Losses/expenses from previous years

[outwest]

Point by Point...

Im saying I did not make profit, but due to Jackson Hewitt not letting me write off some expenses, I ended up with a debt to the IRS.

Here are some examples. One of my billing proseccers owed me 16,000 dollars. They went out of business and disapeared. Jackson Hewitt said I cannot claim that as a loss. But I say it is because products were delivered and money was never remitted to me.

Also, I had a custom car shop build me a car to take to car shows and promote my business. They asked me if I ever used it for private use and I said yes. They said I cannot write off the money I spent on this car, which is over 15,000 dollars.

In 2003 not a single electric, phone, cable bill was deducted. Not even a portion of them.

Miles, I was told I can write of miles going back and forth to car shows. Jackson Hewitt said no.

1. JH doesn't make the law or decide what you can write off, congress and the IRS does that.

2. If you are a cash taxpayer (most likely), income is reported as received in cash. If the cash is not received, no income claimed, and in effect the loss deduction is already handled. If on the other hand, you are accrual basis, you may have a deduction, but you must demonstrate collection efforts, valid debt, and so on. Even then it's not automatic. Another note, the cost of the product under cash basis would be taken into account as you paid for it and has probably been deducted.

3. The tricked out car is problematic, the usual case I see is painting the business name on the side of the race car driven by the owner on Saturday evening. Under the code, there are hobby loss problems. The tricked out car may have some of the same issues. You didn't say what kind of business you are. If you are selling car accessories, and this a example of your work, maybe. Any other, non-auto business, this would really be a streatch. This is not a clear deduction, and be likely be disallowed on audit. IRS standards require that a professional not use deductions unless the possibility of being substained is more likely than not. This one is too far out there.

4. Mileage to auto shows. What's the business again? The business name on the car does not make it deductable. Usual case is sign on the personal vehicle which does not make it a advertising deduction.

5. Janien can be gruff, but he's getting better now. Simple fact is that he is a very sophisticated tax pro. You would be well off to go to him or one like him. You'll end up with the lowest legitimate tax liability.

Doug

[Jiggers]

Comment to unregistered

I find rude of you to assume its a hobby. Not everyone is familiar with tax laws, there are many many poeple who miss out every year. I agree with him that Jackson Hewitt is a ripoff. I seriously dont think you know what youre talking about and that is not a good thing because youre replying to some serious questions. Not that I advise anyone to use this forum for advise, but you know people will. Please educate yourself before throwing worthless words around like that, just makes you look bad.

Well this is why I never register, sounds like people rather criticize ones lifestyle than help.

I don't think any of us mind helping someone with a tax question, either for their own return or their clients. However, I do mind helping someone do their return without receiving compensation for my time. The only product I sell if my time and experience.