MGMT 504 Project: 2018 Federal Individual Income Tax Return

This document presents a solved individual income tax return project, focusing on the completion of the 2018 Federal Form 1040 and associated schedules. The project includes detailed calculations and entries for various income sources, deductions, and credits, adhering to the guidelines provided in the assignment brief. Key components of the project include Schedule A (Itemized Deductions), Schedule C (Profit or Loss from Business), Schedule D (Capital Gains and Losses), and Schedule SE (Self-Employment Tax), along with worksheets for Qualified Business Income Deduction, Qualified Dividends and Capital Gain Tax, and Child Tax Credit. The solution demonstrates the application of relevant tax laws and regulations to accurately determine the individual's tax liability for the given tax year. Desklib provides this solved assignment as a resource for students to enhance their understanding of individual income tax return preparation.

SCHEDULE C
(Form 1040)
Department of the Treasury
Internal Revenue Service (99)
Profit or Loss From Business
(Sole Proprietorship)
▶ Go to www.irs.gov/ScheduleC for instructions and the latest information.
▶ Attach to Form 1040, 1040NR, or 1041; partnerships generally must file Form 1065.
OMB No. 1545-0074
2018Attachment
Sequence No.09
Name of proprietor Social security number (SSN)
A Principal business or profession, including product or service (see instructions) B Enter code from instructions
▶
C Business name. If no separate business name, leave blank. D Employer ID number (EIN) (see instr.)
E Business address (including suite or room no.)▶
City, town or post office, state, and ZIP code
F Accounting method: (1) Cash (2) Accrual (3) Other (specify)▶
G Did you “materially participate” in the operation of this business during 2018? If “No,” see instructions for limit on losses. Yes No
H If you started or acquired this business during 2018, check here. . . . . . . . . . . . . . . . . ▶
I Did you make any payments in 2018 that would require you to file Form(s) 1099? (see instructions) .. . . . . . . Yes No
J If “Yes,” did you or will you file required Forms 1099?. . . . . . . . . . . . . . . . . . . . . Yes No
Part I Income
1 Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on
Form W-2 and the “Statutory employee” box on that form was checked .. . . . . . . . ▶ 1
2 Returns and allowances. . . . . . . . . . . . . . . . . . . . . . . . . 2
3 Subtract line 2 from line 1. . . . . . . . . . . . . . . . . . . . . . . . 3
4 Cost of goods sold (from line 42). . . . . . . . . . . . . . . . . . . . . . 4
5 Gross profit. Subtract line 4 from line 3. . . . . . . . . . . . . . . . . . . . 5
6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions). . . . 6
7 Gross income. Add lines 5 and 6. . . . . . . . . . . . . . . . . . . . . ▶ 7
Part II Expenses. Enter expenses for business use of your home only on line 30.
8 Advertising . . . . . 8
9 Car and truck expenses (see
instructions) . . . . . 9
10 Commissions and fees . 10
11 Contract labor (see instructions)11
12 Depletion . . . . . 12
13 Depreciation and section 179
expense deduction (not
included in Part III) (see
instructions) . . . . . 13
14 Employee benefit programs
(other than on line 19) .. 14
15 Insurance (other than health) 15
16 Interest (see instructions):
a Mortgage (paid to banks, etc.)16a
b Other . . . . . . 16b
17 Legal and professional services 17
18 Office expense (see instructions) 18
19 Pension and profit-sharing plans. 19
20 Rent or lease (see instructions):
a Vehicles, machinery, and equipment20a
b Other business property. . . 20b
21 Repairs and maintenance .. . 21
22 Supplies (not included in Part III). 22
23 Taxes and licenses . . . . . 23
24 Travel and meals:
a Travel. . . . . . . . . 24a
b Deductible meals (see
instructions) . . . . . . . 24b
25 Utilities . . . . . . . . 25
26 Wages (less employment credits) .26
27 a Other expenses (from line 48) .. 27a
b Reserved for future use. . . 27b
28 Total expenses before expenses for business use of home. Add lines 8 through 27a. . . . . . ▶ 28
29 Tentative profit or (loss). Subtract line 28 from line 7 .. . . . . . . . . . . . . . . . 29
30 Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829
unless using the simplified method (see instructions).
Simplified method filers only: enter the total square footage of: (a) your home:
and (b) the part of your home used for business: . Use the Simplified
Method Worksheet in the instructions to figure the amount to enter on line 30. . . . . . . . . 30
31 Net profit or (loss). Subtract line 30 from line 29.
• If a profit, enter on both Schedule 1 (Form 1040), line 12 (or Form 1040NR, line 13) and on Schedule SE,
line 2. (If you checked the box on line 1, see instructions). Estates and trusts, enter on Form 1041, line 3.
• If a loss, you must go to line 32.
} 31
32 If you have a loss, check the box that describes your investment in this activity (see instructions).
• If you checked 32a, enter the loss on both Schedule 1 (Form 1040), line 12 (or Form 1040NR,
line 13) and on Schedule SE, line 2. (If you checked the box on line 1, see the line 31 instructions).
Estates and trusts, enter on Form 1041, line 3.
• If you checked 32b, you must attach Form 6198. Your loss may be limited.
} 32a All investment is at risk.
32b Some investment is not
at risk.
For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11334P Schedule C (Form 1040) 2018

Schedule C (Form 1040) 2018 Page 2
Part III Cost of Goods Sold (see instructions)
33 Method(s) used to
value closing inventory: a Cost b Lower of cost or market c Other (attach explanation)
34 Was there any change in determining quantities, costs, or valuations between opening and closing inventory?
If “Yes,” attach explanation. . . . . . . . . . . . . . . . . . . . . . . . . . Yes No
35 Inventory at beginning of year. If different from last year’s closing inventory, attach explanation. . . 35
36 Purchases less cost of items withdrawn for personal use. . . . . . . . . . . . . . 36
37 Cost of labor. Do not include any amounts paid to yourself .. . . . . . . . . . . . . 37
38 Materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . 38
39 Other costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
40 Add lines 35 through 39. . . . . . . . . . . . . . . . . . . . . . . . 40
41 Inventory at end of year. . . . . . . . . . . . . . . . . . . . . . . . 41
42 Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4 .. . . . . 42
Part IV Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on lin
and are not required to file Form 4562 for this business. See the instructions for line 13 to find out if you m
file Form 4562.
43 When did you place your vehicle in service for business purposes? (month, day, year)▶ / /
44 Of the total number of miles you drove your vehicle during 2018, enter the number of miles you used your vehicle for:
a Business b Commuting (see instructions) c Other
45 Was your vehicle available for personal use during off-duty hours?. . . . . . . . . . . . . . . Yes No
46 Do you (or your spouse) have another vehicle available for personal use?.. . . . . . . . . . . . . Yes No
47a Do you have evidence to support your deduction?. . . . . . . . . . . . . . . . . . . . Yes No
b If “Yes,” is the evidence written?. . . . . . . . . . . . . . . . . . . . . . . . . Yes No
Part V Other Expenses. List below business expenses not included on lines 8–26 or line 30.
48 Total other expenses. Enter here and on line 27a. . . . . . . . . . . . . . . . 48
Schedule C (Form 1040) 2018