Sole proprietorship with 2 sets of books

[TheGoodnShawn]

I am working on a case study in which I am attempting to prepare a mock tax return. At this point I am stumped.

The area where I am finding difficulty is as follows,

There's a married couple, but the wife operates her own flower shop. She keeps two separate bank accounts ( The General Account & The Payroll Account)

I am not sure if this means anything or not. If I am to treat each account seperately, where would I show figures for the payroll account?

Also, In listing the wages paid...I have amounts for FICA, MEDICARE, and Fed Unemployment Tax....where on the Schedule C should I show these amounts paid?

Any help will be helpful, I am getting mentally frustrated over this, but I'm glad that Im learning

Thanks

Shawn Miller

[Eli]

Taxes paid go line 23...

of the Sch C

Eli

[Armando Beaujolais]

I am working on a case study in which I am attempting to prepare a mock tax return. At this point I am stumped.

The area where I am finding difficulty is as follows,

There's a married couple, but the wife operates her own flower shop. She keeps two separate bank accounts ( The General Account & The Payroll Account)

I am not sure if this means anything or not. If I am to treat each account seperately, where would I show figures for the payroll account?

Also, In listing the wages paid...I have amounts for FICA, MEDICARE, and Fed Unemployment Tax....where on the Schedule C should I show these amounts paid?

Any help will be helpful, I am getting mentally frustrated over this, but I'm glad that Im learning

Thanks

Shawn Miller

The Payroll Account is probably a subsidiary of the General Account.

[Joe Btfsplk]

Two bank accounts

On your books each bank account should be shown separately and you should reconcile each of them each month to make sure all debit memos etc have been deducted, etc.

You would deduct the FICA and other payroll taxes on the line for taxes on Schedule C, but be sure you only deduct the employer's share, not the amount withheld from the employees.

On the line for salaries, deduct the GROSS salary without reducing it for taxes withheld.

[TheGoodnShawn]

Thanks

I wanted to thank everyone for their input.

I appreciate the assistance


Shawn