Income and Loss

[Gary and Alla 3,694]

Help me to better understand your feeling that the business eowner is being penalised. Where is the business owner's dilemma (unfairness in the "income" requirement) any different from a hard-working food server that gets cash tips that far exceed her income that is paid direct from the employer? She can report her tips and show a healthier income for USCIS purposes, and pay more tax as a consequence, or she can not declare a sizeable amount of her earnings, and reap the tax rewards, and fail to meet the USCIS income requirement. How does that differ from what you are claiming?

Big difference. You are completely welcome to CLAIM and pay tax on your tips, just as I claim ALL my income. You are cheating on your income tax, NOT claiming money you earn and EVADING income tax. You SHOULD be penalized, not only by the immigration system but by the criminal legal system. Does that help you understand?

I, on the other hand, claim ALL income I make and am allowed to make legitimate and legal deductions from that income which are used to support my family and then get penalized for claiming it. My car is paid for by my business, which car can also be used by the family or to pick up groceries. The car is OWNED by the business, paid for by the business (along with all gas, insurance, repairs, etc.) and the use of the car is given to me as an untaxed benefit. My wife gets the use of a FREE car! Legally, legitimately...but it counts against my income, it is deducted NOT from my under the table cash tips which are never reported, but from my claimed earnings! You, on the other hand, have unclaimed cash income, the same as a prostitute or drug dealer which you conceal in order to evade tax. So imigine that from what little portion of your income you actually claim, the USCIS would also deduct the cost of owning your car.

As far as Jim's prediciment, I was not aware in a free country that you could be told who to meet in your home, I guess, you live in a different part of Texas than I did. Such Bolshevism woul dhave been met at the point of a gun and answered with "Say what!????" in Runnels County. The local Soviet of Harris County works differently I see. If Vermont tried to tell me who I can meet and talk to in my home, I would walk over the border into Quebec and start over.

Also I do not see how a local ordinance can prevent you from claiming legitimate deductions from Federal income tax. You do use your home in your business and the Fed's couldn't care less about what your local Proletariat is telling you what you can do in your own home

[Gary and Alla 3,694]

I wasn't comparing legal and illegal. I was trying to understand why the OP is focused on the fact that the figure he transfers from his Schedule C to line 7 is a penalising him. Frankly, I think and I am not a tax person, that he's confusing business deductions from personal deductions.

But why should there be a difference in how they are treated? A deduction is a deduction is a deduction. And honestly, in the long run, from a standpoint of who ends up with the most money, I win.

For instance, I am allowed to deduct what amount to four times what I actually pay for gas for my commute to/from jobs, not to mention whatever I pay in tolls and parking. In essence, I am getting a very hefty tax credit, especially since I am driving an already-paid for car and very little monthly insurance.

I'm assuming you're a W2 sort- you're not allowed to deduct anything. You get your paycheck and out of pocket you have to pay gas, tolls, parking, insurance, etc.

So I get a tax deduction to the tune of about $.35-$.40 for every mile I drive, which lowers what I report as my gross income on my 1040 on line 22 but in reality puts more money in my pocket by lessening my tax hit significantly. (and yes, this is all 100% legal)

You? Not only do you have to pay higher taxes because you're not allowed to take these deductions, you also have the out-of-pocket cost of gas/parking/tolls on top of it.

Does this make it a little more clear?

Line 22 is the rule. It is "Total Income" by anyone's definition. Most importantly, by the IRS definition.

You are confusing "deductions" (which come from your personal total income and are NOT counted against you as they are "below" line 22, and business expenses and costs. There are no business "deductions", there are business "costs" and "expenses".

You COULD, for example, forego the vehicle "expense" on your business income and then claim it as an a business expense on your Schedule A and deduct it from your personal income "below" line 22 with no affect on your "total income". Why didn't you do this? Because then you have to pay 15%+ per cent self employment tax on the money. However thast vehicle benfits your family and you get no credit for it.

