did not file a tax return lasy year.business went under.Made about 70K.After High cost of fuel and high cost of repairs.6,500 was all I had left over.Well now IRS has written to find out why I did not file.Need Tax advice.
2006-12-09 09:13:33 · 6 answers · asked by miraclehand2020 5 in Business & Finance ➔ Taxes ➔ United States
Sounds like you had a schedule C so you would be subject to self employment tax (15.3%) on your taxable net income. Now, it sounds like you had $6,500 of cash left. That does not necessarily mean you have $6,500 of net taxable income. It could be higher due to non-deductible expenses.
For argument, let's just say the $6,500 was Schedule C income. That would equate to exactly $918 of self employment tax ($6,500 * .9235 * .153). You wouldn't have any income tax though the standard deduction and personal exemption would zero out your income.
So, dump in penalties and interest and you're looking at roughly $1k in taxes you owe.
File.
2006-12-09 11:22:21 · answer #1 · answered by Anonymous · 1⤊ 0⤋
If your business actually 'went under' you did not MAKE 70K, you GROSSED 70K. If your net income was $6,500, the most you should owe is self-employment taxes and penalties and interest for late filing. The $5,000 standard deduction and $3,200 personal exemption would reduce your taxable income to zero. This assumes single with no dependents, any other status would have a larger standard deduction and/or more exemptions.
You should consult an accountant or tax attorney and file a return ASAP.
EDIT: As zudmelrose said, it may be possible to show a lose and claim a refund of previously paid taxes. Your accountant can figure out if that is true in your case.
2006-12-09 10:09:19 · answer #2 · answered by STEVEN F 7 · 1⤊ 0⤋
I would file. If you had a rotten year there is a chance you might end up with a loss when you factor in depreciation etc. If so you can carry the loss back and actually get a refund from prior years.
2006-12-09 09:33:09 · answer #3 · answered by zudmelrose 4 · 1⤊ 0⤋
You need to file sweety, its the law. Just get all your numbers in order and locate the Jackson Hewitt Tax Service office closest to you, we are experts in this sort of thing. In my experience when my clients friends get letters like yours from the IRS they come to me, we do the return for them and they get a refund when they thought they were going to owe money. Go to www.jacksonhewitt.com hit the office locator button, type in your zip code and you will directed to the office closest to you.
2006-12-09 09:23:24 · answer #4 · answered by WitchTwo 6 · 0⤊ 0⤋
File a tax return ASAP or you will be forced to - you may be fined or put in jail. Contact them as then get tax help if you do not know how to do it yourself. Do this especially fast if you owe them any money.
2006-12-09 09:22:08 · answer #5 · answered by themountainviewguy 4 · 1⤊ 0⤋
I would contact a Certified Accountant and go from there.
2006-12-09 09:20:54 · answer #6 · answered by Betty 1 · 1⤊ 0⤋