Have a Tax Question? Ask a Tax Expert
Hi and welcome to Just Answer!I do not see much to worry about. You do not need a company to run the business. As a solo proprietorship - you will report all your income and qualified expenses on the schedule C - www.irs.gov/pub/irs-pdf/f1040sc.pdf. You will deduct your gross receipt $10,127 in line 1.The cost of good sold $8,467 will be determined in Part III line 42 - and will be deducted on line 4.Gross profit on lines 5 and 7 will likely be $1,660.Then you will claim deduction of other business expenses on lines 8-27 - in particular travel expenses will be reported on line 24. And finally - your net loss will be recorded on line 31 - and will be transferred to your tax return - from 1040 line 12.I do not see any mistakes from your side. Just be sure to keep all supporting documents.Let me know if you need any help or clarification.
I didn't register as a solo proprietorship either
hi Lev are you there?
There is no requirements to register your business. As long as you will report your business transactions on your tax return and file your tax return before the deadline - you are OK. I do not see any reason for you to worry.
when is the dead line?
For 2011 tax year - you have to file your tax return by Apr 15, 2012.
okay if I feel an LLC now
If I pay taxes in Ghana can I deduct them from my US taxes and if so how?
You may register the LLC - if you want to separate your personal and business matters. In general - that will not make any difference as taxes are concern. A single member LLC for federal income tax purposes is disregarded entity - means you will report all your business transactions as if you were a solo proprietorship - exactly as I mentioned above on the schedule C attached to your tax return.
If the same income is taxed in the US and abroad - you may claim a credit for foreign tax paid - thus effectively will avoid double taxation.If also may deduct taxes paid in connection with your business activities on schedule C, line 23.