Sorry, I have to agree with Pushbrk. (not so sorry actually as he is correct) You can indiginantly declare that you cannot find any specific rule about this or that but if you think the USCIS or the Consulate is going to fabricate credits for you over and above the "total income" claimed on line 22 of your ITR, you are a dreamer. And you can protest all you want.

The good news is, that there is no particular rule that you meet the guidelines, only that you prove your fiancee/spouse will not become a public charge. Maybe USCIS will make an exception in your case. Good luck with that.

[Gary and Alla 3,694]

Actually, no I'm not a W-2 type If it makes a difference I am a CEO of a corporation.

By the way, the "benefit" to which you refer, for mileage is what IRS claims is the requisite value of operating a vehicle for business use. It goes beyond a consideration for fuel. Haven't you considered that your "employer" is having you use your vehicle for "his" business purposes, and is accelerating the date when you'll be facing disposal of that asset due to extra use and at a lower market value.

What pushbrk and I have been trying to state (he better than I, in this case) is that a "deduction" is not a "deduction" in the sense you are proposing. You are confounding the vernacular.

I wasn't comparing legal and illegal. I was trying to understand why the OP is focused on the fact that the figure he transfers from his Schedule C to line 7 is a penalising him. Frankly, I think and I am not a tax person, that he's confusing business deductions from personal deductions.

But why should there be a difference in how they are treated? A deduction is a deduction is a deduction. And honestly, in the long run, from a standpoint of who ends up with the most money, I win.

For instance, I am allowed to deduct what amount to four times what I actually pay for gas for my commute to/from jobs, not to mention whatever I pay in tolls and parking. In essence, I am getting a very hefty tax credit, especially since I am driving an already-paid for car and very little monthly insurance.

I'm assuming you're a W2 sort- you're not allowed to deduct anything. You get your paycheck and out of pocket you have to pay gas, tolls, parking, insurance, etc.

So I get a tax deduction to the tune of about $.35-$.40 for every mile I drive, which lowers what I report as my gross income on my 1040 on line 22 but in reality puts more money in my pocket by lessening my tax hit significantly. (and yes, this is all 100% legal)

You? Not only do you have to pay higher taxes because you're not allowed to take these deductions, you also have the out-of-pocket cost of gas/parking/tolls on top of it.

Does this make it a little more clear?

OK, so then my comparison is of a fictional "food server" not claiming cash income as being more comparable (exactly comparable actually) to a prostitute or drug dealer, not you personally. My mistake.

[Gary and Alla 3,694]

Pull out your 1040 form and find the line that shows "total income". See if it isn't line 22 like it is on mine and everybody elses. Words, phrases, clauses, sentences and paragraphs always have a context. The context here is the total income line on a US tax return. "Deductions" and "business expenses" are not the same thing. Business expenses reduce "income". "Deductions" reduce tax liability on income. Business "income" is considered, "revenue" minus "expenses" in the broadest sense and no added detail will support your argument. Allowable deductions for business related expenses are calculated BEFORE "total income" on any US tax return.

That's the context and the vast majority of business people either already understand that or have their accountants explain it to them. A tax benefit can bite you on an affidavit of support. That's the way it is.

First off, I really object to the insulting tone of your post. This might be an amusing little exercise to you, but this is my family and I am deadly serious about this.

Now that that is out of the way...

You're correct about line 22 saying "total income". However, on Schedule C line 7, it says "Gross income" as well.

I challenge your assertion about "deductions" and "business expenses" being different. You're correct in that "business expenses" ultimate reduces income. The same can be said for "deductions". Both result in a lower NET income.

But everything I read suggests the government is not concerned about net income, only gross income, and this is again why I am waiting on a ruling from the State Department on this. The regulation is not clear cut and this is why I am challenging their interpretation of it. It is a matter of semantics and the current interpretation runs contrary to the intended effect of the regulation- that those of us who wish to bring family here have the necessary income to support them.

It shouldn't cut both ways, that the government can tell a small independent contractor that they will take into account income minus legal tax write offs, but not demand an accounting of expenses from W2 employees. There's an innate failure of logic that is demonstrated in my previous post.

