2007-03-12 14:15:50 · 4 answers · asked by Victorious 1 in Business & Finance ➔ Taxes ➔ United States
Yes, you do. What you do with the profits doesn't matter for the most part. If you turn a profit, you will have to pay taxes on the profits.
2007-03-12 14:56:53 · answer #1 · answered by Bostonian In MO 7 · 2⤊ 0⤋
Having a profit doesn't mean that you take the money out - if your business has more income than expenses, the difference is profit and you'd pay tax on it, whether you reinvested it or not.
2007-03-12 21:20:46 · answer #2 · answered by Judy 7 · 2⤊ 0⤋
you have to file.......and if the money you reinvested is deductible you can possibly end up claiming 0 income
example: i used to run a home day care....i had to claim the money parents paid me, but i was able to deduct groceries (for the daycare) milage on the vehicle i used for the kids, toys and books that i bought.....so even though my "profit" (what parents paid me) was almost $20k....i only had like $8k income from the business after deductions......im assuming you are talking about a similar situation only instead of spending a percentage of the money for business improvements you spent all of it
2007-03-13 08:38:42 · answer #3 · answered by CRmac 5 · 0⤊ 1⤋
Yes!!! File your taxes!!! If you are an individual owned business you will need to file your schedule C....even if there is no profit.
Remember, the IRS won't come after you right away...they will let it keep adding up, until it is well worth their trouble to come audit you, take all your stuff & haul you off to jail!
2007-03-13 00:21:03 · answer #4 · answered by T H 4 · 0⤊ 2⤋