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Help me help my family! What are the penalties for not filing business or personal taxes for going on 3 years?
A family member owns his own business but has combined and meshed his personal finances with his business finances and not filed taxes for either one in going on 3 years. He thinks once he files he will get money back for child credits and such but I thought you can't get money back if you haven't paid any to start with. Obviously there are a great many details I am not going into for lack of space and boredom factor but am looking for basic guidance. He is broke and about to lose his house in foreclosure so any advice is welcome. Thanks for taking the time!
4 Answers
- A HunchLv 71 decade agoFavorite Answer
For sure he will owe self-employment tax (social security and medicare) = this is 15.4% of the profit.
If he is a sole proprietor, income tax is treated the same for him & his business. There are credit he may be eligible for like EIC and making pay work which could reduce or elimate his SE tax liabilitiy.
He needs to talk to a CPA or an EA, but it's worthless if until things are cleaned up and has an idea of specifically what to talk to them about.
- getting the "house" in order would be the first step.
- 1 decade ago
Without a complete analysis of his books and the details of his tax situation (filing status, number and ages of children, etc.) there's no possible way to say where he sits. He may be entitled to thousands in refunds or owe thousands in taxes, penalties and interest.
Best advice? Consult with a local CPA or EA.
- elaeblueLv 71 decade ago
He needs to go to a professional to assist him with the taxes.
He would still get child credits etc even though its late - and they might offset any he might owe. There are too many varibles to give a good estimate on here.
- 1 decade ago
I AM SELF EMPLOYED ALSO AND I AM A TAX PREPARER. HE MAY BE DUE A REFUND, DEPENDING ON INCOME MINUS EXPENSES, EVEN IF HE DID NOT GET A W2. HE JUST NEEDS TO GET HIS INCOME TOGETHER PLUS HIS EXPENSES AND FILE THEM. ALL INCOME WE MAKE HAS TO BE REPORTED. I CAN HELP YOU IF YOU WOULD LIKE. MY OFFICE # IS 770-749-1065.
