Answers will be posted in responses section in about 1 week.

This is for my own review and organization of class notes for a tax course I am taking right now.

1 What types of income should be reported on schedule C?

2 What income reporting form will an independant contractor sometimes receive from the person which paid him for his services?

3 Line F of Sch C asks for the accounting method used in the business. What ios the difference between accrual and cash methods?

4 What accounting method must generally be used for inventory?

5 If a proprietor uses the accrual method for accounting for his inventory and the cash method for his operating expenses, what is this called?

6 What does it mean if a proprietor "materially participates" in the business?

7 Why is it important to know whether a proprietor materially participates?

8 What must be done if the income here is reported on a W-2?

9 What are returns and allowances?

10 How is cost of goods sold determined?

11 Does every business have a cost of goods sold?

12 How is gross profit determined?

13 If the client has contract labor, what should you remind the client that they should do?

14 How can we determine the difference between materials and supplies used in figuring the cost of goods sold and supplies that go to line 22?

15 If a schedule C filer has deductable home office expenses, where are they deducted on schedule C?

16 The amount on line 31, schedule C represents a net profit or loss. To what two places is this figure carried after schedule C completes?

17 What is the purpose of self employment tax?

18 What amounts does a proprietor have at risk?

19 What difference does it make if the proprietor is at risk or not?

20 What impact will a net operating loss (NOL) have on either a prior year's return or a future return?

21 In what way is a clergy member's compensation treated differently than compensation for other employees?

22 What non taxable benefit do many clergy members receive?

23 How is the FMV of a parsonage or a minister's housing allowance treated on a tax return?

24 How can you tell if a taxpayer is a statutory employee?

25 What are some taxpayer occupations which might be statutory employees?

26 Are social security and medicare taxes withheld from statutory employees?

27 Is income tax withheld from statutory employees?

28 Where should you report the income of a statutory employee?

29 What special treatment is available to self employed taxpayers with regard to health insurance premiums they pay?

30 How is the deduction limited?

31 A married taxpayer has income from self employment, and his spouse is employed. His spouse's employer offers health insurance, but the couple chooses not to participate in the plan offered by the company. Instead they purchase their own insurance. May they take the deduction for self employed health insurance?

32 What happens to any portion of the premiums that cannot be deducted as an adjustment to income?

33 What is SEP?

34 May an employee contribute to his SEP IRA or seperate IRA ub addition to his employer's contribution?

35 Are employer's contributions to an employee's SEP-IRA reported on his tax return?

36 What is the 3 year of profit test?

37 What are the 9 profit factors?

38 What form and schedule will a taxpayer with farming income file?

39 What activities are considered farming activities?

40 Matthew breeds cocker spaniels for sale as pets. What schedule will Matthew use?

41 Where would amounts from the following forms be entered on 1040:
a) Line 31 Sch C
b) Line 5 Sch SE
c) Line 6 Sch SE

42 When should these amounts be entered on form 1040?

43 How would you report the income of a taxpayer who has W-2 income and 2 or more seperate businesses?