ACC 335 - Tax Factors for Business Decisions Assignment-Southern New Hampshire University
Overview
For your midterm, you will complete a tax return for a sole proprietor based on the provided scenario. Further, you will prepare a memorandum for Larry the Landscaper providing professional recommendations in the informational areas indicated.
The complete return and your professional tax planning advice are due in Module Four. All necessary PDF fill-in forms are available from the Internal Revenue Service.
Main Elements
Information on Larry the Landscaper:
Larry the Landscaper
Larry's Luxury Landscaping Service
13579 Grassy Knoll
Return Items:
Larry earned $325,000 through his landscaping service.
Business Expenses on Larry's Return:
1. $48,000 in wages paid to others
2. $3,200 paid in employment taxes
3. $2,400 paid in advertising expenses
4. $12,000 paid in equipment repair and maintenance
5. $6,500 paid in fuel expenses
6. Larry's dedicated business line to home office costs $995 per year
a. 15% of Larry's home is dedicated office space
b. Larry paid $24,000 in home interest expense
c. Larry paid $4,800 in utilities for his home
d. Larry paid $3,600 in property taxes
e. Larry pays $1,950 for home insurance per year
Need to Know:
1. Larry's lawn care equipment is in great working condition, but depreciation is not an issue as all items have been fully depreciated at this point.
2. Larry pays $15,000 a year in health insurance premiums for full family coverage.
3. Larry currently has no retirement plan aside from Social Security.
4. Larry will be purchasing new office equipment this year as his old computer, printer, and fax are outdated. Larry does not know he can depreciate home office items.
5. Larry's wife and oldest son often work for the landscaping service, but do not take a wage; they are just "helping dad out."
6. Larry is considering disposing of his current equipment and upgrading with newer, more efficient equipment. Larry is unsure, however, of any tax-related consequences or benefits resulting from this decision.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.