...Deductible Educational Expenses FACTS: Sarah May graduated in 1988 from St. John Fisher College with a Bachelor of Science degree in nursing, and soon after became a registered nurse. From 1988-2004, Sarah held a couple nursing jobs, both of which were of a supervisor or manager position. In 2004, Sarah began her current position as a Quality Control Coordinator, which is a nonsupervisory position and did not require an MBA degree. In 2005, Sarah decided to enroll in an MBA program at St. John Fisher College, after feeling at a disposition with her educational background as a Quality Control Coordinator. Sarah’s peer group at work was more educated, many of whom were educated doctors. Sarah graduated in May 2009 with an MBA degree in Health Care Management. Sarah paid for her tuition during the course of the MBA program, and during the 2009 taxable year, she paid $6,500 in educational expenses. ISSUE: Did Sarah May meet the minimum educational requirements necessary to deduct the educational expenses she incurred in 2009, and are these expenses supportive of her desire to maintain or improve current job skills by not qualifying her for a new trade or business? LAW: Under IRC §162(a) a taxpayer may deduct all ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business. Further guidance is provided under Treasury Regulation §1.162-5(a) for educational expenses in regards to a trade or business. Educational expenses...
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...Assignment #2: First Steps Educational Program 08/15/2013 Financial Accounting Professor: Dr. Wendy Achilles Abstract First Steps Educational Program is a program that will incorporate traditional educational methods and Montessori methods. The program will educate students from the age of 2 – 17 years old. Teachers will identify their learning styles early in the program and will create a program that best fits their educational journey. The school will begin in Mississippi and other low performing areas to offer parents and students an alternative to education. Lastly, the school will give back to the community by giving under privileged students scholarships and also a fund will be set up to help build new schools in Haiti. First, with First Steps Educational Program , I will describe the type of business that I have created including: (a) the product or service, and general staffing plan. I will also provide a rationale for my plan, (b) the form of my business and the benefits it offers my particular business, and (c) a chart of accounts specific to my business, including a rationale as to the selection of each account, the sources of those resources (liabilities and equity), the sources of revenue and expenditures that I expect to incur to earn those revenues. I will build a detailed chart that includes business units, divisions, product lines, etc.) Next, I will analyze whether I will...
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...payee and deductible to payer. | Barbara should include $1500 in gross income and Arnold can deduct $1500 from his gross income. | | | | | | | | Q5-26 | | | | | | | US Series EE bonds: the interest on US Series EE bonds is tax exempt when the interest is used for educational purpose; If this is not used for educational purposes then it's a tax deferred bond, which means the purchaser pays tax when he withdraws the money. | bonds for industrial development for mass transit: it's private activity bond which is not tax exempt. | qualified veterans' mortgage bonds: Interest on a private activity bond that is a qualified bond is tax exempt. | Therefore, the investor should choose qualified veterans' mortgage bonds to minimize his tax liability. | | | | | | | | Q6-29 | | | | | | | Salaries and wages to employees | deductible | salaries and wages are business expense | Purchase of new office building | not deductible | capital expenditure is not deductible | Payment of illegal parking fines | not deductible | illegal or in violation of public policy | President's daughter's wedding | not deductible | it's considered personal expense | Entertainment expenses...
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...2010. He listed the property and began renting it successfully in March of 2011. Walter prepared a schedule C and listed a business loss of $29,000, which includes the cost of the training classes, automobile expenses, meals and entertainment, computer and software expenses, and supplies. The IRS has disallowed the deduction of $ 29,000. Issue: Is Walter allowed to deduct the business loss of $29,000 in 2010? Conclusion: The $29,000 loss is not considered as business expense; therefore, no deduction is allowed. Analysis: The loss of $29,000 is not deductible, because Walter was not “engaged in the active conduct of trade or business” in 2010. Under 26 U.S.C.S. § 162, it generally allows deduction for all the ordinary and necessary expense incurred during the taxable year. However, the taxpayer in Woody v. Comm’r, T.C. Memo 2009-93, attempted to deduct his business expense incurred during the taxable year, which he was preparing for starting business. Court considered that “A taxpayer is not carrying on a trade or business under section 162(a) until the business is functioning as a going concern and performing the activities for which it was organized." The expense incurred would consider as “start-up” or “pre-opening” expense rather than business expense. Therefore, there was no deduction allowed. To decide whether a taxpayer is engaged in the active conduct of trade or business, court...
