Advance tax

Anonymous
timer Asked: Mar 1st, 2018
account_balance_wallet $45

Question description

Davy Jones needs to file taxes for his business and provides the following information.

Using your Tax Guide, you determine you’re going to be required to prepare a 1040 Schedule C Profit or Loss form a Business and 1040 Schedule SE Self Employment Tax for Jones’ Sole Proprietorship.

Davy Jones’ Nautical Tours is owned and operated as a Sole proprietorship by David K. Jones (SSN 000-00-0000)

Principal Business or Professional Activity Code; 114110
Principal business; Charter fishing tours
Employer Identification Number 867530950

Business address
1008 North Harbor Drive
San Diego, CA 92103

Home address
8700 Lake Murray Blvd #2
San Diego, 92119

  • The cash accounting method is utilized
  • Jones did materially participate in the operation of the business
  • The business started January 1st, 2012

Wages consist of $25,000 paid to one employee and $15,000 to another
Depreciation expense; Jones owns a fishing boat, The Jolly Roger, which he purchased for $850,000. The depreciation on the income statement is book depreciation and will differ from what is actually used on Line 13 Depreciation of form 1040 Schedule C.
The boat is depreciated using the Modified Accelerated Cost Recovery System (MACRS), half year convention, is in its 4th year of service and the 10-year recovery period is used.
Utilize Publication 946 How to Depreciate Property to calculate the correct depreciation amount to enter on the 1040 Schedule C. Locate Table A1 in the Appendix to calculate the tax-deductible depreciation.
Interest expense is interest paid on the loan for the boat
Insurance payments were made to cover liability for guests and for the boat
Payroll taxes; Federal Insurance Contributions Act (FICA); Social Security and Medicare payments made on the behalf of employees
Federal Insurance Contributions Act (FUTA) made on behalf of employees
Travel was purely for business purposes
Parking fines are tickets Jones received for parking illegally
Lease expense was paid to Honda Motors for his mother’s car lease, who is not involved in the business in any way


Davy Jones’ Nautical Tours 2016 Income Statement

Revenue

$ 400,950.00

Wages

$ 40,000.00

FICA

$ 3,060.00

FUTA

$ 85.00

Depreciation

$ 85,000.00

Interest

$ 43,900.00

Advertising

$ 6,350.00

Supplies

$ 23,795.00

Legal fees

$ 6,940.00

Insurance

$ 26,700.00

Boat slip rental

$ 33,010.00

Travel

$ 6,250.00

Office expense

$ 7,940.00

Parking fines

$ 1,350.00

Lease expense

$ 3,650.00

Net Profit

$ 112,920.00


Assignment Guidelines

To prepare the Sole Proprietorship’s tax return, complete the following steps:
  1. Ensure that you have Adobe Reader installed on your computer to open and use the downloadable IRS forms.
  2. Go to the IRS Web site and download the fill-in tax forms that you will need to complete.
  3. Complete all necessary downloaded fill-in forms on the computer and save.
  4. Save the completed forms as PDFs and upload for grading.
  5. You may not utilize Tax preparation software to complete this assignment! This constitutes cheating!
  6. Save the completed forms as PDFs and upload for grading; double check your PDFs to ensure data was retained when they were uploaded to Submitted Assignments; blank forms will yield 0 points!
You will be required to fill out and submit the following forms: Please submit your assignment.



For assistance with your assignment, please use your text, Web resources, and all course materials.

Other Information

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Tutor Answer

wambuiguama
School: UIUC

Hello! I have uploaded the answer
to this question. Please have a look at it and get back to me in case of
anything. Thank you.
Hello! I have uploaded the answer
to this question. Please have a look at it and get back to me in case of
anything. Thank you.

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

Social security number (SSN)

Name of proprietor

David K. Jones

000-00-000

A
Principal business or profession, including product or service (see instructions)
Charter Fishing Tours

B Enter code from instructions

1 1 4 1 1

C
Business name. If no separate business name, leave blank.
Davy Jones’ Nautical Tours

D Employer ID number (EIN) (see instr.)

8

6

7

5

E

Business address (including suite or room no.)

F
G
H

City, town or post office, state, and ZIP code
(2)
Accrual
(3)
Other (specify) ▶
Accounting method:
(1) ✔ Cash
Did you “materially participate” in the operation of this business during 2017? If “No,” see instructions for limit on losses
If you started or acquired this business during 2017, check here . . . . . . . . . . . . . . . . .

I
J

Did you make any payments in 2017 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

.
.

.
.

2
3
4
5
6

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) .

.
.
.

.
.
.

7

Gross income. Add lines 5 and 6 .

.

.

8

Advertising .

9

Car and truck expenses (see
instructions) . . . . .
Commissions and fees .

Part II

10
11
12
13

.

.

.

.

Employee benefit programs
(other than on line 19) . .
Insurance (other than health)

15
16

.

.

.

8

9

5

0

.

.

.

.

.

.

6350

00 18
19
20

9
10

a

11
12

b
21
22

13

85000

23
00 24

14
15

3145
26700

00
00

a
b
25

.
.

.
.

.
.

.
.

.



Yes

No



.
.

Yes
Yes



No
No

1

400950

00

2
3

0
400950

00
00

.
.
.

4
5
6

23795
377155
0

00
00
00



7

377155

00

Office expense (see instructions)

18

7940

00

Pension and profit-sharing plans .
Rent or lease (see instructions):
Vehicles, machinery, and equipment

19
20a

33010

00

Other business property . . .
Repairs and maintenance . . .
Supplies (not included in Part III) .

20b
21
22

Taxes and licenses . . . . .
Travel, meals, and entertainment:
Travel . . . . . . . . .

23
24a

6250

00

Deductible meals and
entertainment (see instructions) .
Utilities . . . . . . . .

24b
25

Wages (less employment credits) .
Other expenses (from line 48) . .
Reserved for future use . . .

26
27a
27b

40000
0

00
00

.

.

.

.

.

.

Expenses. Enter expenses for business use of your home only on line 30.

Contract labor (see instructions)
Depletion . . . . .
Depreciation and section 179
expense
deduction
(not
included in Part III) (see
instructions) . . . . .

14

.

0

1008 North Harbor Drive San Diego, CA 92103

Gross receipt...

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Anonymous
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