The government is concerned with groos PERSONAL INCOME, not business "revenue"

"Deductions", as pointed out above, are NOT the same as "costs and expenses" of a business and personal deductions do NOT count against you as they are taken below line 22 and they are intially claimed as income and sefl-employment tax is paid on them before they are deducted from income "taxable" (meaning "income tax") income.

There is MOST DEFINITELY a BIG difference between "costs and expenses" and "deductions" and you KNOW exactly what it is ....15.3% self employment tax!!!!!!!!!! You CHOSE to claim these expeditures as business expenses, rather than personal deductions, in order to SAVE your self having to pay the 15+% self employment tax. You know it and I know it and anyone that knows a thing about taxes (even the cash concealing waitress) knows it. The difference between you and I and the streetwalker and table server is that what WE do is legal, what THEY do is not.

Now, you want ONE branch of the government (USCIS) to give you "credit" for this "income" while desiring another branch of the government (IRS) to ignore it (or at least ignore the tax on it). Won't work that way. Would be nice if we could just get whichever branch of governemnt to consider anything the way WE want from whatever standpoint applies to our needs today (and why not throw in mortgage companies while we are at it?)

I guess my belief is that self employed people should be given credit for line 22 of the 1040 PLUS any expenses for depreciation or business use of a home which are expenses that are actually available to benefit the family. But what I believe has nothing to do with the reality that they DO NOT count and will not be considered your income.

[Gary and Alla 3,694]

Ok, let me get this straight.

The IRS allows you to tally your business expenses at a rate that is higher than what you actually spend on those expenses. The result is that you have more money left over for your personal income than your tax return would seem to indicate.

Now, the tax return's "Total Income" numbers on line 22 are fairly low because of these generous business expense deductions, which means you're getting a nice break on your taxes. But your REAL personal income is actually much higher. However, the "Total Income" numbers end up being SO low that you don't appear to qualify to sponsor an immigrant, according to your household size, even though your REAL income would be high enough.

So, what YOU want is for the IRS to continue to give you the generous deductions for your business expenses, but you want USCIS to take into account that that you're not REALLY spending that much on your business, and you ACTUALLY have more personal income than your tax return would appear to indicate. To be more specific, YOU want USCIS to pretend you didn't have ANY business expenses, and that your gross business income was entirely available to you as PERSONAL income.

To be precise, you want USCIS to treat your business expense deductions the same as they treat your personal deductions. Am I correct?

Ok, let me know if you are win because you will have successfully forced USCIS to move the line they draw between your business and personal finances, effectively making your business revenues the same as your personal income. If that works then I'm going to talk to my employer, because they spend a boatload of money on me, and I'd like it considered on my affidavit of support.

What's good for the goose...

Good pointa nad perhaps more succinct than my above post.

[JimVaPhuong 4,863]

As far as Jim's prediciment, I was not aware in a free country that you could be told who to meet in your home, I guess, you live in a different part of Texas than I did. Such Bolshevism woul dhave been met at the point of a gun and answered with "Say what!????" in Runnels County. The local Soviet of Harris County works differently I see. If Vermont tried to tell me who I can meet and talk to in my home, I would walk over the border into Quebec and start over.

Also I do not see how a local ordinance can prevent you from claiming legitimate deductions from Federal income tax. You do use your home in your business and the Fed's couldn't care less about what your local Proletariat is telling you what you can do in your own home

Actually, I live in California, Gary. That should explain the "Bolshevism".

The 'official' explanation from the city is that they don't want the traffic and parking problems in a residential neighborhood. If you're going to be meeting with vendors and clients then they prefer you do business in an area zoned for business. The reality is that they can't possibly know if you're actually meeting vendors or clients at your home.