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...THURSDAY | 11:30-2:30 | Professor Ma | S | TUESDAY | 11:30-2:30 | Professor Ma | T | THURSDAY | 4-7 | Professor Beavis | Instructions: This is a closed book test; You are allowed the use of a calculator; If your principal language is not English you are allowed the use of a dictionary. There are 4 questions: attempt them all. Question 1: 20 marks: You have just been employed by EduRom Co. which was organized on January 1st of the current year. The company manufactures and sells a variety of educational DVDs for personal computers. It is your responsibility to supervise the employees who take orders from customers over the phone and arrange for shipping the orders via Federal Express, Canada Post and other freight carriers. The company is unsure how to classify your annual salary in its cost records. The company’s cost analyst says that your salary should be classified as a manufacturing (product) cost; the controller says it should be classified as a selling expense; the president says that it does not matter how your salary cost is classified. Required: Explain the effects of using each of the cost classifications recommended by the three individuals, and make a recommendation as to which one make most sense. Question 2: 30 marks: The trial balance of Tyne Co. as at 1st January was as follows: Cash | $ 7,000 | | Accounts receivable | 12,000 | | Raw materials inventory | 25,000 | | Work-in-process inventory | 5,000 | | Finished goods inventory...
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...sole proprietor is netted with related ordinary and necessary business expenses to determine the effect on AGI. 2. Discuss the concepts of ordinary, necessary, and reasonable in relation to trade or business expenses. Answer: According §162, in order for an expense to be deductible it must be an ordinary and necessary expenditure. The expense must also be reasonable (as established by the courts). A trade or business expense must not only be ordinary and necessary but also reasonable in amount and reasonable in relation to its purpose. The Supreme Court (in Welch, T., 1933, S Ct, 290 US 111) held that in order for an expense to be ordinary, in must be customary or usual in the taxpayers particular business. The necessary criterion refers to an expense that is appropriate and helpful, and not necessarily essential to the taxpayer’s business. Reasonableness is not specifically included by IRC §162, but has been added by the courts. In these cases, the courts held that a trade or business expense must not only be ordinary and necessary but also reasonable in amount and reasonable in relation to its purpose. 3. What form is depreciation reported on and how does it relate to other forms such as Schedule C, E, F, and Form 2106? Answer: Depreciation is reported on Form 4562, and the expenses flow from that forms to other schedules in the tax return. Depreciation is the expense allowed for the wear or loss of usefulness of a business asset. The understanding...
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...Running head: Business Plan Part I- Business Vision Business Plan Part I- Business Vision Business Vision and Values As a new hire for a new startup company I have been tasked with recognizing and exploring a new business opportunity of creating a new product or service for my company. This new business opportunity will ultimately be presented to an executive team in a venture capital group for possible funding and execution. In exploring new opportunities, I believe the company should start with more sustainable efforts and focus on training programs designed to benefit unemployed women in the Memphis community. This new opportunity will provide a twelve week workshop that focuses on five core areas: Education/Computer Literacy, Internships, Financial Literacy, Healthy Lifestyle, and Service. The overall goal is to provide a better quality of life - socially, economically, and physically. This new opportunity will enable women to overcome barriers and to enhance a better quality of life for themselves and their families. It will also utilize practical skills with an emphasis on technological advancement. According to the Tennessee Economic Council on Women’s report, “Status of Women in Shelby County: An Overview” (2004), the Female Unemployment Rate is 7%, the Female High School Dropout Rate is 14.4%, and Women Earning Incomes below the Poverty Level is 17.2%, ranking Shelby county 71st, 85th, and 66th among the 95 counties in Tennessee...
