He didn't file taxes for 2005 and in that year, he put $20,000 on his own money (from stock he sold) into a business (with another guy) and made a little money. (less than $1000). They filed their company, got EIN number and all that stuff in October of 2005. He also had other income from W2 source.
Now in 2006 the company dissolved (in June) due to conflict between him and the other guy. They made no money in 2006. So I'm thinking he needs to file 2005 first because that's the year he sold the stock, started the business and made a little money. Then he should file this year at the same time. Can anyone shed some light on this for me. Thanks.
2007-04-04 17:43:05 · 3 answers · asked by laurel 1 in Business & Finance ➔ Taxes ➔ United States
He does need to file 2005 as well as 2006, but it doesn't really matter which order. In fact, I would suggest he get 2006 filed asap since the deadline is fast approaching. He is already late with one return, why make it two? He can still file 2006 electronically if he wants, but 2005 must be filed on paper. Forms are available at www.irs.gov if he needs them.
2007-04-04 17:49:15 · answer #1 · answered by Brian G 6 · 0⤊ 1⤋
Yes. Go to a professional. When you decide to help someone and don't have any idea what you are doing, you may cost them quite a bit. Yes, he needs to file 2005 quickly and 2006 timely or he will incur more fines and penalites. There are penalties for not filing and major interest charged on unpaid taxes.
2007-04-05 03:02:38 · answer #2 · answered by towanda 7 · 0⤊ 0⤋
He needs to file his personal return, but he will need to get a copy of the companies return also. He will be able to take deductions for all of his expenses and may not have to pay much taxes at all. You need to consult a tax professional though becuase each individual persons situation is different.
2007-04-05 00:50:57 · answer #3 · answered by Miss Know It All 6 · 0⤊ 1⤋