INCOME TAX: Chapter 12:Self-Employment

The business address line on Schedule C can be left blank if address is the same one on their ________

1040

Credit and debit card payments processed as merchant cards or third-party transactions are reported to taxpayer on Form _________

1099-K

On which line of Form 1040 is the net profit/loss from Schedule C Line 31 entered? Line

12

Self employment tax is ______% (SS) + _____% (Medicare) of net earnings (92.35% of profit/loss)

12.4, 2.9

Gift Expenses: $_____ per person per year

25

To determine net earnings, multiply profit/loss amount From Schedule C Line _____ by ______%

31, 92.35

Taxpayers are subject to self-employment tax if their net earnings are above $_______

400

On which line of Form 1040 is self-employment tax reported?

57

Anyone who pays a taxpayer $_______ or more for work as an independent contractor should receive a 1099-MISC. Where Box ____: Non-employee compensation is included in the business income.

600, 7

Form for Business Use of Your Home is Form _______

8829

Gross receipts reported on Schedule C, Line 1 are found in ________ ____ of Form 1040

Box 7

The amount of income the taxpayer reports in a bartering transaction is the ______ when it was recieved

FMV

Which part of Schedule C are business expenses reported and totaled?

Part 2

Form on which self employment income and expenses are reported. More than one are used if there is more than one business.

Schedule C

Form to calculate Social Security and Medicare taxes due on net earnings from self-employment

Schedule SE

Reporting taxpayer's income in the year they EARNED it, and taxpayer's expenses in the year they INCURRED them, no matter when the payments were made: __________ method of accounting

accrual

To find business-use percentage on car divide ________ miles by _______ miles

business, total

Including business income in the year received and deducting expenses in the year paid is the __________ accounting method

cash

Most self=employed individuals with no inventory use ______ method of accounting

cash

Wages for employees are

deductible

Self employed individuals can deduct _______ of their self employment tax as deduction on Form 1040 Line ______

half, 27

Taxpayer can only include bad debt expenses if they included the same amount in their ____________

income

For self-employed people, EITC is determined by _____ ______ (Form 1040, Line 12) - adjustment for deductible part of self-employment tax

net profit

Workers who are independent contractors under the common law are called _________ ___________

statutory employees

Find EIC amount using worksheet and EIC ______

table