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1953-54 Theatre Catalog, 11th Edition, Page 353 (315)

1953-54 Theatre Catalog, 11th Edition
1953-54 Theatre Catalog
1953-54 Theatre Catalog, 11th Edition, Page 353
Page 353

1953-54 Theatre Catalog, 11th Edition, Page 353

PROPERTY INVESTMENTS such as remodeling should be related to the fheatremun's lax position.

Schedule C-a

On this schedule, which is the lower part of Schedule C, you show the computation of your self-employment tax. On lines 25 and 26 you enter your self-employment income, with the total on line 27. If you were employed during the year and your wages were subject to old-age and survivors insurance the wages should be entered on line 28. The total of lines 27 and 28 is then entered on line 29.

The tax is computed at 217.4% on total income of $3,600, or a maximum of $81. If your employer paid you $1,300 you show $2,300 on line 30, and the tax on $2,300 on line 31. If you have no employment income enter on line 30, $3,600 or less, if your self-employment income is less. If your self-employment income (line 27) is under $400 you need not complete the remainder of the schedule, and have no self-employment tax to pay.

The purpose of the self-employment tax is to provide old age and survivors insurance for proprietors who are not considered to be employees of their own firms and who heretofore were exempt. It does not apply to professional services, such as doctors, lawyers, dentists, funeral directors, engineers, fulltime practicing accountants, and others.

Form 1065

The first page of this form, which is used to report partnership income, is quite similar to the sole proprietor's


Schedule C. Income and expense items are listed and totaled, respectively, and the remainder, known as ordinary net income, entered on line 26. Capital gains and losses are shown on the next two lines.

The ordinary net income on the tax return will not be the same amount as the net profit reported on the partnerships Profit and Loss Statement, because the latter will include contributions and capital gains and losses. These items must be divided among the partners and each partneris share shown on his own Form 1040.

The second and third pages contain various schedules most of which have been discussed above under Form 1040, and several questions which are selfexplanatory.

Page four shows the partnership balance sheets at the beginning and at the end of the taxable year. Below the balance sheet in Schedule J the change in each partneris capital account during the year is accounted for, and in Schedule K each partneris share of income and credits is shown.

Form 1

This is the form required of all corporations. In addition, if the corporation is subject to excess profits tax a Separate schedule EP-1120 must be filed. Form 1120 must be filed even though there is no profit to report.

Most of the schedules on the form resemble those already discussed, and their preparation need not be repeated here. Additional schedules are included

which show offiCerSl compensation (Schedule E), determination of necessity for filing excess profits tax schedule (Schedule K), and reconciling earned surplus (Schedule M).

For corporations, contributions are limited to five per cent of net income. Dividends received are taxed on 15% of the amount received.

Preparation of Form 1120 will be facilitated by the use of separate worksheets to analyze the corporations income and expense. These worksheets are necessary because all of the corporations income may not be taxable, such as interest received on municipal bonds, and all corporate expenses may not be deductible, such as insurance premiums paid on the life of an officer in which the corporation is the beneficiary.

Corporations have the option of paying the tax on quarterly installments, but the payments are not in equal amounts. The first and second payments, due March 15, and June 15, are for 40% each of the total tax. The third and fourth payments, due September 15 and December 15, are for 10% each of the, total tax. The first two installments for 1953, payable in 1954, will be increased to 45% and the last two installments will be decreased to five per cent. In 1955 and subsequent years, the tax will be paid in two installments of 50% each on March 15 and June 15.


If you are smart, you will make four quarterly payments, estimated in advance, on March, June, and September 15, 1953
1953-54 Theatre Catalog, 11th Edition, Page 353