topic TAX YEAR 2018 or earlier Reporting Freelance business expenses vs Employee business expenses in Deductions & credits

TAX YEAR 2018 or earlier Reporting Freelance business expenses vs Employee business expenses

Rob-50 — Thu, 13 Apr 2023 18:16:27 GMT

I'm facing an IRS audit over the fact that approximately $11,000 in itemized business expenses I thought I was entering as expenses associated with my (joint-filing) wife's 2017 FREELANCE WRITER/EDITOR business -- e.g., air travel and hotel costs associated with a European writer's conference she attended, computer equipment purchases and home office supplies -- appeared instead in a Form 2106 EZ (Unreimbursed Employee Business Expenses) and in our Schedule A as Employee Business Expenses. I was so trusting of TurboTax and confident from previous similar filings that I did not check the 1040 & associated forms before I filed them electronically. Now, a year later, the IRS has sent us a polite letter with a Form 886-I (EBE Explanation of Items) and wants to see company-letterhead authorizations for each of the expenses, which, of course, we can't provide, since they were expenses incurred by my wife in her home-based editing enterprise. I've retraced my entries in the 2017 TurboTax program and don't see where I might have erred, or where the TT-Home & Business program might have erred. Any suggestions, before I talk to the IRS? I've got two weeks to figure this out before their clerks "recalculate" our 2017 return. Thanks !

Re: Reporting Freelance business expenses vs Employee business expenses

VolvoGirl — Sat, 15 Jun 2019 19:53:08 GMT

Did you fill out a schedule C for her income? You probably need to amend and delete it from schedule A 2106 and enter them on schedule C as business expenses.

Should be easy in the Desktop Home & Business program.

Did you tell the IRS it should be on C not A?

Re: Reporting Freelance business expenses vs Employee business expenses

VolvoGirl — Sat, 15 Jun 2019 19:56:34 GMT

Here's where you should have entered it.

Go to Business tab- then Continue

Business Income and Expenses - Click the Start or Update button

Then click EDIT by the business name and the next screen should be a list of topics,

Business Profile, Income, Inventory/Cost of Goods Sold, Expenses, Assets, and Final Details last.

Under Business Expenses, Click Start or Update by Other common business expenses. You should see the list of expenses and amounts you entered.

Then click the start or update button by the expense you want to add or edit.

Re: Reporting Freelance business expenses vs Employee business expenses

VolvoGirl — Sat, 15 Jun 2019 19:57:38 GMT

How to Amend 2017

https://ttlc.intuit.com/community/amending/help/how-do-i-amend-a-return-in-turbotax/00/27372

Re: Reporting Freelance business expenses vs Employee business expenses

Hal_Al — Sun, 16 Jun 2019 10:54:21 GMT

I agree with VolvoGirl; you need to amend your return, deleting the form 2106 and adding the expenses to her Schedule C.

Send the amended return to the IRS address on the letter, along with a copy of the letter and your explanation.

But, be prepared for further IRS push-back. Writing off computers and European trips, for conferences, are subject to questioning

topic ** TAX YEAR 2018 or earlier** Reporting Freelance business expenses vs Employee business expenses in Deductions & credits

** TAX YEAR 2018 or earlier** Reporting Freelance business expenses vs Employee business expenses

Re: Reporting Freelance business expenses vs Employee business expenses

Re: Reporting Freelance business expenses vs Employee business expenses

Re: Reporting Freelance business expenses vs Employee business expenses

Re: Reporting Freelance business expenses vs Employee business expenses

topic TAX YEAR 2018 or earlier Reporting Freelance business expenses vs Employee business expenses in Deductions & credits

TAX YEAR 2018 or earlier Reporting Freelance business expenses vs Employee business expenses