Expense Summary

[gman]

Client dropped of schedule c information. Has one amount listed for income and
3 expense items. --Administrative, labor & materials. (small construction bus)
I am sure a lot of items are lumped into Admin. ---would you suggest a break out
into detailed expense --or just file all under office exp. I am sure client would not
like to dig out and seperater info. What are your suggestions?

[WhiteOleander]

I would definately ask for a breakdown. He may have things that should be depreciated lumped into both of those categories. Just because they don't want to do some sort of reasonable accounting doesn't mean we have to accept what they say.

[Bucky]

I would ask for breakdown of expenses. He may have equipment, tools, office furniture etc which should be treated differently even if you are going to expense them. Concerning the fact he would not like to go back and do the addition work to bad. If he ever got audited and owed money believe me it would be your fault. How about 1099 misc fro labor? Best to get him set up right to begin with.

[Uncle Sam]

Expense Summary

Would your client be willing to separate the stuff out for IRS when asked?

You know - the meals and entertainment expenses that are only 50% deductible, the car expenses that include personal use of business vehicles, or installment payments on notes that include principal. How about the construction materials that are on hand at end of year, or the insurance premiums that are not fully deductible or don't even pertain to the business, or the cash reimbursement expenses that don't have an accountable plan backup, or the sales taxes that are offsets against the liabilities, or the amounts expensed for payroll taxes that include employee withholdings?

[gman]

Thanks,

That is really what I expected. Client has closed his business and been ill, but I agree,
a few expenses lumped together will probably have a large variety of items.

[ED SMITH]

I don't think an experienced tax preparer would be asking this question. Why haven't you looked at his previous tax returns to see what was on Sch C? You should then give him a list of those categories that were used before and ask him to provide the numbers. (I give my clients a blank Sch C with the categories underlined.) Also add any "Other" items that might pertain to his business. If he does not want to do that, then offer to sort out his receipts and add them up for an additional fee. This usually gets results.

Is there a depreciation schedule and items to be depreciated. Contractors are always buying equipment and power tools. You will also need vehicle mileage info.

Sometimes getting all the information, is the hardest part of doing a return. Good luck!.