I have been on Soc Security Disibility since 2001, I have MS. In 2006 my husband took a military bonus and that put us in a higher tax bracket, I received a letter from Soc Sec that my medicare premiums would be higher til they received this years tax forms, showing our true income. I also received a medical review update (this is about time and normal done it before) Question is In 2006 I started using a skincare product from my girlfriend. By becoming a consultant ($25 fee) I received my products cheaper. Well she kept on and on so late 2006 I hosted her a christmas party. I supplied the food/drinks/ everything. Her way of meeting people. In turn I bought gifts for friends/family etc. Well when we went to a CPA to do the taxes , she said lets write off as much as possible, your husband's bonus hurt you. so we added up our regular charities, then she said what about that party, she was there. She said we could write that off since techincally I was a consultant. Although I am not out there peddling the product. So she wrote off the food, drinks, invitaitons, & the stuff I bought as business expense $1000 at most. No income showed. This years taxes no business stuff like I said I do not sale it and I do not even use it anymore. Should I answer No when they asked are you self employed? They are asking since last update time frame so that would include 2006 year.
I say no, I just hosted that one party for my friend and the CPA tried to get all the deductions she could but that little amount not worth it if this is a problem Any Advice? Thank you ANN NC
when doing taxes, be honest and forthcoming -- do not cut corners. Throwing a party for business purposes ONCE does not make you self-employed! To include this in your taxes is wrong and fraudulent. Your friend should file her OWN taxes -- it looks like she's the one in the skin care business and her filings should reflect that.
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