The other limitations, like what percentage of the home can be used for the business, and not being able to use other structures or the garage, seem intended to limit the amount of tax deductions you can get for the business. The city has a very large industrial area, and I think they're trying to encourage people to lease office and industrial space for anything more than a home office. Again, they don't come and inspect your home (though technically they could), so they don't know how much space you're dedicating to the business. But, these are the terms you have to accept when you get your business license here. The alternative is to lease space in the industrial district, which is what I plan to do eventually anyway.

[dancehallquana 5]

i would like to ask if anyone knows.. if ur business loss made u under the limit for 2008 BUT u are no longer in operation then can u continue without a cosponsor..

2006,2007 - above limits

2008 - below w/ business

2009 - no business, well above limits..

i do not want to use a cosponsor if anyway possible..

[JimVaPhuong 4,863]

i would like to ask if anyone knows.. if ur business loss made u under the limit for 2008 BUT u are no longer in operation then can u continue without a cosponsor..

2006,2007 - above limits

2008 - below w/ business

2009 - no business, well above limits..

i do not want to use a cosponsor if anyway possible..

As long as you can provide the necessary evidence that your current income is above the limits, I think you'll be fine. They're more interested in current income, anyway.

[dancehallquana 5]

i would like to ask if anyone knows.. if ur business loss made u under the limit for 2008 BUT u are no longer in operation then can u continue without a cosponsor..

2006,2007 - above limits

2008 - below w/ business

2009 - no business, well above limits..

i do not want to use a cosponsor if anyway possible..

As long as you can provide the necessary evidence that your current income is above the limits, I think you'll be fine. They're more interested in current income, anyway.

thanks for answering.. i really don't have any family that could help, and would hate to ask friends to do something like this.. i think i will risk it and see..

[Gary and Alla 3,694]

As far as Jim's prediciment, I was not aware in a free country that you could be told who to meet in your home, I guess, you live in a different part of Texas than I did. Such Bolshevism woul dhave been met at the point of a gun and answered with "Say what!????" in Runnels County. The local Soviet of Harris County works differently I see. If Vermont tried to tell me who I can meet and talk to in my home, I would walk over the border into Quebec and start over.

Also I do not see how a local ordinance can prevent you from claiming legitimate deductions from Federal income tax. You do use your home in your business and the Fed's couldn't care less about what your local Proletariat is telling you what you can do in your own home

Actually, I live in California, Gary. That should explain the "Bolshevism".

The 'official' explanation from the city is that they don't want the traffic and parking problems in a residential neighborhood. If you're going to be meeting with vendors and clients then they prefer you do business in an area zoned for business. The reality is that they can't possibly know if you're actually meeting vendors or clients at your home.

The other limitations, like what percentage of the home can be used for the business, and not being able to use other structures or the garage, seem intended to limit the amount of tax deductions you can get for the business. The city has a very large industrial area, and I think they're trying to encourage people to lease office and industrial space for anything more than a home office. Again, they don't come and inspect your home (though technically they could), so they don't know how much space you're dedicating to the business. But, these are the terms you have to accept when you get your business license here. The alternative is to lease space in the industrial district, which is what I plan to do eventually anyway.

Pardon me Jim. For whatever reason I thought you were in Houston. Well, it is a relief. Houston WAS the largest city in the world with no zoning regulations, you had me scared. I really don't care what miseries California inflicts on itself. Though your explanation could explain the exodus occuring from California.

Anyway, it is always an intersting topic to banter about.

[diadromous mermaid 36]

For clarification purposes only, I compared the OP's predicament to that of a food server, not to insinuate that underreporting income in the case of a food server is legal, but to identify that the OP faces a very similar dilemma to the food server (but for purposes that are not in any way illegal). Many individuals in the food service industry underclaim their wages, because such wages are not reported on a w-2, but later find themslves in a situation that is much the same as the OP. They have a greater income than what is declared on their tax return, but can't meet the USCIS income requirement because of the choice to report a lower income figure. The OP, on the other hand, takes every opportunity to avail himself of the full range of business expenses that reduce the net profit of his entity (that flows to his 1040 as "personal income") only to find himself in much the same predicament.

