http://www.irs.gov/pub/irs-pdf/f1040.pdfOriginally Posted by David Merrill
http://www.irs.gov/pub/irs-pdf/f1040sc.pdf
I already have 2 stamps, thanks.
Specifically, as I mentioned using the example of gross revenue
at 100K.
Assuming a tax liability of say 20K. (These were revenue that I was unable to
get my RE on, electronic transfers, direct deposits, etc)
All other monies were lawful money redeemed (80K) via RE (restricted endorsement)
My cost of doing business was 30K. (Space rent, utilities, advertising, etc.)
On the 1040
Line 12 - (-10K)
Line 22 - (-10K)
line 37 - (-10K)
Line 38- (-10K)
Line 40 - (11.6K) Standard Deduction
Line 41 - (-21.6K)
Line 42 - (22.2K) 6 Dependents
Schedule C:
Line 1b - (20K)
Line 1d - (20K)
Line 3 - (20K)
Line 5 - (20K)
Line 7 - (20K)
Lines 8 - 27 Business operating costs - (30K)
Line 28 - (30K)
Line 29 - (-10K)
Line 31 - (-10K)
Now here's the kicker. If you claim a loss for more than 3
years the IRS will consider your business a business no longer,
it a hobby.
So this is how redeeming lawful money looks on the actual tax return of
a Sole Proprietor.
The above is of course simplified. On top of that there are 1099K and 1099MISC
which are declared by PayPal and merchant accounts if you plan to actually be
solvent and take credit cards.
So in 2012 the IRS will also get a 1099K from my merchant processors showing
that remaining 80K, which is unaddressed at all in the above return.
Then, there is the local borough sales tax quarterly, which they expect to match
your fed return.
So if anyone can contribute to help make this process better I'd greatly appreciate it.
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