Tax Law (Questions About Taxes)/2013 Self Employed?

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Question
Hi, I have a friend that has never filed taxes. She is 24 and in 2013 earned approx $10,000 paid by cash and personal checks from various customers. I believe she has to file as self employed, schedule c or c-ez. She does not have a EIN number. She resides in CT. She owns equipment used for work that was purchased in previous years. (Fyi She has 1099s for years 2008 and 2009 - that i know of -but let's focus on 2014 for now).

I'm thinking to have her file for an extension for 2013 taxes and apply for a EIN #. She will file as self employed schedule c or c-ez. Once 2013 is filed she can then go back and file back taxes for the previous years.

Is this correct?

Answer
She already has a tax id number.

She CAN collect more tax ID numbers, but for what reason? What were thinking a new tax id number would do for her?

The 2013 tax year is done. There is nothing that will change for that year. Even if you got a new tax id number, the money didn't go to the new number, it went to the old number. Bank deposit already done.

If you did get a new EIN, and you can get it on line from the IRS, with no delays it can take as little as 10 minutes. Would that change the way the IRS looks at the tax return? No. It would still be her personal 1040 with an extra attachment (Schedule C).

Just do all the tax returns, she might have a refund from previous years.

Richard.

p.s. If she is going to be profitable from now on, then there are huge things you can do to make this a better situation than doing business as a self employed individual.

Call me.

Tax Law (Questions About Taxes)

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Richard Fritzler

Expertise

Specializing in Business and Corporate taxation. Comparing the advantages and requirements of different business entities, such as Sub-S Corporations, LLC`s, Partnerships (Both Limited and General), Doing Business as a Sole Proprietor, or Using a C-Corporation. Issues regarding K-1 distributions, 1040, schedule C, 1120, 1120s. Are you considering domiciling a Corporation in a low tax state? I can review the benefits and misinformation that exists.

Experience

I have been in the business of assisting business owners in reducing their taxes and liability since 1986.

Organizations
National Small Business Owners Association.
Publications
Contributing author to "The Corporate Standard Newsletter".


Publications
Contributing author to "The Corporate Standard Newsletter".
Ezinearticles.com articlesbase.com

Education/Credentials
I have been in the business of assisting business owners in reducing their taxes and liability since 1986.

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