Help me to better understand your feeling that the business eowner is being penalised. Where is the business owner's dilemma (unfairness in the "income" requirement) any different from a hard-working food server that gets cash tips that far exceed her income that is paid direct from the employer? She can report her tips and show a healthier income for USCIS purposes, and pay more tax as a consequence, or she can not declare a sizeable amount of her earnings, and reap the tax rewards, and fail to meet the USCIS income requirement. How does that differ from what you are claiming?

Big difference. You are completely welcome to CLAIM and pay tax on your tips, just as I claim ALL my income. You are cheating on your income tax, NOT claiming money you earn and EVADING income tax. You SHOULD be penalized, not only by the immigration system but by the criminal legal system. Does that help you understand?

I, on the other hand, claim ALL income I make and am allowed to make legitimate and legal deductions from that income which are used to support my family and then get penalized for claiming it. My car is paid for by my business, which car can also be used by the family or to pick up groceries. The car is OWNED by the business, paid for by the business (along with all gas, insurance, repairs, etc.) and the use of the car is given to me as an untaxed benefit. My wife gets the use of a FREE car! Legally, legitimately...but it counts against my income, it is deducted NOT from my under the table cash tips which are never reported, but from my claimed earnings! You, on the other hand, have unclaimed cash income, the same as a prostitute or drug dealer which you conceal in order to evade tax. So imigine that from what little portion of your income you actually claim, the USCIS would also deduct the cost of owning your car.

As far as Jim's prediciment, I was not aware in a free country that you could be told who to meet in your home, I guess, you live in a different part of Texas than I did. Such Bolshevism woul dhave been met at the point of a gun and answered with "Say what!????" in Runnels County. The local Soviet of Harris County works differently I see. If Vermont tried to tell me who I can meet and talk to in my home, I would walk over the border into Quebec and start over.

Also I do not see how a local ordinance can prevent you from claiming legitimate deductions from Federal income tax. You do use your home in your business and the Fed's couldn't care less about what your local Proletariat is telling you what you can do in your own home

[Steve_and_Lina 0]

Line 22 is the rule. It is "Total Income" by anyone's definition. Most importantly, by the IRS definition.

You are confusing "deductions" (which come from your personal total income and are NOT counted against you as they are "below" line 22, and business expenses and costs. There are no business "deductions", there are business "costs" and "expenses".

You COULD, for example, forego the vehicle "expense" on your business income and then claim it as an a business expense on your Schedule A and deduct it from your personal income "below" line 22 with no affect on your "total income". Why didn't you do this? Because then you have to pay 15%+ per cent self employment tax on the money. However thast vehicle benfits your family and you get no credit for it.

Sorry, I have to agree with Pushbrk. (not so sorry actually as he is correct) You can indiginantly declare that you cannot find any specific rule about this or that but if you think the USCIS or the Consulate is going to fabricate credits for you over and above the "total income" claimed on line 22 of your ITR, you are a dreamer. And you can protest all you want.

The good news is, that there is no particular rule that you meet the guidelines, only that you prove your fiancee/spouse will not become a public charge. Maybe USCIS will make an exception in your case. Good luck with that.

I am not asking anyone to fabricate any credits. What I claim is what is allowed to me under the law I'm not doing any sort of creative tax work or bending the rules.

The language of the regulation is quite clear- "before deductions".

What's the difference between a deduction and an expense? In both cases, it's a cost to you that the IRS allows you to offset on your taxes to reduce your overall tax burden, be it the self-employment tax or the general income tax. There is no difference- it's only semantics, and even then, these semantics do not appear in the code. "Total income before deductions."

And let's say I did what you suggest about switching vehicle expenses from Schedule C to Schedule A. Suddenly, this expense/deduction becomes okay to them why? Because I then have to pay more self-employment tax?

Excuse me, but isn't the whole purpose of this AOS is to show that you have enough money to support the intending immigrant? So how is telling someone no, you cannot write off this expense on this portion of your taxes,and instead must write it off on this other portion of your taxes, and then pay more in taxes, reducing the amount you have to then support your family, make any sort of sense whatsoever?

