Tess false Self-Study Problem 3.1 Teri Kataoka is self-employed as a professional golf instructor. She uses the cash method of accounting and her Social Security number is 466-47. 8833. Her principal business code is 812990. Teri's business is located at 1234 Pinecrest Dr., Kennesaw, GA 30152. During 2019, Teri had the following income and expenses: Fees from golf lessons $40,125 Expenses: Car mileage (5,234 business miles) 3,036 Business liability insurance Office expense 660 Rent on office space 2,700 City business license Travel expense 3,000 Meals (deductible portion) 985 Utilities 1,015 475 250 Teri bought her car on January 1, 2019. In addition to the business miles listed above, she commuted 1,200 miles and she drove 5,000 miles for nonbusiness purposes. Complete Schedule C for Teri showing her net income from self-employment. Make realistic assumptions about any missing data. Enter all amounts as positive numbers. Enter all amounts as positive numbers. SCHEDULE C Profit or Loss From Business OMB No. 1545-0074 (Form 1040 or 1040-SR) (Sole Proprietorship) 2019 Go to www.irs.gov/Schedule for instructions and the latest information. Department of the Treasury Attachment Attach to Form 1040, 1040-SR, 1040-NR, or 1041; partnerships generally Internal Revenue Service (99) Sequence No. 09 must file Form 1065. Name of proprietor Social security number (SSN) Teri Kataoka 466-47-8833 Principal business or profession, including product or service (see B Enter code from instructions instructions) 812990 Golf Instructor Business name. If no separate business name, leave blank. D Employer ID number (EIN), (see instr.) E F G Business address (including suite or room no.) 1234 Pinecrest Drive City, town or post office, state, and ZIP code Kennesaw, GA 30152 Accounting method: (1) Cash (2) - Accrual (3) - Other (specify) Did you "materially participate in the operation of this business during 2019? If "No," see instructions for limit on losses If you started or acquired this business during 2019, check here Did you make any payments in 2019 that would require you to file Form(s) 1099? (see instructions) Yes No H 1 NO Yes Yes No Yes O No 1 1 2 3 4 4 5 5 1 Did you make any payments in 2019 that would require you to file Form(s) 1099? (see instructions) If "Yes," did you or will you file required Forms 1099?.. Part I Income 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. 2 Returns and allowances. 3 Subtract line 2 from line 1 Cost of goods sold (from line 42) 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. Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising ... 18 Office expense (see instructions) 9 Car and truck expenses (see 19 Pension and profit-sharing plans.... instructions) Rent or lease (see instructions): ....... 10 Commissions and fees....... a Vehicles, machinery, and equipment 11 Contract labor (see instructions) b Other business property. 12 Depletion 12 Repairs and maintenance 13 Depreciation and section 179 22 Supplies (not included in Part III) 6 6 7 7 8 -------- 18 19 9 20 10 20a 11 20b + 21 21 22 13 Depreciation and section 179 22 Supplies (not included in Part III).. 22 23 Taxes and licenses. 23 expense deduction (not included in Part III) (see instructions).. 13 24 Travel and meals: 24a 24b 25 26 27a 27b 28 14 Employee benefit programs a Travel (other than on line 19)...... 14 b Deductible meals 15 Insurance (other than health). 15 (see instructions) 16 Interest (see instructions): ... 25 Utilities .... a Mortgage (paid to banks, etc.) 16a 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: and (b) the part of your home used for business: Use the Simplified Method Worksheet in the instructions to figure the amount to enter on line 30. 31 Net profit or (loss). Subtract line 30 from line 29. If a profit, enter on both Schedule 1 (Form 1040 or 1040-SR), line 3 (or Form 1040-NR, line 13) and on Schedule SE, line 2 29 30 31 Next > Check My Work 31 Net profit or (loss). Subtract line 30 from line 29 If a profit, enter on both Schedule 1 (Form 1040 or 1040-SR), line 3 (or Form 1040-NR, line 13) and on Schedule SE, line 2. 31 (If you checked the box on line 1, see instructions). Estates and trusts, enter on Form 1041, line 3. If a loss, you must go to line 32. 