Question

Peter is a self-employed attorney. He gives the following information about his business to his CPA for use in preparing his 2022 tax return:

Income
fees from law practice $153,000

Expenses
malpractice insurance $8,000
office rent 12,000
office supplies 5,700
travel expense 2,000
meals from restaurant 6,800
entertainment 4,000
paralegal wages 25,500
country club dues (peter uses the club for business entertainment) 2,500

Peter also drove his car 3,000 miles from Jan 1, 2022 to June 30, 2022 and 2,500 miles from July 1, 2022 to Dec. 31, 2022 for business and used the standard mileage method for computing transportation costs. (You will need to find the standard mileage rate from the textbook)

How much will Peter show on his Schedule C for 2022 for: (COMPLETE SCHEDULE C. SCHEDULE C IS POSTED ON THE BB)
Income _______

Answer 1

To calculate Peter's total income on his Schedule C for 2022, subtract his expenses from his income fees from law practice.

Step-by-step explanation:

To calculate Peter's total income on his Schedule C for 2022, we need to subtract his expenses from his income. Let's start by calculating the total of his expenses:

• Malpractice insurance: $8,000
• Office rent: $12,000
• Office supplies: $5,700
• Travel expense: $2,000
• Meals from restaurant: $6,800
• Entertainment: $4,000
• Paralegal wages: $25,500
• Country club dues (business entertainment): $2,500
• Mileage deduction (using the standard mileage rate): 3,000 miles * standard mileage rate + 2,500 miles * standard mileage rate

Once we have the total of his expenses, we can subtract it from his income fees from law practice of $153,000 to calculate his net income on Schedule C for 2022.