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...HOTEL EXPENSE ACCOUNTING In the accounting terminology, expense is an income statement account representing the cost of items consumed in the process of generating revenue (ex. Cost of Goods Sold) or that expires due to the passage of time (ex. Depreciation Expense). Expense cannot be mixed with expenditure. For, Expenditure represents the purchase amount (whether paid in cash or credited with the Accounts Payable) of a certain asset. To illustrate, suppose, on January 1st, 2001, XYZ Company paid $ 10,000 cash in order to purchase some equipment this is called expenditure and is journalized as follows: Cash $ 10,000 Equipment $ 10,000 However, on December 31st, 2001, XYZ shall allocate a certain value of the initial investment of equipment to be placed as an expense to show that a certain portion of the equipment has been already used to contribute to Company's revenue. Suppose that this amount was determined to be $ 650. This very amount is called an expense and is journalized as follows: Depreciation Expense-Equipment $ 650 Accumulated Depreciation-Equipment $ 650 According to the matching principle, all expenses must be recorded in the same accounting period as the revenue that they helped to generate. In the hotel industry, expenses are divided into two main categories: • Direct Expenses: These are the expenses that vary with the level of production. For example, in the Food and Beverage department, the Cost of Food Sales is a direct...
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...Mission Statement Smooth Look Detailing is committed to providing quality service offering convenience to customers, top of the line products, and a finished product that makes cars look like they just drive out of the showroom. Our mobile service allows our customers the flexibility to utilize our services at a location convenient to them. Our corporate culture is defined by 4 commandments: * Treat all customers and employees with dignity and respect * Provide the highest level of service in the field * Maintain financial stability * Always work efficiently Here at Smooth Look Detail, we take pride in our work. Vision Statement Smooth Look Detailing has been a dream of the owners for the past decade. Designing a model that is convenient for consumers, as well as charging a price that is profitable to us, and reasonable to the customer is where our niche will be. We understand that our most valuable assets are our employees, and will invest in their training to keep them up to date with the latest techniques in the detailing field. As we begin with 3 trucks, and 8 detailers, the 5 year plan will be to double our detail staff. This will create many opportunities as well as the need for another layer of management. We are firm believers of promoting from within, and by investing in the education of our people we are positioning ourselves to do so. Our marketing efforts as well as our finished product will be the key to branding out name. As our marketing...
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...moderators, correctors and staff of the Order make sure that they are respected. Note: Wherever there is a difference in interpretation, the French version of this Guide will prevail over the English version. o Happy reading! 2 2013-2014 Candidate’s Guide Table of contents Note to Readers Chapter 1 CMA Strategic Leadership Program (SLP) 1.1 1.2 SLP objectives and basics The SLP in steps 1.2.1 Phase 1 - Development 1.2.1.1 Learning activities 1.2.2 Case Examination 1.2.3 Phase 2 - Application 1.2.4 Report to the Board 1.2.5 Practical experience Evaluation methods for learning activities and national examinations 1.3.1 Evaluation of learning activities 1.3.2 Evaluation of the national examinations SLP management rules 1.4.1 Educational material and SLP Site 1.4.2 Attendance at interactive sessions 1.4.2.1 Lateness or absences of less than three hours 1.4.2.2 Absences of three hours or more 1.4.3 Group and team formation 1.4.4 Changing groups and teams Other useful information 1.5.1...
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...reflecting the true value of a company and exaggerating it, is a blurry one for some GAAP techniques. One-time charges and investment gains are examples of such techniques, as they are legal ways to represent figures, but can still have a tendency to fool investors into thinking things are better than they really are. One-Time Charges Many high-profile companies have been known to take one-time charges, sometimes known as the "big bath." One-time charges are expenses that the company claims will not occur year after year, and, as such, are not recorded on the income statement but included in a separate charge. One-time charges are technically not recurring and therefore not a true factor affecting the value of the company. So, earnings figures calculated with the one-time charges are usually reported separately from the figures on the income statement, such as net income. (For more on one-time charges read The One-Time Expense Warning.) Unfortunately, companies sometimes use these charges to bury unfavorable expenses or investments that went wrong, which should be recorded on the income statement, where investors could clearly see the true negative effect on the company's...
