Tax ? attn. CPAsor ATTYs

[ronatchig]

Am I required to take expenses for doing business on Sc. C 1040? As in selfemployed.

To be specific, if I do not deduct booth rent that I pay at the shop I will have a higher EIC than if I do?

[The Velveteen Ocelot]

1. Don't get your legal or tax advice from an Internet message board.

You have no recourse if it turns out to be wrong, and you'll be left holding the bag if the IRS disagrees with that advice. Hire a tax attorney or accountant, give him/her your records so he/she understands your particular situation, and pay for the advice. That way you will get good, accurate advice as well as someone who has malpractice insurance if it's wrong.

[CountAllVotes]

2. good advice

I'd say call the IRS up and ask them. If they cannot help you, then finda CPA.

[Gormy Cuss]

3. Either hire an accountant or ask the IRS.

If you have run the numbers both ways and your question is only whether it's legal to not claim all of your business expenses you should be able to get that answer pretty cheaply.

[papau]

4. I don't see the advantage of claiming more net income - more income cuts the EIC - So deducting rent

gives you less income - and therefore more EIC. Deducting less rent increases net (taxable) income tax and payroll taxes and decreases EIC.


It is illegal to under report income income and there are both cash punishments via fines/penalties/interest, there are also criminal sanctions. Over reporting income is also a prohibited action - but since the only penalty is a percentage of the under paid tax - and there is no under paid tax - there is in effect no penalty.

But again, I am curious as to how over reporting your income by deducting less rent paid to operate your business provides any advantage to you - in either the regular tax calculation, the payroll tax situation, or the EIC credit calculation. I am part of the IRS volunteer effort to get more folks filing for the EIC (In Boston that effort is run by the Democratic Mayor that we have, and is set up and run out of - via volunteers like myself - the community centers that the city has built in the poorer areas - I suggest you check on your city's efforts in this area)

Your total earned income and modified adjusted gross income (AGI) must be at least $1 but less than:

$12,210 ($14,420 if married filing jointly) if you do not have a qualifying child,

$32,001 ($34,000 if married filing jointly) if you have one qualifying child, or

$36,348 ($38,348 if married filing jointly) if you have more than one qualifying child.

Those numbers act as "cliffs".

If you are over the "cliff" there is no EIC.

Use EIC Worksheet B. You must use EIC Worksheet B if you are self-employed, a member of the
clergy or a church employee who files Schedule SE, or a statutory employee filing
Schedule C or C-EZ.