EITC Tax Preparer Toolkit Example 4 A client tells you: She is head of household and has 2 children ages 13 and 14 She was self-employed cleaning houses, earned $12,000, and had no expenses Example 4 What Comes To Mind? Filing Status
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She is head of household and has 2 children ages 13 and 14
She was self-employed cleaning houses, earned $12,000, and had no expenses
Do you have records of the amount of money you received from house cleaning?
No, but I know what I earned
How much did you charge to clean a house?
$60 per house
So, how did she come up with the $12,000 income?
How many houses did you clean?
I don’t know, it wasn’t always the same houses
Who provided the cleaning supplies?
The homeowner provided everything
This is possible
You need to tell her that IRS requires a written record of amounts earnings and expenses—copies of receipts, invoices, etc.
She is able to reasonably reconstruct her income and expenses
Would You Prepare Her Tax Return?