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...Chapter 1 INTRODUCTION Objective of the Study The study is conducted, which aimed to identify the feasibility of the proposed business “Knights’ Fruit Malabon” at Poblacion, Mawab, Compostela Valley Province. Determining and identifying the procedures of the whole operation of the chosen business from its production, marketing and financing the said business. The objective of the study is to promote the product and create a harmonious relationship towards the customers and in the society. Moreover, to offer good quality products and services not only for the purpose of earning profit but also to meet the customer’s needs and wants. Methodology Having teamwork, hard work and patience are some of the effective keys in order to have a successful feasibility study. Those techniques are being applied by the researchers in order to have a good output of the said research. Different techniques and strategies are being used prior to the day of interview. These techniques such as questionnaires are being distributed to the prospect buyers in order to gather data like their preferences in terms of our offered products. And then all date gathered are analyze by the researchers in order to come up with a comprehensive feasibility study. Scope and Limitation of the Study One of the limitations of the study is that the business is limited on its target market capacity of purchasing. In terms of its production, the proposed business hence, the limitations of the tools equipment...
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...Entrepreneurship Fanny Smith May 1, 2014 Vision To become the most exclusive place for entertainment and dining in Nicaragua. Mission To provide high quality services to every single customer when referring to meals and nightlife in Managua, with 100% protection guaranteed. What is your favorite place to go out in Managua? What restaurant do you prefer the most? Those are some of the many questions people from Nicaragua and outside the country ask frequently when they want to have fun in the city of Managua. We as a group found a business opportunity in the market of Managua. We have been doing some research about Nicaraguan market preferences, and we are trying to understand the different needs and wants they have. By asking some specific questions to a few of them we have found some vital primary information. Besides, we have been doing some observatory research to analyze certain behavior from people around different areas of Managua such as Gallerias and Metrocentro. In this project, we are focusing on providing a unique place to the Nicaraguan market where people can enjoy between their families or friends in one spot. This new business will be a two-floor building divided into three main areas: restaurant and bar(first floor), Night Club(second floor). This new place will be named ChillZone. At ChillZone customers will have the freedom to choose where they want to be according to the purpose of the visit. The benefits of this place is that everything...
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...CONTROL NUMBER DEPENDENCY STATEMENT - PARENT OMB No. 0730-0014 OMB approval expires Nov 30, 2010 The public reporting burden for this collection of information is estimated to average 1.25 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing the burden, to the Department of Defense, Washington Headquarters Services, Executive Services Directorate, Information Management Division, 1155 Defense Pentagon, Washington, DC 20301-1155 (0730-0014). Respondents should be aware that notwithstanding any other provision of law, no person shall be subject to any penalty for failing to comply with a collection of information if it does not display a currently valid OMB control number. PLEASE DO NOT RETURN YOUR FORM TO THE ABOVE ORGANIZATION. RETURN COMPLETED FORM TO YOUR LOCAL SERVING PERSONNEL/PAYROLL OFFICE. PRIVACY ACT STATEMENT AUTHORITY: P.L. 93-64; 37 U.S.C., Chapter 7, Section 403; E.O. 9397 (SSN); and DoDFMR 7000.14-R, Vol. 7a, Chapter 26. PRINCIPAL PURPOSE(S): The information will be used to determine the relationship and dependency of the claimed dependents and determine the member's entitlement to authorized benefits. ROUTINE USE(S): In addition to those disclosures generally permitted...
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...CHAPTER 5 INTRODUCTION TO BUSINESS EXPENSES ------------------------------------------------- DISCUSSION QUESTIONS 1. All allowable deductions of individual taxpayers are classified as either for adjusted gross income or from adjusted gross income. Why are deductions for adjusted gross income usually more advantageous than deductions from adjusted gross income? Although both types of deductions reduce taxable income, deductions for adjusted gross income are always deductible. Taxpayers who incur allowable deductions from adjusted gross income may not receive the full advantage of the deduction. First, even though an allowable expense may be incurred, if the taxpayer’s total itemized deductions do not exceed the standard deduction amount, then the taxpayer will deduct the standard deduction and receive no benefit from the allowable expenses. Second, many of the deductions are subject to limitations based on the taxpayer’s adjusted gross income. For example, the deduction for medical expenses is reduced by 7 1/2% of the taxpayer’s adjusted gross income. Thus, many of the allowable deductions from adjusted gross income are not deductible in full. In addition, total itemized deductions are subject to a reduction rule when the taxpayer’s adjusted gross income exceeds a specified amount, further lowering the value of such deductions. Lastly, given the reductions based on adjusted gross income, any deductions for adjusted gross income have the effect of making...
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