32 If you have a loss, check the box that describes your investment in this activity (see instructions). If you checked 32a, enter the loss on both Schedule 1 (Form 1040 or 1040-SR), line 3, (or Form 32a All investment is at 1040-NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see the line 31 risk instructions). Estates and trusts, enter on Form 1041, line 3. 32b a Some investment is If you checked 32b, you must attach Form 6198. Your loss may be limited. not at risk. For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11334P Schedule C (Form 1040 or 1040-SR) 2019 Page 2 Schedule C (Form 1040 or 1040-SR) 2019 Part III Cost of Goods Sold (see instructions) 33 Method(s) used to value closing inventory a Cost b Lower of cost or market ce Other (attach explanation) 34 Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If "Yes, attach explanation Yes 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation 35 a No Next Check My Work If "Yes," attach explanation .. Yes No 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation .. 35 36 Purchases less cost of items withdrawn for personal use. 36 37 Cost of labor. Do not include any amounts paid to yourself. 37 38 Materials and supplies. 38 39 Other costs.. 39 40 Add lines 35 through 39. 40 41 Inventory at end of year 41 42 Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4 42 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 vehicle in service for business purposes? (month, day, year) 12/31/2019 44 of the total number of miles you drove your vehicle during 2019, enter the number of miles you used your vehide for: Business b Commuting (see instructions) C Other a 45 Yes No 46 Yes No 47a Was your vehicle available for personal use during off-duty hours? Do you (or your spouse) have another vehicle available for personal use? Do you have evidence to support your deduction? If "Yes," is the evidence written? Other Expenses. List below business expenses not included on lines 8-26 or line 30. NH Yes No b Yes No Party Part V Check My Work Next Tess false Self-Study Problem 3.1 Teri Kataoka is self-employed as a professional golf instructor. She uses the cash method of accounting and her Social Security number is 466-47. 8833. Her principal business code is 812990. Teri's business is located at 1234 Pinecrest Dr., Kennesaw, GA 30152. During 2019, Teri had the following income and expenses: Fees from golf lessons $40,125 Expenses: Car mileage (5,234 business miles) 3,036 Business liability insurance Office expense 660 Rent on office space 2,700 City business license Travel expense 3,000 Meals (deductible portion) 985 Utilities 1,015 475 250 Teri bought her car on January 1, 2019. In addition to the business miles listed above, she commuted 1,200 miles and she drove 5,000 miles for nonbusiness purposes. Complete Schedule C for Teri showing her net income from self-employment. Make realistic assumptions about any missing data. Enter all amounts as positive numbers. Enter all amounts as positive numbers. SCHEDULE C Profit or Loss From Business OMB No. 1545-0074 (Form 1040 or 1040-SR) (Sole Proprietorship) 2019 Go to www.irs.gov/Schedule for instructions and the latest information. Department of the Treasury Attachment Attach to Form 1040, 1040-SR, 1040-NR, or 1041; partnerships generally Internal Revenue Service (99) Sequence No. 09 must file Form 1065. Name of proprietor Social security number (SSN) Teri Kataoka 466-47-8833 Principal business or profession, including product or service (see B Enter code from instructions instructions) 812990 Golf Instructor Business name. If no separate business name, leave blank. D Employer ID number (EIN), (see instr.) E F G Business address (including suite or room no.) 1234 Pinecrest Drive City, town or post office, state, and ZIP code Kennesaw, GA 30152 Accounting method: (1) Cash (2) - Accrual (3) - Other (specify) Did you "materially participate in the operation of this business during 2019? If "No," see instructions for limit on losses If you started or acquired this business during 2019, check here Did you make any payments in 2019 that would require you to file Form(s) 1099? (see instructions) Yes No H 1 NO Yes Yes No Yes O No 1 1 2 3 4 4 5 5 1 Did you make any payments in 2019 that would require you to file Form(s) 1099? (see instructions) If "Yes," did you or will you file required Forms 1099?.. Part I Income 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. 