Seeking the help of a tax specialist - business expense related question!?

Question

I was the owner of a small business that just recently went under. I had $12,000 put aside for taxes this year on my business. I want to know what my options are so that I can use these funds and not have to pay the taxes on my business this year. Meaning, can I spend this put aside tax money to try another start up business and because those expenses are tax deductible, I I won't have to pay taxes this year on my last business (becomes a wash)?

Answer 1

since you did not say want kind of taxes these dollars were ear marked for it is really an impossible question to answer -- sorry.

Answer 2

Whether or not the defunct business has a tax liability, that money likely is taxable income.
If you were a proprietorship, that money is "personal income" and is taxable as such.

If you were a corporation, I assume that you have withdrawn it from the corp, and it becomes wages, which also is taxable income.

Compute the estimated tax due to IRS. That estimate is due on a quarterly basis, and if the business was dissolved before Sept. 15, past, the tax should have been submitted to the IRS on Sept. 15. If so, you may have a late penalty.
If this occurred after Sept. 15, the tax is due on Jan. 15, 2008.

After taxes, the balance is yours to do with as you please.

Answer 3

If the money you are talking about was withholding from employee paychecks, don't even THINK about spending it on something else.

If it was money you had set aside to pay income taxes, you might be able to spend part or all of it on something else. If your company went under, I'm assuming that you had a loss for this year so wouldn't owe income taxes or self-employment tax. You might owe some other taxes though, so check with a CPA.

Answer 4

Until you do your final financial statements, I wouldn't spend any of that money. Was business a sole proprietorship, partnership or corporation?. You may still owe local gross receipts taxes, which have nothing to do with profit.