Acct 402
Schedule C
Richard Head operates his private detective business as a sole-proprietorship. The tax year 2015 was his second year as a self-employed private detective, attached is his Income Statement for 2015.
In 2014 he used the standard mileage rate to calculate his business auto deduction, In 2015 he drove his 2006 Impala a total of 25,000 miles, of which 20,000 miles was for business and 5,000 personal (including 2,000 miles commuting).
Mr. Head’s only other source of income was $5,000 in wages from School as an adjunct physics professor.
Why might Mr. Head not want to elect Section 179
RICHARD HEAD, PRIVATE EYE, INCOME STATEMENT-CASH BASIS
YEAR ENDED December 31,2015
Revenue from fees 120.000
Bank interest received 20
Total revenue 120.020
Expenses
Advertising 3.000
Auto expense 10.000
Continuing education for detectives 1.000
Depreciation 770
Licensing fees 500
Lunches with the client 2.000
Office rent 12.000
Office utilities 6.000
Payroll – secretary 35.000
Payroll – part time snoops 20.000
Payroll taxes 5.000
Incentives paid to informants 3.000
Sub – contractors 20.000
Supplies 200
Total Expenses 118.470
Net Income 1.550
Depreciation Schedule
Date Acquired Asset Cost BOOK TAX BOOK
2014 2014 2015
Depr Depr Depr
4/1/2014 Smith & Wesson 38w/ holster 200 15 29 20
7/1/2015 Super snoop camera 5.000 500
10/5/2015 Telescopic lens 1.000 250
770
