The WorkingPoint Schedule C report displays your account activity according to the IRS Schedule C tax categories you have selected for each account in an applicable account type.
We have designed our report to mimic the Schedule C report categories and line items so you can see the parts of the report clearly defined, as well as the line item details, including calculations. Please be sure to review your account activity and tax line assignments with your tax advisor and make any necessary adjustments to line amounts before you file your final tax form.
There are 5 parts to the Schedule C Report:
Part I - Income
Part II - Expenses (excluding expenses for business use of your home)
Part III - Cost of Goods Sold
Part IV - Information on Your Vehicle
Part V - Other Expenses
In each section, WorkingPoint summarizes your account totals for the current tax year according to Schedule C reporting categories. For example, the entries for the current year for all Revenue accounts assigned to the Schedule C Reporting Category: "Gross receipts or sales" are added up and the total is displayed on Part I, line 1.
For more information or special instructions per section, please review the following notes:
Lines A through H
The numbers on this report are calculated using the accrual accounting method and may include revenue and expenses not yet collected or paid. When filling out your tax form, select Option 2 (Accrual) on line F.
Part I - Income
Line 2 - Returns and allowances
WorkingPoint doesn't set up a pre-defined account for returns but you
can set one up and select this category as the tax assignment. Just go
to your Accounts List, click New Account and select Revenue. Then name
the account and select "Returns and allowances" as the Schedule
C Reporting Category.
For the purposes of this report, we display the amount for your returns and allowance account(s) as a positive if the account is negative and vice versa, depending on the actual value of your account total. Typically, the returns account is a negative value or $0.00 (if no returns have been recorded). This is because the returns account is designed to record the sales that are returned, thereby reducing your total revenue.
Line 4 - Cost of Goods Sold
This value is calculated for you based on activity in Part IV.
Part II - Expenses
Line 24b -Travel, meals, and entertainment:
Deductible meals and entertainment
According to the IRS, generally, only 50% of your meals can be deducted.
Because of this, WorkingPoint displays only 50%
of the amount in accounts assigned to this category. If you have expenses
that qualify for more than a 50% deduction, you’ll need to adjust this
amount on your final tax form.
Part III - Cost of Goods Sold
WorkingPoint uses the Cost method to value inventory. When filing out your IRS Form Schedule C, select Option a (Cost) on line 33.
For Schedule C reporting purposes, WorkingPoint reports cost of goods sold for inventory items through reporting the change of inventory, therefore you do not assign a category to the Cost of Goods Sold protected account. Cost of Goods Sold (COGS) is traditionally calculated by using the following equation:
Beginning Inventory + (Purchases) - Ending Inventory = Cost of Goods Sold
The assumption is: if you have some inventory to start with plus you buy more over the year, when you take inventory at the end of the year, whatever is gone (the difference) must have been sold.
WorkingPoint automatically records your COGS for the inventory items you sell. You can see this on the Income Statement report or by viewing the account activity for the Cost of Goods Sold account. If you only use the COGS account for what WorkingPoint records for you, then the COGS account value for the year should equal the Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold on the Schedule C report. If they do not match, the difference could be the result of the following:
If you have additional costs for labor, materials and supplies and other stuff that contributes directly to the sale of an item, WorkingPoint lets you track those as separate tax categories but they contribute to the Cost of Goods Sold total.
If you have used the Cost of Goods Sold account outside of the normal inventory operations, like for purchasing stuff you sell but don't track as inventory, WorkingPoint cannot report the amount recorded in those transactions. To avoid this, choose a Cost of Sales account other than Cost of Goods Sold to track purchases for things you sell but don't track as inventory.
Learn more about Cost of Goods Sold
Part IV - Information on Your Vehicle
At this time, we do not track vehicle usage or mileage.
Part V - Other Expenses
If you have business expenses that fall outside of the categories listed in Part II - Expenses, you can use Part V - Other Expenses to itemize and claim additional qualifying expenses. When assigning a Schedule C Reporting Category to an expense account, if you do not see an account that best matches your account, choose Other expenses from the list. WorkingPoint will display the name of the account and the amount of activity for accounts assigned to Other expenses in Part V, so you can check to see if these expenses qualify for deduction at tax time.
For specific information on completing the Schedule C form, visit the IRS website.
|
|
Important Note: The WorkingPoint Schedule C reports only the activity you have entered into your WorkingPoint account based on tax line assignments you have selected. It is highly recommended that you review your tax line assignments and current tax rules with your tax advisor and make adjustments to line amounts before you file your final tax form. |
About Schedule C Reporting Categories
