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HEAVEN’S HARVEST

MINISTRIES – FINANCE NIGHT

Small Bus - Schedule C and Other Tax Forms

Presented by: Jennoa R. Graham, Ph.D.

Friday, April 12, 2013

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KEY TERMINOLOGY Income – Money that is received in exchange

for a product, service or contract agreement

Expense – Money that is paid out in exchange for a product, service or contract agreement

Depletion – consumption of a resource faster than it is replenished (natural resources)

Self Employment (SE) Tax – tax rate applied to SE income in addition to federal taxes

Income – Expenses = Profit (Loss)

= Surplus (Deficit)

Profit = SurplusLoss = Deficit

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KEY TERMINOLOGY (CONT.) Estimated Tax – Installment payments

made by independent contractor/ SE owner from the total income received for services or product sales

IRS Form 1040-ES – voucher used to submit estimated federal income tax installment payments

GA Form 500ES - voucher used to submit estimated Georgia state income tax installment payments

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OVERVIEW Briefly review tools for calculating the

dollar amount of estimated tax

Review components of Schedule C – Profit (Loss) From a Business

Review components of Form 8829 – Expenses for Business Use of Your Home

Review components of Schedule SE – Self Employment Tax

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ESTIMATED TAX Federal Installments- Voluntary

1040-ES Estimated Tax Worksheet (Prepay)Tax Season (1040-V, may include penalty

fees)See www.irs.gov for more information

State of GA Installments – Voluntary 500-ES Individual and Fiduciary Estimated Tax

Payment Voucher (Prepay) GA-9465 Installment Agreement Request (Tax

Season) See www.etax.dor.ga.gov for more

information

Also see “Tax Withholdings and

Estimated Payments” presentation and

documents

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SCHEDULE C – PROFIT (LOSS) Information Section – Basic information

about the business

Part I – Income and Cost of Goods SoldHow much money did you make?Are sales properly recognized?

Part II – Expenses (Home use excluded)

Business use of home and Net Profit (Loss)

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FORM 8829 – BUSINESS USE OF HOME Part I - Quantifies how much of your

home is used for business

Part II – Calculates the allowance (deduction) assigned to the quantified use of your home

Part III – Home Depreciation assigned to quantified use of your home

Part IV – Casualty losses and negative operating expense are not deductible

*See tax advisor

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SCHEDULE SE – SELF EMPLOYMENT Short form vs. Long form

Short = less detailLong = more detailChurch employee or farming income = Long

Determines if SE tax applies to income

Calculates amount of tax owed

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QUIZ What form is used to file GA estimated

taxes?Form 500ES

What line on Schedule C would tax preparation fees be reported?Line 17

What line on Schedule C would home real estate taxes be reported?Line 30

What is the minimum dollar amount earned to qualify for self-employment tax?$400

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REFERENCES IRS (2013). Tax forms and definitions.

Internal Revenue Code, Retrieved March 5, 2013, from http://www.irs.gov

GA Dept of Revenue (2013). Tax forms and definitions. Office of Tax Policy, Retrieved March 6, 2013, from http://etax.dor.ga.gov

The American Heritage® Dictionary of the English Language (2009), Fourth Edition, Houghton Mifflin Company. Retrieved March 6, 2013, from http://www.thefreedictionary.com