Questions about the 1120-A
- From: "Karen Hill" <karen_hill22@xxxxxxxxx>
- Date: 13 Mar 2006 10:52:10 -0800
I formed a corp last year (2005). I got my EIN and opted for a C-
Corp instead of an S corp.
I bought a prepaid cell phone which was for 100% business use only (it
is my corporate phone number, with proof in state filings). I bought a
sales book. I use my personal computer for work, but I don't want to
be re-imbursed for that.
I then answered an advertisment in 2005 seeking help creating software.
I answered the ad, and am creating the software based on speculation.
I own the rights to the software but I agreed to not sell it in the
potential client's area IF he decides to buy it when it is done.
Now in visiting the site a few times (in 2005) I incurred travel
expenses since the site was quite a distance.
So, I have the following expenses:
* prepaid minutes for the cell phone
* auto travel to the potential client site
* CD-Rs to burn cds
I have the following assets:
* a cell phone
* a sales book
Now, I also have a bunch of fees that I paid in 2005.
* corporate filing fee
* annual report fee
* Master license fee
I looked at the 1120-A. There is no place to write down the expenses
in the 1120. I would have thought that I could expense the pre-paid
minutes, the travel, and the CD-Rs. I suspect that these items must
be in the Cost of Goods calculation. Am I right?
Now I read that cell phones are listed property, so how do I deal
with my phone? I have significant proof that it is for business use
only since it is the phone number to contact my corp on various public
documents filed with the state. I can't Section 179 it since I have no
income for 2005. I think I must depreciate the cell. Also how do I
depreciate the book?
There is a place to deduct License fees in the 1120-A. So does that
mean I can deduct the corporate filing fee, annual report fee and
Master License fee?
I would really appreciate if someone could help me out and point me in
the correct direction. Once my product is done and selling, I'll have
one of you CPAs do this, but until then I must do it myself.
Once again, thanks for the advice in advance, it is really appreciated