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Christmas Gift as tax deduction - WWYD?


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OK, Hive, solve THIS one:

 

My bil emailed us today to say he's sending a check to the kids for Christmas. And then he adds, "I wrote work in the check memo. In case you were wondering, I can add it to my tax deductions lol."

 

Great. You know, whatever, he can fudge on his taxes all he wants. I don't approve of it but - meh. Whatever.

 

The problem is that dh and I are self-employed. Is this going to mess us up, if we get audited and they see "work" in the check memo? I'm living in fear this year that we'll be audited; self-employed, our income is down, but we get lots of gift $$ support from my parents etc that might look strange if the IRS looked at our bank accounts.

 

What do you think?

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I don't understand why a gift to your kids has anything to do with your business income, or what advantage this is to you, so I have trouble understanding your brother-in-law's point.

 

I also don't think you're the first person to get assistance from family members during times of financial difficulties. Why would the IRS make a big deal about that? It's obvious your mom (or whoever) sending you money is not the same as a customer paying you for services.

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