Maybe I'm too deeply invested to look at this dispassionately, but to me, that seems entirely counter-intuitive.

[Steve_and_Lina 0]

Ok, let me get this straight.

Jimmy, I am going to italicize your post and answer point-by-point.

The IRS allows you to tally your business expenses at a rate that is higher than what you actually spend on those expenses. The result is that you have more money left over for your personal income than your tax return would seem to indicate.

Yes.

Now, the tax return's "Total Income" numbers on line 22 are fairly low because of these generous business expense deductions, which means you're getting a nice break on your taxes. But your REAL personal income is actually much higher. However, the "Total Income" numbers end up being SO low that you don't appear to qualify to sponsor an immigrant, according to your household size, even though your REAL income would be high enough.

Partially true. The regulation says that the pre-deduction income figure is the one which is to be considered. As a 1099 employee, this income is reported by me on my Schedule C.

So, what YOU want is for the IRS to continue to give you the generous deductions for your business expenses,

I'm entitled to them under the US tax code, so yes.

but you want USCIS to take into account that that you're not REALLY spending that much on your business, and you ACTUALLY have more personal income than your tax return would appear to indicate.

This is the reality of the situation as I showed with the mileage deduction, so yes. And again, there is nothing illegal about this. It is all 100% above-board.

To be more specific, YOU want USCIS to pretend you didn't have ANY business expenses, and that your gross business income was entirely available to you as PERSONAL income.

No, I'm not asking USCIS to pretend I don't have expenses. I do. But we all have expenses. The difference is in how USCIS treats them.

If you're a W2 employee, USCIS isn't asking you how much you are paying each day to commute to work or if you take a meal with your boss how much you paid for it and penalizing you for it. USCIS doesn't care what you spend your money on- their only concern is how much you bring in at the top, before taxes and expenses, your income before deductions or living expenses. You can go out and blow all your money at the casino or on drugs, for all they know or care. You could be $50,000 in debt and sinking deeper, but if you're making $25,000 a year for a family of 2, it's ok. They don't ask.

But heaven forbid you're a 1099 employee. Suddenly, all your work expenses are deemed to suck money out of your bottom line.

Let's look at this example and only at car stuff. A W2 and a 1099 both have cars that get 25mpg and gas is $2.50/gallon, both drive 100 miles to/from work, both pay $5 in tolls, and both pay $10 for parking.

For the W2, the commuting expense is $25/day, $125/week, $6,250 for a 50 week year to be paid out of pocket. That's less money for the family (I am generously giving 2 weeks vacation.)

For the 1099, the initial costs are the same. But..... they get to write off all the tolls and parking. That's $15/day, $75/week, $3,750. Now, the biggie- mileage. 500 miles/week, 25000 miles/year @ $.55/mile = $13,750 + $3,750 = $17,500, which they then are allowed to deduct from their income.

Let's say both the W2 and the 1099 both make $35,000 for the year before taxes. Here's the fun part. Buying the "line 22" argument, the 1099 person appears to only be making $17,500, even though as you can plainly see, they both have a post-driving expense income of $28,750.

Do you now see the utter insanity of the line 22 argument? It is utterly and completely devoid of logic.

To be precise, you want USCIS to treat your business expense deductions the same as they treat your personal deductions. Am I correct?

As long as the regulation reads "income before deductions", yes. See above.

Ok, let me know if you are win because you will have successfully forced USCIS to move the line they draw between your business and personal finances, effectively making your business revenues the same as your personal income. If that works then I'm going to talk to my employer, because they spend a boatload of money on me, and I'd like it considered on my affidavit of support.

What's good for the goose...

Read what I wrote above. And you're absolutely correct- what's good for the goose- in this instance, the government not considering a W2's expenses- should also be good for the 1099 gander. :: honk honk ::

[Steve_and_Lina 0]

Jim,

Sorry, can't edit my response so a new post is needed.

