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Arthur Rubin
Arthur Rubin, Tax Preparer
Category: Tax
Satisfied Customers: 1561
Experience:  22 years of tax preparation experience, including individual, trust, and estate returns.
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I run a paper route as an independent contractor; I exclusively

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I run a paper route as an independent contractor; I exclusively deliver to stores, and collect based on their sales. My route is long...140 miles..and after filling out all the information on schedule C as well as my collections and cost of goods sold, I showed a net loss on paper of over $11,000. As a side note, I also have income from an additional job of $30,000 and I file jointly with my wife, who also has an income of $30,000, so I have a significant amount of taxes already paid into the system. My question is as follows; one of the boxes in schedule C asks if my business was "at risk". Checking the box reduces my refund by almost half. My question is...Does this paper route qualify to be considered "at risk"
Submitted: 7 years ago.
Category: Tax
Expert:  Arthur Rubin replied 7 years ago.
The definition of "at risk" is that you are personally liable to pay the expenses you have reported. The purpose of this is to avoid the possibility of your deducting (on an accrual basis) expenses which are never actually expected to be paid.
Customer: replied 7 years ago.
I appreciate the defination of "at risk" but I still need to know if it valid for me to claim I am at risk in the situation of this paper route Other than a minor figure for supplies, the major contribution to the business being a loss is the deduction allowed for the mileage...I realy have few expenses other than the cost of goods sold so again I will ask...Does the situation this paper route exists under allow for me to calim it is "at risk"
Expert:  Arthur Rubin replied 7 years ago.
As you actually drove the miles, and were personally liable for the expenses the standard mileage deduction replaces (registration, insurance, gas, tune-ups, etc.), you are considered personally liable for the mileage deduction. So you are "at risk".
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