Earned Income Credit

[Red Tex]

I am trying to help a provider friend with one child get all she can on her taxes. She is purely a cash business person. So there are no banking records.

How does she declare some income in order to get the maxium EIC without losing it all in taxes?

[Grace Preston]

She could do what she should do and just pay her taxes. The IRS is not something to trifle with.

[UB9IB6]

Pay taxes. If I have to pay20k+ every year to the fed..... some poor cash based provider
Can pony up a few K.

What you are essentially asking is for help in defrauding the public.
Thats kind of disgusting.

It's like...... this hooker is getting paid and trying to skirt the bill....then trying to get a free desert paid for by you and I.....

Screw her and her baby. Turn yourselves in for tax fraud.

[Boltfan]

If she does her best guess of what she actually made she will keep herself on good terms with the IRS and not likely owe anything anyways.

You don't need banking records to declare income. Help her file legitimately.

[Pistol Man]

Red Tex, as I tell all my clients, this tax thing is not something you should attempt all alone at home in the dark! I have been in the tax advice/counsel/preparation business for 30 years and one thing I can assure you is that a "simple" tax return - isn't! Your provider friend should seek competent tax counsel - someone who actually knows the tax code and how to apply it - and have a tax return prepared. She doesn't have to disclose the nature of her self employed business to the preparer - but she does need a "story". Why? An NAICS # has to be entered on the Schedule C for self employed folks divulging the general nature of the business. And she needs to remember that the IRS and the preparer know only what is disclosed to them. And she must also follow the old adage in tax consulting circles, "hogs get fed, pigs get slaughtered"!

[gulflover]

And social escort services have their own NAICS number, so there's really even no need to hide that. It's not like the IRS is going to suddenly tell the local po-po that so and so registers as an escort.

[Sugar_Daddy]

in simple answer to your question. she is self employed and should do the return accordingly. she is required to claim all her income and expenses not just those on bank records. should she owe tax, than she will be able to collect social security (Obama williing) in the future.