaries 32,000 30,100 Payroll Taxes 2.858 2,387 Supplies 1,3491 1.545 TOTAL COST OF SERVICES 36,259 34,035 GROSS PROFIT LOSS 98,960 200.007 OPERATING EXPENSES Advertising and Promotion 300 350 Business Licenses and Permits 250 250 Charitable contributions 425 275 Continuing Education 300 300 Dues and Subscriations 1,500 7,500 Inance 825 875 Meals and Entertainment 4.400 5.500 Office pense 150 150 Postage and Delivery 50 50 Printing and Alegreduction 100 100 Office Rent 14.000 14.000 Travel 65 865 Utilities 2,978 2,375 TOTAL OPERATING EXPENSES 2,193 29,193 NET INCOME (LOSSI 20.767 70,814 Scott also mentioned the following: The expenses for dues and subscriptions were his country club membership dues for the year. The dues and subscriptions are to various professional organizations, the Tax Topics magazine & a subscription to People for clients to read when waiting for their appointments. $425 of the charitable contributions were made to a political action committee. This has been very helpful to his business as he was put on some influential committees that brought in new clients. The insurance is business insurance. Scott also paid $8,700 of medical premiums during the year - this was not included in his income statement. 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, 2017 and drove it 3,824 miles for business, 3,250 miles for commuting, and 4,500 miles for nonbusiness purposes. His wife has a car for personal use. Scott uses a portion of his home as his office. The amount of space devoted to business use is 1,000 square feet of the total 3,200 square feet in his house. The total mortgage for the year is $9,600, utilities (other than telephone) is $2,500, home insurance is $3,890 and has property taxes of 54,800 for the year. He installed a dedicated special high speed internet connection costing $550 for his office. In the prior tax year, they took a standard deduction. They did not have any virtual currency transactions during the year. They received $2,900 of EIP payments and do not want to contribute to the presidential fund. Complete tax return for the Butterfield's including a well-documented organizer. Self-Employed Problem Scott Butterfield is married to Amanda (age 37) and has two kids - Sam (age 3) and Roxie (age 2). Both kids attend Riverside Pre-school. They live at 678 Third Street, Riverside, CA 92860. The Families Social Security numbers are: Scott 644-47-7833 Amanda 652-45-6333 Sam 555-66-9788 Roxie 444-55-6733 Amanda is employed at the local craft store 22222 a Emelyne 652-45-6333 b Employer identification number EN o Employer's name, address, and ZIP code OMB No 1545-000 1 Visos tips cher compensation 38,000 3 Social securly wages 38,000 5 Medicare wages and tips 38,000 7 Social security tips 2 Federal income tax withheld 4,850 4 Social security tax withhold 2280 & Medicare tax withheld 252 Michael's 125 Craft Street Riverside, CA 92860 & Alocated # Control number 10 Dependent care benefits e Employee's first name and ta Last name Sul. 11 Nonqualified plans 323 19 on Thor 12 Amanda Butterfield 678 Third Street Riverside, CA 92860 14 Other 12e 120 + Employee's actress and ZIP code 15 Stade Employer's stato ID number 16 State wagos, tips, etc. 17 State income tax 18 Local wagas, p. 19 Local income tax 20 Lt Fom W-2 Wage and Tax Statement Copy 1-For State, City, ar Local Tax Department 2020 Department of the Trussary Internal Revenue Service They have the following other income and expense items: Riverside Bank - saving account interest $450 City of Riverside Bond interest $2,800 Disney Co Dividends (all qualified) $790 Charity contributions to church $600 Contribution to Riverside Preschool $350 Amanda also works in a home-based craft business. She loves to do crafts and works on this in her spare time (about 10 hour a week). One day she would like to quit Michaels and just do the craft business full-time, although she would miss the discounts she gets on buying supplies. She has thought about setting up her business formally but has never gotten around to doing the paperwork. She participates in every craft sale she can and generally has a lot of success selling her products. She has an entire room (150 sq.ft.) in the house dedicated to her craft business. She would like to take a home office deduction just like her husband does for his business. She had the following activity for the year: Sales $4,500 Craft Supplies $5,850 Installation of better lighting in the craft room $860 Car mileage (for business trips) 952 miles (total miles driven = 6,570)