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  #1 (permalink)  
Old 02-07-2008, 02:45 AM
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Default H1B taxes - IRS Audit

Hi,

I got a mail (post-letter) from IRS department and IRS has asked for substantiating the information in (for 2006 tax returns).

"Schedule A: Line 26, Job Expenses and Certain Miscellaneus deductions"

I claimed for items like house rent, laundry, meals because I am a consultant at client location. Could you please guide me on what to do on such a case? Please help me, I will be very grateful to you.

Thanks,
CG
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  #2 (permalink)  
Old 02-07-2008, 03:05 AM
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Default Consult a CPA

I know that you are looking for input from others who have been in similar situations, but I highly recommend you to consult a CPA in this regard. I am not trying to scare you but IRS audit is a serious matter and you should consult a CPA for guidance rather than urging people to help you in an Immigration related forum.

Good Luck.
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  #3 (permalink)  
Old 02-07-2008, 03:32 AM
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Default True - Please consult CPA

Maybe you deducted too much, even if you should have ALL the receipts pertaining to those deductions.

If you are on H1B, the case maybe even more complicated based on your Labor certificate (since it is filed only on certain locations you should be working in). Please be *VERY* careful dealing with the IRS. That is for anybody.

Good Luck & please do update the community on the situation.
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  #4 (permalink)  
Old 02-07-2008, 08:49 AM
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johnmt100 is on a distinguished road
Default consult cpa

i am not sure how one can work as a 1099 contract employee,on h1b .My understanding is h1 means we need to work on w2 any comments
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  #5 (permalink)  
Old 02-07-2008, 09:48 AM
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Default

Just curious, how did you file your taxes i.e. self or through some firm? If it was a firm, can you give us the name.

Thanks,

Quote:
Originally Posted by coolguy12 View Post
Hi,

I got a mail (post-letter) from IRS department and IRS has asked for substantiating the information in (for 2006 tax returns).

"Schedule A: Line 26, Job Expenses and Certain Miscellaneus deductions"

I claimed for items like house rent, laundry, meals because I am a consultant at client location. Could you please guide me on what to do on such a case? Please help me, I will be very grateful to you.

Thanks,
CG
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  #6 (permalink)  
Old 02-07-2008, 10:07 AM
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Default tax deductible?

Just curious...If you are on a H1B and work at client location as a consultant, are your rent, laundry etc tax deductible?
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Last edited by Winner; 02-07-2008 at 10:31 AM.
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  #7 (permalink)  
Old 02-07-2008, 10:59 AM
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Default

If you declared some place as your home and then you visit different places for consulting, I am sure all those rentals/laundry at different places are job expenses. Meals is another issue. Only if it meant to entertain clients, you can deduct those expenses. Not otherwise. Better to consult a CPA.
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  #8 (permalink)  
Old 02-07-2008, 12:26 PM
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Default

Quote:
Originally Posted by coolguy12 View Post
Hi,

I got a mail (post-letter) from IRS department and IRS has asked for substantiating the information in (for 2006 tax returns).

"Schedule A: Line 26, Job Expenses and Certain Miscellaneus deductions"

I claimed for items like house rent, laundry, meals because I am a consultant at client location. Could you please guide me on what to do on such a case? Please help me, I will be very grateful to you.

Thanks,
CG

If you get a W2 from your employer, you should not have used any of those deductions in Schedule A.

Even if you are on 1099, the deductions that you have showed on Schedule A are too aggressive. Consult with a local CPA. You probably will have to settle with the IRS.
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  #9 (permalink)  
Old 02-07-2008, 12:32 PM
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mhtanim will become famous soon enough
Default

Quote:
Originally Posted by Winner View Post
Just curious...If you are on a H1B and work at client location as a consultant, are your rent, laundry etc tax deductible?
No! If you get a W2, you don't qualify to expense any of the mentioned items.

If you get 1099, you may deduct certain items such as meal, car gasoline, supplies etc . But you can only deduct the things that are related to the business/your professional services. Laundry expenses are not relevant to your job and you should not try to expense them. You can expense few lunch meals saying it was necessary to meet and entertain your clients therefore they qualify as your business expenses. But you certainly cannot expense all your meals/groceries as you would have to purchase them anyway to survive.

Before you decide to take certain deductions, please follow the IRS instructions or consult with a CPA.

Last edited by mhtanim; 02-07-2008 at 12:35 PM.
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  #10 (permalink)  
Old 02-07-2008, 01:28 PM
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Default No

Quote:
Originally Posted by Winner View Post
Just curious...If you are on a H1B and work at client location as a consultant, are your rent, laundry etc tax deductible?
No they are not, firms like IBSN misguide people to make money. Don't fall for their false advise, they have no liability if you get audited.
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  #11 (permalink)  
Old 02-07-2008, 01:32 PM
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Default Immigration and IRS disconnected?

Quote:
Originally Posted by coolguy12 View Post
Hi,

I got a mail (post-letter) from IRS department and IRS has asked for substantiating the information in (for 2006 tax returns).

"Schedule A: Line 26, Job Expenses and Certain Miscellaneus deductions"

I claimed for items like house rent, laundry, meals because I am a consultant at client location. Could you please guide me on what to do on such a case? Please help me, I will be very grateful to you.

Thanks,
CG
You might have been picked randomly, it has nothing to do with your H1B. I think immigration and IRS are two different things and don't care about your labour application/GC/Status etc...
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  #12 (permalink)  
Old 02-07-2008, 01:42 PM
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You can deduct those expenses on Schedule A as Job related expenses (Form 2106) as long as you did not get reimburse by your consulting firm. Meaning that Box-1 of your W-2 does not include any reimbursement for those expenses. As long as you have all the receipts for those expenses you are safe.
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  #13 (permalink)  
Old 02-07-2008, 01:45 PM
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With W-2 you can qualify for those expenses.
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  #14 (permalink)  
Old 02-07-2008, 01:47 PM
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Default Questions

A person lives with his/her family in State A where rent/mortgage is maintained, goes to State B for consulting, can expenses be itemized?

Travel air/train/bus, hotel/rent, meal etc.

Gurus please advice.
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  #15 (permalink)  
Old 02-07-2008, 01:54 PM
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yes you can deduct those expenses if you do not get reimburse by your consulting firm. All you need to do is keep all the receipts for three years. Coz tax return one files is open for three years. In those three years IRS can come to you any time for audit.
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