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Returning Member
posted Mar 14, 2022 5:45:04 PM

Can I refund TurboTax's Self Employment upgrade if I don't have enough deductions to cover the $99 cost?

I have a small amount of self employment income, and am not sure I'll be able to deduct over $630 in qualified expenses / mileage. I would however like to enter them to find out, but do not want to pay $99 if i'm only able to save $50

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1 Replies
Expert Alumni
Mar 14, 2022 6:04:17 PM

Technically, if you have any business expense, the IRS requires you report them. 

 

Not reporting business expenses COULD result in higher than deserved "Qualified Business Income Deduction" and/or "Earned Income Credit".

 

 

According to the IRS:

"A self-employed individual is required to report all income and deduct all expenses. Revenue Ruling 56-407, 1956-2 C.B. 564, deals with the issue of taxpayers not taking all allowable deductions in computing net earnings from self-employment for self-employment tax purposes. Rev. Rul. 56-407 held that under §1402(a), every taxpayer (with the exception of certain farm operators) must claim all allowable deductions in computing net earnings from self-employment for self-employment tax purposes.

Net earnings from self-employment are included in earned income for EITC purposes. It is defined by cross-reference to the definition of net-earnings from self-employment under I.R.C. §1402(a). This ruling applies equally to the EITC. CCA 200022051 also provides insight regarding deduction of Schedule C expenses."

 

IRS LINK