Now, the tax return's "Total Income" numbers on line 22 are fairly low because of these generous business expense deductions, which means you're getting a nice break on your taxes. But your REAL personal income is actually much higher. However, the "Total Income" numbers end up being SO low that you don't appear to qualify to sponsor an immigrant, according to your household size, even though your REAL income would be high enough.

Yes, that's precisely my point. You can see from the example about the mileage precisely how generous these expense write-offs are. Now, folks can argue about depreciation being factored into the mileage allowance etc etc etc, but still.... the W2 is putting the same wear and tear on their car and they're not allowed any sort of deduction.

There needs to be an equitable standard at work, and there isn't one. Quite the contrary.

[Gary and Alla 3,694]

Line 22 is the rule. It is "Total Income" by anyone's definition. Most importantly, by the IRS definition.

You are confusing "deductions" (which come from your personal total income and are NOT counted against you as they are "below" line 22, and business expenses and costs. There are no business "deductions", there are business "costs" and "expenses".

You COULD, for example, forego the vehicle "expense" on your business income and then claim it as an a business expense on your Schedule A and deduct it from your personal income "below" line 22 with no affect on your "total income". Why didn't you do this? Because then you have to pay 15%+ per cent self employment tax on the money. However thast vehicle benfits your family and you get no credit for it.

Sorry, I have to agree with Pushbrk. (not so sorry actually as he is correct) You can indiginantly declare that you cannot find any specific rule about this or that but if you think the USCIS or the Consulate is going to fabricate credits for you over and above the "total income" claimed on line 22 of your ITR, you are a dreamer. And you can protest all you want.

The good news is, that there is no particular rule that you meet the guidelines, only that you prove your fiancee/spouse will not become a public charge. Maybe USCIS will make an exception in your case. Good luck with that.

I am not asking anyone to fabricate any credits. What I claim is what is allowed to me under the law I'm not doing any sort of creative tax work or bending the rules.

The language of the regulation is quite clear- "before deductions".

What's the difference between a deduction and an expense? In both cases, it's a cost to you that the IRS allows you to offset on your taxes to reduce your overall tax burden, be it the self-employment tax or the general income tax. There is no difference- it's only semantics, and even then, these semantics do not appear in the code. "Total income before deductions."

And let's say I did what you suggest about switching vehicle expenses from Schedule C to Schedule A. Suddenly, this expense/deduction becomes okay to them why? Because I then have to pay more self-employment tax?

Excuse me, but isn't the whole purpose of this AOS is to show that you have enough money to support the intending immigrant? So how is telling someone no, you cannot write off this expense on this portion of your taxes,and instead must write it off on this other portion of your taxes, and then pay more in taxes, reducing the amount you have to then support your family, make any sort of sense whatsoever?

Maybe I'm too deeply invested to look at this dispassionately, but to me, that seems entirely counter-intuitive.

You are no more "invested" than any other self employed person. Please do not suggest you are somehow more invested than any of the others of us that have been engaged and subsequently married our fiancees and filed TWO (in my case SIX) affadivits of support (K-1 and two K-2s)

"Deductions" are from personal income, AFTER line 22 and have no effect on line 22. Businesses do not have "deductions" they have "expenses" and "costs". The business income is NOT persoanl income from which you can support someone (well, it is, but not on paper) and it is not considered by the consulates or the USCIS. Those are the facts, man. Like it, love it, hate it...or get over it, those are the facts.

I will not argue your interpretation of "deductions" ,even though the word is not mentioned on the schedule C, because it doesn't matter. Your income on line 22 will be considered. And as mentioned above and in my FIRST post on this subject...CURRENT income is more important. It is July, alomost August, you mean you cannot show CURRENT income is above the guidelines? I hae been hinting around aboit this and hopefully you will drop the semantics argument long enough to understand my meaning. Sheesh. LAST YEAR's income is virtually a non-issue at this point. Turn your efforts to something productive and get a P&L statement for THIS year (to date) prepared.