Tax Question?

Question

I am self employed and i do not think that i made enough to file a return. Will i get reimbursed for anything that i bought to help me work or not?

Answer 1

You still need to file a return.... if you don't file, the penalties will be a large percentage of what you owe ! You can deduct business expenses... vehicles... whatever you purchased for business is deductible... but the government will not reimburse you for these expenses, they will just allow you to deduct them from your tax liability! Being self employed, you really need to seek the help of a tax professional !

Answer 2

You don't get reimbursed for items you bought to help you work, although you might be able to deduct them and get a portion of the cost back that way.

If you are self-employed, you'd need to file a tax return if you made over $400. You'll file a 1040, a schedule c, and a schedule se to calculate your self-employment tax. You can deduct your business expenses on the schedule C, and your self-employment tax will be figured on your net income after those deductions.

Even though you might not owe income tax, you would still owe self-employment tax (15.3%) if your income is over $400.

Answer 3

If you're self-employed and earned over $400 in 2006, you MUST file a tax return. Social Security and Medicare taxes must be paid on all SE income that exceeds $400 in any tax year.

Whether or not you'll have an income tax liability will depend upon your filing status and the net self-employment income. If you are a single filer, the magic number there is $8,450 for 2006.

You can deduct the legitimate business expenses you incur in the course of your business. File Schedule C or C-EZ with your return to account for the income and business expenses. File Schedule SE to calculate the self-employment tax (15.3%) on the net profits from your business activity.

Answer 4

To further bostonian's response, the $400 is your net income from self-employment (your gross revenues less your business expenses). Items such as itemized or standard deduction, exemptions, credits like the earned income credit or child tax credit is not considered in calculating your self employment tax. So for example, if your net income from self employment was $500, you will owe self-employment tax because you earned more than $400 in self-employment income. However, if the $500 was the only income you had for the year, you would owe no income tax since the standard deduction is greater than your $500 of income, so your taxable income would be zero.

Answer 5

I didn't realize there is a minimum amount you must earn to file a return. I thought it was a minimum amount you earn to have a tax liability. But you still need to file the return to show you didn't earn enough to have to pay taxes.