The IRS requires you to include all your expenses. While the following applies to Paid Preparers and the EIC, it is nevertheless, the law. You can't manipulate Schedule C to your advantage by omitting expenses.
Paid preparers should ensure that the amount of net self-employment income reported is correct.
- Taxpayers sometimes want to over-report or under-report their income to qualify for or maximize the amount of EITC.
- The paid preparer should ask enough questions of clients claiming self-employment income to be satisfied that:
- the client is actually conducting a business,
- the client has records to support income and expenses, or can reasonably reconstruct income and expenses records, and
- the client has included all income and related expenses on Schedule C, Profit or Loss from Business (Sole Proprietorship).
Schedule C Expenses
