ACCT 402 Schedule C , Tax ACCT 402 Schedule C , Tax

Acct 402

Schedule C

Richard Head operates his private detective business as a sole-proprietorship. The tax year 2015 was his second year as a self-employed private detective, attached is his Income Statement for 2015.

In 2014 he used the standard mileage rate to calculate his business auto deduction, In 2015 he drove his 2006 Impala a total of 25,000 miles, of which 20,000 miles was for business and 5,000 personal (including 2,000 miles commuting).

Mr. Head’s only other source of income was $5,000 in wages from School as an adjunct physics professor.

Why might Mr. Head not want to elect Section 179

RICHARD HEAD, PRIVATE EYE, INCOME STATEMENT-CASH BASIS

YEAR ENDED December 31,2015

Revenue from fees                                                                                          120.000

Bank interest received                                                                                             20

Total revenue                                                  120.020

Expenses                                                                                                          

Advertising                                                                                                     3.000

Auto expense                                                                                                  10.000

Continuing education for detectives                                                                 1.000

Depreciation                                                                                                       770

Licensing fees                                                                                                     500

Lunches with the client                                                                                     2.000

Office rent                                                                                                       12.000

Office utilities                                                                                                   6.000

Payroll – secretary                                                                                          35.000

Payroll – part time snoops                                                                              20.000

Payroll taxes                                                                                                     5.000

Incentives paid to informants                                                                            3.000

Sub – contractors                                                                                             20.000

Supplies                                                                                                                 200

Total Expenses                                      118.470  

Net Income                                                1.550

Depreciation Schedule

Date Acquired             Asset                           Cost        BOOK          TAX     BOOK

2014            2014    2015

Depr           Depr    Depr

4/1/2014          Smith & Wesson 38w/ holster    200        15               29      20

7/1/2015          Super snoop camera                    5.000                                 500

10/5/2015        Telescopic lens                              1.000                                 250     

770

 

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