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Can anyone help me?
Mr X, a Insurance Agent (Self Employed)
-Earnings from Non employee compensation 85000.
-Drove for business 26000 miles, his commute was 1200 and personal miles were 3000 . (what is the code section)
-Actual auto expenses is 500. Where will this deduction go? and how
-Used Ford focus worth 20000, He bought it in 1st january. what is the depreciation. Where will it go?
-He has following assest bought on 1st of January.
a. Computer for 1000
b.Furnitur for 2000
-he also paid health insurance for 1400. where will it go?
Which forms will be used and how to calculate all the above items.
Non employee compensation – Schedule C income
auto mileage – form 4562, page 2, which carries over to the schedule C – under auto expenses. mileage for 2006 was 44.5 per mile. Unless he drove two different cars, Mr X has to chose either mileage or actual expenses, he cannot take both for the same vehicle. And with the actual he is limited to the business %. The only expenses that he can take whether he is taking actual or mileage is auto excise taxes and auto loan interest, but only for the % that is business. If the Ford focus is the only car that he drives, once again he can take either mileage or actual (gasoline, repairs, insurance, registration, auto excise, auto loan interest, etc) and the cost of the car would be part of the actual expenses. Computer and Furniture would be also reported on Form 4562, and more than likely his better benefit would be to expense them in the year of purchase using sec 179 deprection. Health insurance of 1400 will be reported on page 1 under the adjustments sections on the line for Self-Employed Health Insurance (SEHI).
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