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Review Quiz — Part I Income

Review Quiz — Part I Income

Review Quiz — Part I Income

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Question 1 of 5

1. Question

Becky Example

Schedule C Line 1a

Becky receives a Form 1099-K from Uber showing $18,400 in gross payments. Uber charged $3,200 in service fees and deposited $15,200 net to her account. What amount does she report on Schedule C Line 1a?

$15,200 — the net deposits she actually received
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$18,400 — the gross amount per the 1099-K
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$3,200 — only the Uber fees
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$0 — 1099-K amounts go directly on Form 1040
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Question 2 of 5

2. Question

Becky Example

Part III — Cost of Goods Sold

Becky’s telehealth business is a service business with no physical products. How should she handle Part III (Cost of Goods Sold)?

Complete Part III using her supply costs as cost of goods sold
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Leave Part III entirely blank — service businesses do not complete Part III
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Enter $0 on Line 42 and complete the supporting lines
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Attach a statement explaining why Part III was not completed
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Question 3 of 5

3. Question

A rideshare driver received $2,400 in Venmo tips from passengers — not included on her 1099-K. Must these be reported on Schedule C?

No — tips are not self-employment income
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No — amounts under $5,000 not on a 1099 do not need to be reported
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Yes — all business income including cash tips is reported on Schedule C regardless of 1099 issuance
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Yes — but only on Schedule 1, not Schedule C
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Question 4 of 5

4. Question

On Schedule C Line 2 (Returns and allowances), which of the following is correctly entered?

Platform commissions kept by Uber or other platforms
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Refunds paid by the business to clients for unsatisfactory services
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Business expenses that reduce gross profit
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Federal income tax payments made by the business owner
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Question 5 of 5

5. Question

Becky Example

Schedule C Line 7

Becky’s telehealth Schedule C shows: gross receipts of $38,000 on Line 1a, a $200 return on Line 2, and no cost of goods sold. What is Line 7 gross income?

$38,000
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$38,200
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$37,800
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$37,600
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