2 Returns and allowances. 3 Subtract line 2 from line 1 Cost of goods sold (from line 42) 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. Part II Expenses. Enter expenses for business use of your home only on line 30. 8 Advertising ... 18 Office expense (see instructions) 9 Car and truck expenses (see 19 Pension and profit-sharing plans.... instructions) Rent or lease (see instructions): ....... 10 Commissions and fees....... a Vehicles, machinery, and equipment 11 Contract labor (see instructions) b Other business property. 12 Depletion 12 Repairs and maintenance 13 Depreciation and section 179 22 Supplies (not included in Part III) 6 6 7 7 8 -------- 18 19 9 20 10 20a 11 20b + 21 21 22 13 Depreciation and section 179 22 Supplies (not included in Part III).. 22 23 Taxes and licenses. 23 expense deduction (not included in Part III) (see instructions).. 13 24 Travel and meals: 24a 24b 25 26 27a 27b 28 14 Employee benefit programs a Travel (other than on line 19)...... 14 b Deductible meals 15 Insurance (other than health). 15 (see instructions) 16 Interest (see instructions): ... 25 Utilities .... a Mortgage (paid to banks, etc.) 16a 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: and (b) the part of your home used for business: Use the Simplified Method Worksheet in the instructions to figure the amount to enter on line 30. 31 Net profit or (loss). Subtract line 30 from line 29. If a profit, enter on both Schedule 1 (Form 1040 or 1040-SR), line 3 (or Form 1040-NR, line 13) and on Schedule SE, line 2 29 30 31 Next > Check My Work 31 Net profit or (loss). Subtract line 30 from line 29 If a profit, enter on both Schedule 1 (Form 1040 or 1040-SR), line 3 (or Form 1040-NR, line 13) and on Schedule SE, line 2. 31 (If you checked the box on line 1, see instructions). Estates and trusts, enter on Form 1041, line 3. If a loss, you must go to line 32. 32 If you have a loss, check the box that describes your investment in this activity (see instructions). If you checked 32a, enter the loss on both Schedule 1 (Form 1040 or 1040-SR), line 3, (or Form 32a All investment is at 1040-NR, line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see the line 31 risk instructions). Estates and trusts, enter on Form 1041, line 3. 32b a Some investment is If you checked 32b, you must attach Form 6198. Your loss may be limited. not at risk. For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11334P Schedule C (Form 1040 or 1040-SR) 2019 Page 2 Schedule C (Form 1040 or 1040-SR) 2019 Part III Cost of Goods Sold (see instructions) 33 Method(s) used to value closing inventory a Cost b Lower of cost or market ce Other (attach explanation) 34 Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If "Yes, attach explanation Yes 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation 35 a No Next Check My Work If "Yes," attach explanation .. Yes No 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation .. 35 36 Purchases less cost of items withdrawn for personal use. 36 37 Cost of labor. Do not include any amounts paid to yourself. 37 38 Materials and supplies. 38 39 Other costs.. 39 40 Add lines 35 through 39. 40 41 Inventory at end of year 41 42 Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4 42 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 vehicle in service for business purposes? (month, day, year) 12/31/2019 44 of the total number of miles you drove your vehicle during 2019, enter the number of miles you used your vehide for: Business b Commuting (see instructions) C Other a 45 Yes No 46 Yes No 47a Was your vehicle available for personal use during off-duty hours? Do you (or your spouse) have another vehicle available for personal use? Do you have evidence to support your deduction? If "Yes," is the evidence written? Other Expenses. List below business expenses not included on lines 8-26 or line 30. NH Yes No b Yes No Party Part V Check My Work Next