Michael is self-employed and reports the income from his business on Schedule C of his Form 1040. This month, Michael incurred the following costs related to his business: $750 fine to the EPA for violation of environmental regulations $1,200 to a part-time employee who assists in the bookkeeping for Michael’s business $300 contribution to the Utah Republican Party (political contribution) $200 for dinner, during which Michael and an important client discussed business $150 for tickets to see the Utah Jazz after the client dinner $2,500 in rent and utilities How much of the above expenses can Michael deduct on his tax return? $5,100 $0 $3,800 $4,100
Michael is self-employed and reports the income from his business on Schedule C of his Form 1040. This month, Michael incurred the following costs related to his business: $750 fine to the EPA for violation of environmental regulations $1,200 to a part-time employee who assists in the bookkeeping for Michael’s business $300 contribution to the Utah Republican Party (political contribution) $200 for dinner, during which Michael and an important client discussed business $150 for tickets to see the Utah Jazz after the client dinner $2,500 in rent and utilities How much of the above expenses can Michael deduct on his tax return? $5,100 $0 $3,800 $4,100
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Michael is self-employed and reports the income from his business on Schedule C of his Form 1040. This month, Michael incurred the following costs related to his business: $750 fine to the EPA for violation of environmental regulations $1,200 to a part-time employee who assists in the bookkeeping for Michael’s business $300 contribution to the Utah Republican Party (political contribution) $200 for dinner, during which Michael and an important client discussed business $150 for tickets to see the Utah Jazz after the client dinner $2,500 in rent and utilities How much of the above expenses can Michael deduct on his tax return?
$5,100
$0
$3,800
$4,100
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