Are there any taxes Mollie is responsible for paying in relation to her business

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Business Finance

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Besides fill the form 1040 and schedule C , please give me the specific details of the work.

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Mollie Gee is the sole proprietor of a cash basis, Internet based, business providing handywoman advice and tips for do-it-yourself home improvement wannabes. Her site, HandyWomanRocks.com, also serves as a look up portal for reputable contractors providing a wide variety of home repair services, similar to Angie’s List. Mollie receives fees from the contractors for referrals that result in jobs from her site. Since HandyWomanRocks.com is such a popular site, Mollie receives advertising revenue from Home Depot, Lowes, Tractor Supply, Ace Hardware and Spenard Builder Supply, among other companies. She records the revenue as she receives it. Sometimes she receives revenue and then is obligated to host the advertising for a certain period after the payment. Mollie has published an ebook, “DIY for Dummies,” sold on her website. Mollie also has a DIY blog. For the current year, she has the following revenue and expenses: Revenue from advertising on her site^ $ 56,500 Revenue from referrals 28,550 Revenue from book sales 9,900 Revenue billed but not received (for services not yet rendered) 2,001 Home improvement conference registrations* 4,500 Travel to conferences 1,250 Hotels at conferences 420 Meals (at conferences and during travel to conferences) 190 Uniforms 1,050 Accounting fees 1,200 High Speed Internet fees 1,850 Legal fees 625 One-time development costs for “DIY for Dummies” 6,800 Automobile maintenance (Tundra) 750 Office supplies 240 Advertising on other sites 4,000 Health Insurance*** 3,260 Community College course** 1,100 Book/software for CC course (required)** 225 Individual Retirement Account contribution*** 5,500 Office Rent**** 12,000 Property Insurance***** 6,000 ^Of this amount, $15,000 is from a contract with Spenard Builders Supply. Under this contract, signed on September 26, 2015, Mollie will host their advertising for two years on her website. *These are continuing education courses for Mollie. **This was an advanced Java course. ***for Mollie ****Mollie paid rent for the current year on January 1 at a rate of $1,000 per month. *****Mollie purchased the policy on September 1 and paid for 2 years In addition to the above information, Mollie has provided the following information for her vehicle, a 2014 Toyota Tundra Hybrid, which she uses for both business and personal purposes. She uses an app to keep track of her mileage. In the past year, Mollie drove 3,000 business miles 10,000 personal miles, and 150 miles for charity. In past years, Mollie kept track of her mileage in a written log, but never kept records for her actual vehicle expenses, and never took any depreciation on her truck. While Mollie is working, she usually wears her uniform, khaki pants and a specially designed shirt that comes from LL Bean. These shirts are button front, red (Troy red, as Mollie is a Trojan through and through) with long sleeves and an embroidered logo reading “HandyWomanRocks.com”. Sometimes though, when she can’t sleep, she works in her pajamas in the middle of the night. Required: Based on the information provided above, fill out Mollie’s 2016 Form 1040 Schedule C, as of December 31, 2016. Mollie’s employer ID number is 05-7861342 and her principal business code is 541990. Her business is located at 5678 Hammer and Nail Blvd, Boston, Massachusetts. Answer the following: 1. Are there any taxes Mollie is responsible for paying in relation to her business? Where would they be reported? 2. Calculate any taxes from #1. 3. If there are any items above that are not reported on Schedule C, list those items. Identify where they should be reported, or if they should not be reported. If they should not be reported, why not? Turn the assignment in, on paper, stapled, in the following order: Schedule C, answers to the questions, workpapers. Be sure to indicate anyone you have worked with in completing the assignment.
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Running head: ANSWER TO QUESTIONS

1

Answer to Questions
Name
Institution

ANSWER TO QUESTIONS

2
Answer to Questions

Are there any taxes Mollie is responsible for paying in relation to her business? Where
would they be reported?
Mollie is responsible for the payment of self-employment tax for the income profit
generated by the business for the reporting year, which is $35,501. As a sole proprietor, Mollie is
expected to make contributions to the Social Security and Medicare Systems when paying her
other income taxes. Unlike employees that contribute half of their earnings into the program,
Mollie is expected to pay the entire 15.3% and report it on Schedule SE.
Calculate any taxes from #1.
The net profit for Mollie’s business in 2016 is $35,501.
The self-employment tax payable at the rate of 15.3% is 35,501 x 15.35 = $5,431.653
If there are any items above that are not reported on Schedule C, list those items.
Identify where they should be reported, or if they should not be reported. If they should
not be reported? why not?
All the items listed in the financial statement are to be reported in Schedule C


SCHEDULE C
(Form 1040)

Profit or Loss From Business

OMB No. 1545-0074

2017

(Sole Proprietorship)
to www.irs.gov/ScheduleC for instructions and the latest information.
▶ Attach to Form 1040, 1040NR, or 1041; partnerships generally must file Form 1065.
▶ Go

Department of the Treasury
Internal Revenue Service (99)

Attachment
Sequence No. 09

Name of proprietor

Social security number (SSN)

Mollie Gee
A
Principal business or profession, including product or service (see instructions)

B Enter code from instructions

DIY for Dummies
C
Business name. If no separat...


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