He essentially was self employed, getting money from many different sources. Most people who have always lived on paychecks are clueless about quarterly tax filings and self-employment taxes.
Most likely, he spent everything that he received and the year after he started making a lot of money found out that he was supposed to send quarterly checks to the IRS for his estimated taxes. So he claimed everything he spent as a "business deduction" so he would not owe any taxes.
Personally, I think EVERYONE should have to pay quarterly taxes. When your taxes are deducted up front, you don't really understand how much taxes you are paying. Filing an income tax return is usually just an opportunity to get a refund. Nothing quite like having to send a check to the IRS every 3 months to make you understand how much of your money the government is taking from you.
I agree 100%.
I love how people getting a Tax Refund Check think somehow they are sticking it to the government.
The fact is, if you get a refund check, the government is sticking it to you, you gave them an interest-free loan.
That could be an interesting question in tax court.
Since a TV “Reality Star” is a person who makes TV money by doing personal stuff, perhaps everything is a “business deduction” to keep him as a “reality” star?
Essentially no difference between personal and business expenses.