Overview
All information and questions in an attached Word file below. Please help me to reach those questions in the file.
Have to submit workpapers to reach/explain your answers to the questions and/or to calculate the Schedule C results.
Please help Rachel determine her tax basis net income from Greeny G’s using a 2023 Form 1040 Schedule C. Please present the required items to your client in the following order, stapled:
Cover sheet with all information requested
Handwritten Schedule C (all includible revenues and deductible expenses from the tax basis income statement should be shown on the Schedule C in the places the IRS wants them.)
Income statement, per Rachel, in good form and the related tax basis income statement in good form (Prepare the income statement using ALL the information given, as the client has provided it, without making any adjustments for tax law. Then show the income statement as it should be following tax law. This one should match your Schedule C. Put the two income statements side by side for comparison.) I recommend using Excel for this.
Miscellaneous Account detail (What costs are included per Rachel’s Income statement?)
List of items in the Miscellaneous Expense account that are allowable by the IRS for business purposes.
Separate list of expenses included on Rachel’s “income statement” that are not deductible for Schedule C business purposes. Identify, if any of these expenses are deductible elsewhere on a personal tax return, where they would be deductible. Also identify any expenses included on the “income statement” that are not deductible anywhere on a personal tax return.
List of “revenues” included on the “income statement” that should not be included on the Schedule C. Identify where each would be included in a personal tax return if not on the Schedule C. If these “revenues” are not includible anywhere on a personal tax return, please indicate this.