Schedule C business Flashcards
Questions to the client about the business
The paid preparer MUST ask additional questions to ensure that the amounts reported are consistent and complete; for example:
- How did you calculate this amount?
- What services did you provide?
- How and with what frequency were you paid for providing these services?
- Do you utilize a specific or shared personal bank account for your business? If either, how often did you deposit your earnings into this account?
- How do you keep track of your income (when and how were you paid
Documentation customer should maintain for proof of income
- Bank statements and deposit slips.
- Receipt books.
- Point of sale (POS) records.
- Invoices.
- Credit card documentation.
- Form 1099-NEC, 1099-K, 1099-MISC.
- Ledger or other system the business owner uses to record the receipts of the business
Documentation customer should maintain for Purchases
- Canceled checks.
- Cash register receipts.
- Credit card sales slips.
- Invoices.
Using Actual Expense Method for Auto
Client must have good records keeping, receipts , Gas, Insurance, Maintenance , repairs, parking, and Tolls, The actual method doses not use miles/if you used Actual last year only use Actual
Using Standard Method
You need to know and provide when the car was placed in service and the number of miles driven for business, commuting, or other purposes; whether there is another car available for personal use and whether your business car. Its best to use this method when you do not have documentation for actual Expenses
Using Standard Method
You need to know and provide when the car was placed in service and the number of miles driven for business, commuting, or other purposes; whether there is another car available for personal use and whether your business car
Mileage Rate
New Standard Mileage Rate Beginning on January 1, 2022, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 58.5 cents per mile driven for business use,
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