8/3/2019 Schedule C Scenario 4: Thomas and Clare Graham
1/5
VITA Schedule C ProjectTest
Schedule C Test Set4: Thomas and Clare Graham
Taxpayer Documents
Social security cards for Thomas and Clare Graham
Completed intake and interview sheet
Form W-2
Interview Notes
Thomas and Clare are married and want to file a joint return.
They did not itemize for
201and will not itemize for 2014.
Clare worked as a receptionist and received a Form W-2 to report
her wages.
Thomas is a self-employed handyman, doing home repairs. Thomas
drives back
and forth from his home to one job site each day. He
occasionally stops at a local
building supply store to pick up supplies before going on to the
job. Thomas has
a written mileage log that shows that he drove his truck 8,125
miles from home to
the jobs and back. This includes 345 miles from the building
supply store to the
job. He also drove 3,084 other miles that were not related to
his business.
Thomas started using his truck for business on January 5,
2009.
The couple has another vehicle that Clare drives. Clare drove
250 miles going to andfrom work in 2014.
Thomas kept a log that shows that the gross income from his
business was
$33,014. He did not receive a Form 1099-K or a Form 1099-MISC
for any of his
business income.
Thomas is not required to issue any Forms 1099 for his
business.
Thomas is a cash basis taxpayer and he materially participates
in his business.
Thomasrecords show the following business expenses for
20144:
Business use of his cell phone: $722
Clothing and Safety Equipment:
- Jeans $184
- Steel toe boots $212
- Safety goggles $26
Lumber, paint, small tools, and other supplies: $7,410
Table saw, 100% business use, purchased and placed in service
January 12,
2014: $693.
Thomas and Clare bought a used vacuum cleaner for $39 that
Tom
occasionally takes with him on jobs They estimate that about 1/3
of the
vacuum cleaner use is for his business.
Thomas wants to depreciate the cost of the table saw and vacuum
cleaner
under IRC Section 179.
Thomas is not claiming dereciation on any items urchased in a
revious tax year.
8/3/2019 Schedule C Scenario 4: Thomas and Clare Graham
2/5
VITA Schedule C Project Test
Thomas occasionally uses his kitchen table to do recordkeeping
for his business.
He did not keep records of his home expenses, like utilities,
but he knows that he
used 150 sq. ft. for business. The total home size is 1,940 sq.
ft.
Thomas rarely has access to a refrigerator to store his lunch at
the job sites, so hemust eat out on his workdays. He receipts show
that he spent $2,349 on hislunches.
Business liability Insurance: $720
Business license: $125
Equipment trailer, 100% business use, purchased and placed in
service on March
18, 2014: $924. Thomas wants to take MACRS depreciation on the
trailer. He
does not elect to deduct the cost under IRC Section 179. Thomas
also elects not
to claim the special depreciation allowance. The asset type is
Trailer or Trailer
Mounted Container 5 year property.
