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Q: Tax question re combining multiple sched and ques re: 8829 ( Answered 5 out of 5 stars,   0 Comments )
Subject: Tax question re combining multiple sched and ques re: 8829
Category: Business and Money > Accounting
Asked by: margi-ga
List Price: $5.00
Posted: 14 Nov 2004 13:54 PST
Expires: 14 Dec 2004 13:54 PST
Question ID: 428881
PART 1: We file joint returns. I and my spouse were self employed.  One
has a corporation and 1099 income. One has W2 and 1099 income.  I
created 3 separate schedule Cs and 2 schedule SEs:

1 C for Sub S chapter corp for me (after IRS approval to combine with
personal return)
1 C for my 1099 income as a sole proprieter
1 C for spouse's 1099 income as a sole proprieter
1 schedule SE for my income including both corporate profits and 1099 profits
1 schedule SE for my spouse for 1099 profits

The 1040 form assumes one entry for each line item that crosses over
to those schedules.

The question is: Do I simply add them up with a calculator for the
line in the 1040 form, and then supply the individual documents with
the return - OR -
Do I create a summary document (the problem is there's room for only
one SSN or EIN)
...Or do I do something else entirely???

We used form 8829 for business use of home. We lease. The beginning of
the form has us apply a percentage of space for the business use
I used line 20 for "other expenses" (being our lease payment)
Line 22 has me apply the percentage to the total.  Let's say the
resulting number is $1K for ease of math.  So, I'm thinking that the
allowable expenses for business use of my home would be $1K... but as
I fill out the rest of the lines, it has me add the $1K to my total
annual expense (let's pretend that's $10K + $1K, or $11K), then pick
the lesser of that or my line 29 from schedule c, which (let's pretend
$15K). So I'm finding that the maximum allowable expense is $11K (or
more than I pay in rent for the year versus the percentage).  That
seems wrong. I'm freaked out enough, I'm thinking about not claiming
it at all. What did I do wrong?

An answer from TaxMamma or someone similar in caliber would be appreciated.


Clarification of Question by margi-ga on 14 Nov 2004 16:00 PST
OK. You guys are off the hook for the 8829 question. I figured out
what I did wrong. I used column a when I should've used b.

My Part 1 question still stands...

Subject: Re: Tax question re combining multiple sched and ques re: 8829
Answered By: taxmama-ga on 14 Nov 2004 21:09 PST
Rated:5 out of 5 stars
Dear Marg

How interesting. 

You're filling out the forms manually.

I can see why that might be confusing. 

OK, let me clear something up for you. 

When you have income from an S-Corporation, you don't need to 
pay self-employment tax on it. So, only report the S-corporation
profits on your Schedule E, page 2. Forget the Schedule SE 

Let's go back to the Schedule SE, though. If you each have
more than one business that qualifies for self-employment
tax, you could just attach a summary list of the businesses
and profits from each. Then just enter the total on each of 
your respective Schedule SE's.

I am really proud of you for tackling it manually. 

Most people don't. It's kind of fun, isn't it?

I try to do one or two returns that way each year
just to make sure that the tax software is getting it
right - AND that _I_ understand the flow of the numbers. 

Good for you.

Best wishes,

Your TaxMama-ga

P.S. On the Form 8829, I'm glad you figured it out. 
Basically, you may deduct your home office expenses 
up to the amount of your business profit. If your
business(es) have a loss, you'll need to carry the
expenses to the next year, when you might have a profit.
margi-ga rated this answer:5 out of 5 stars and gave an additional tip of: $3.00
Of course, 5 stars for my taxmamma :-)  As you can see from prior
posts, she has helped me tremendously in the past. Tonight's no

We shouldn't get kudos for doing it manually. Sounds like we should've
used software.  But, I do like to understand where everything is going
and how much we should pay and why.  Must be the analyst in me...

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