Understanding Taxes - Simulation: Simulation: Using Form 1099-INT to Complete Schedule C, Schedule SE, and Form 1040

Module 14: Self-Employment Income and the Self-Employment Tax

Page 11 of 38

Sim 14A: Using Form 1099-INT to Complete Schedule C, Schedule SE, and Form 1040

How does the self-employment profit affect your total income?

	A. It increases total income.
	B. It decreases total income.
	C. It doesn't affect total income.

Hint: See Lines 10 through 23, Form 1040.

Using Form 1099-INT to Complete Schedule C, Schedule SE, and Form 1040
Name: Rita A. Bentley
Employment: Full-time high school student and part-time self-employed pet caretaker
Marital Status: Single
Spouse's name (if any): N/A
Children: None
U.S. citizen: Yes
Other: You are 17 years old and live with your mother, who pays for all of the costs of maintaining your home. Your parents are eligible to claim you as a dependent. You are not an employee. You are correctly classified as an independent contractor. Your parents can claim you as a dependent. Your business income and expenses include:

Payments received for walking dogs and feeding dogs, cats, and birds: $1,700.00
Supplies, including dog treats, plastic bags, collars and leashes: $40.00
Notebook to track business income and expenses: $5.00

You are a full-time high school student. After school and on weekends, you take care of pets while their owners are traveling. You are not an employee. You are correctly classified as an independent contractor.

It's the last day of the year. You earned $1,700.00 by walking dogs as well as by feeding various pets, including dogs, cats, and birds.

You have receipts for all of the business expenses.

Supplies, including dog treats, plastic bags, collars, and leashes: $40.00

Notebook to track income and expenses: $5.00

You deposit your earnings in a savings account. You will use the money to pay for your college education. During the year you earned $54.00 of interest income on your savings. Your mother provided all of your support.

To review your personal information, click My Profile.

"Review the Scenario
Information using
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~Tina the Tax Tutor