Income tax act(fill Form1040 Schedule C)

Mollie Gee is the sole proprietor of a cash basis, Internet based, business providing handywoman advice and tips for do-it-yourself home improvement wannabes.

Her site, HandyWomanRocks.com, also serves as a look up portal for reputable contractors providing a wide variety of home repair services, similar to Angie’s List. Mollie receives fees from the contractors for referrals that result in jobs from her site.

Since HandyWomanRocks.com is such a popular site, Mollie receives advertising revenue from Home Depot, Lowes, Tractor Supply, Ace Hardware and Spenard Builder Supply, among other companies. She records the revenue as she receives it. Sometimes she receives revenue and then is obligated to host the advertising for a certain period after the payment.

Mollie has published an ebook, “DIY for Dummies,” sold on her website. Mollie also has a DIY blog.

For the current year, she has the following revenue and expenses:

Revenue from advertising on her site^$ 56,500

Revenue from referrals 28,550

Revenue from book sales 9,900

Revenue billed but not received (for services not yet rendered) 2,001

Home improvement conference registrations* 4,500

Travel to conferences 1,250

Hotels at conferences 420

Meals (at conferences and during travel to conferences) 190

Uniforms 1,050

Accounting fees 1,200

High Speed Internet fees 1,850

Legal fees 625

One-time development costs for “DIY for Dummies” 6,800

Automobile maintenance (Tundra) 750

Office supplies 240

Advertising on other sites 4,000

Health Insurance*** 3,260

Community College course** 1,100

Book/software for CC course (required)** 225

Individual Retirement Account contribution*** 5,500

Office Rent**** 12,000

Property Insurance***** 6,000

^Of this amount, $15,000 is from a contract with Spenard Builders Supply. Under this contract, signed on September 26, 2015, Mollie will host their advertising for two years on her website.

*These are continuing education courses for Mollie.

**This was an advanced Java course.

***for Mollie

****Mollie paid rent for the current year on January 1 at a rate of $1,000 per month.

*****Mollie purchased the policy on September 1 and paid for 2 years

In addition to the above information, Mollie has provided the following information for her vehicle, a 2014 Toyota Tundra Hybrid, which she uses for both business and personal purposes. She uses an app to keep track of her mileage. In the past year, Mollie drove 3,000 business miles 10,000 personal miles, and 150 miles for charity. In past years, Mollie kept track of her mileage in a written log, but never kept records for her actual vehicle expenses, and never took any depreciation on her truck.

While Mollie is working, she usually wears her uniform, khaki pants and a specially designed shirt that comes from LL Bean. These shirts are button front, red (Troy red, as Mollie is a Trojan through and through) with long sleeves and an embroidered logo reading “HandyWomanRocks.com”. Sometimes though, when she can’t sleep, she works in her pajamas in the middle of the night.

Required:

Based on the information provided above, fill out Mollie’s 2016 Form 1040 Schedule C, as of December 31, 2016.

Mollie’s employer ID number is 05-7861342 and her principal business code is 541990.

Her business is located at 5678 Hammer and Nail Blvd, Boston, Massachusetts.

Answer the following:

1. Are there any taxes Mollie is responsible for paying in relation to her business? Where would they be reported?

2. Calculate any taxes from #1.

3. If there are any items above that are not reported on Schedule C, list those items. Identify where they should be reported, or if they should not be reported. If they should not be reported, why not?

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