Expenses and EITC

[Patrick Michael]

Schedule C house painter.  He has estimated his business mileage, but does not keep a log, would take him too long to reconstruct, and said to just forget it.  But wait, there's more...by forgoing the mileage expense, it increases his EITC.  So do I include the mileage, because it was an expense, even though he does not written evidence as required? Or leave it off and increase his EITC.  Not talking big money, less than $500. 

[BulldogTom]

Ask your congressman to ask IRS?   They made this mess when they wrote the law and the regs.  /s/ (I think "/s/" is how you say "sarcasm")

Tom
Longview, TX

[Lee B]

Since he could reconstruct if he wanted to unless he keeps no records of jobs and where they were located . . . . 

[Pacun]

Transportation is ordinary and necessary for that job. So, I would ask him how many miles he ran his car last year and then ask him to calculate what percentage was business vs personal and enter that information against schedule C.  Most of the time, I prepare returns, I don't audit my clients.

Since he is under EIC, he didn't make a lot of money. He might know how many houses he painted and how many days he works on each house (on average), he might know the distance to the house and then you can help him to recreate. Again, ordinary and necessary is key.