Question by jon: does a new small business need to file taxes no matter how much money it made, if any money was made at all?
how would someone file taxes that ownes a small business (on the side type of business only 3 hours a week that made very little) and works for another employer (day job)
Best answer:
Answer by te144
Call the IRS. They’ll be happy to discuss the matter.
Know better? Leave your own answer in the comments!
Since you have other income and almost certainly earned enough to be required to file you must claim ALL income from all sources. You’ll owe income taxes on the sideline business at the very least. And if you earned $ 400 or more from it in 2007 you’ll owe self-employment taxes at roughly 14% on the net profit from the business.
As per Income Tax Rules each and every businessman must need PAN Card number and must give the income details to Government. so any new small businees or big businessman need to file Income tax returns and give coop-ration to country for future developments.
Depends. Sometimes it’s cheaper to file late. Start with the IRS Small Business links http://www.irs.gov/businesses/small/index.html. Here’s a sample:
General
Why Should I File My Tax Return as Soon as Possible?
There are two advantages to filing as soon as possible:
Generally, if a taxpayer is due a refund for withholding or estimated taxes paid, it must be claimed within 3 years of the return due date or risk losing the right to it. The same rule applies to a right to claim a tax credit such as the Earned Income Credit (EIC).
Self-employed persons who do not file a return will not receive credits toward Social Security retirement or disability benefits. Failure to file results in not reporting any self-employment income to the Social Security Administration.
Back To Top
What If I Owe More Than I Can Pay?
Even if a taxpayer doesn’t have enough money to pay, returns should be filed to avoid further penalties for failure to file. The IRS will assist in finding a solution to the problem.
The IRS has streamlined its policies to offer alternative account resolutions if a taxpayer cannot pay in full with the return:
The IRS will help to set up an installment agreement when the situation warrants. Installment payments allow taxpayers to pay the tax debt over time.
The IRS will consider whether an offer in compromise is an appropriate solution.
Back To Top
What If I Don’t File Voluntarily?
The IRS is taking enforcement steps for those who repeatedly choose not to comply with the law. IRS employees will prepare returns when taxpayers do not file. The returns prepared by the IRS might not give credit for deductions and exemptions a taxpayer may be entitled to receive. Bills will be sent to those taxpayers for the tax due, plus penalties and interest.
People who repeatedly don’t comply with the law are subject to additional enforcement measures..
Back To Top
How Can I Avoid Owing Money on Next Year’s Return?
Many people don’t file tax returns because they don’t have enough money to pay the tax they owe. They find out after completing their return that their withholding or Estimated Tax payments do not equal their tax liability.
To help avoid this situation, the IRS can advise taxpayers how to ask an employer to withhold enough tax from their pay. For any income that is not subject to withholding, the IRS can provide information necessary to make quarterly payments to cover any amount to be owed. To make payments electronically, see Ways to Pay Taxes or go to the EFTPS Web site.
Changes in financial circumstances could have an impact on taxes. For example, an increase in income, divorce, or selling an asset, may require adjustments to withholding or estimated payments.
By taking these steps, taxpayers will be better able to meet their tax obligations and avoid tax day surprises.
Back To Top
Will I Go to Jail?
A long-standing practice of the IRS has been not to recommend criminal prosecution of individuals for failure to file tax returns, provided they voluntarily file, or make arrangements to file, before being notified they are under criminal investigation. The taxpayer must make an honest effort to file a correct return and have income from legal sources. A letter from the IRS concerning taxes is not a notice that a taxpayer is under criminal investigation.
The IRS helps to get people back into the system as part of its long-term plan to improve voluntary tax compliance. The IRS wants to get people back into the system, not prosecute ordinary people who made a mistake. However, flagrant cases involving criminal violations of tax laws will continue to be investigated.
Back To Top
References/Related Topics
Filing Late and/or Paying Late: Information You Should Know
Haven’t Filed a Tax Return? Here’s What to Do
Receiving a Bill From the IRS
Installment Agreements
Give this free E-book a shot, you can download it immediately. It’s a no-bullshit newbie guide on how to make money online. Since it’s free, you might as well try it out!