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Richard, Tax Attorney
Category: Tax
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Experience:  29 years of experience as a tax, real estate, and business attorney.
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i have a client who receives w2 income from state of california

Customer Question

i have a client who receives w2 income from state of california to be a caretaker to an individual. with this income, the caretaker pays for drugs, food, utilities and partial rent. i have counted these expenses on sched c, but since employee is not a statutory employee, the feds denied the sched c deductions. Can I still prove that these are legit sched c expenses??
Submitted: 3 years ago.
Category: Tax
Expert:  Richard replied 3 years ago.

Good morning. They are legitimate deductions...if they are not acceptable to the IRS on Schedule C, you should put them on Form 2106...which is for business expenses for W-2 employees.

 

 

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The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

 

Customer: replied 3 years ago.
For this particular industry, the home health care, caretaker, type where the state issues the payment to the caregiver for the benefit of the recipient, can I force the schedule c?? It is a more favorable position to my client. 2106 may or may not allow for the payment of food and drugs and rent for the patient, yes, no???
Expert:  Richard replied 3 years ago.
You can try to force it....what you need to make the IRS agent on audit understand is that these were ordinary and necessary expenses incurred by your client and only the net should be taxable to him. Try for Schedule C, but if not, insist on the full allowance on Form 2106.
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 45963
Experience: 29 years of experience as a tax, real estate, and business attorney.
Richard and 6 other Tax Specialists are ready to help you
Customer: replied 3 years ago.
Thank you. This is the course of action I was considering and will speak to the tax law dept of the IRS in this regard.

Because of your professionalism and expertise, I intend to continue to use the valuable service.

Blessings!!

My name is XXXXX XXXXX the way.
Expert:  Richard replied 3 years ago.
Thank you so much for the kind words! I appreciate that! Always glad to help!

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