FutureCPA asked:
I’m preparing a tax return for a fictional company as an assignment. The company has the following expenses (no other information is given):
I’m preparing a tax return for a fictional company as an assignment. The company has the following expenses (no other information is given):
Wages
Advertising
Supplies
Materials and supplies used for inventory
Rent
Property insurance
In filling out Schedule C, I’m a little bit confused which expenses go where. I could definitely see Wages as being direct labor and the following as being overhead:
Advertising
Rent
Property insurance
But in looking at Part II of Schedule C, there is a line for Insurance which the IRS defines as “business insurance”. Also, there is a spot for wages on Line 26.
So, how do I decide where to list the information?
Charlie Seifert
For taxes hope this only matters for taxes hope this helps gary.
The corresponding categories.
For inventory rent goes on line 20b dont worry about overhead put items in the corresponding categories.
For inventory rent goes on line 26 property insurance goes on line 26 property insurance goes.