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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 577
Experience:  10 years experience
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How do I get started at understanding how to best prepare

Customer Question

How do I get started at understanding how to best prepare taxes if I was a sole proprietor of a business that barely makes any money once factoring in expenses, plus worked for a company making about 10k which had taxes taken out and have a w-2, and a 1099 contractor which was about 20k I'm not sure how I should file, with which forms. It's my first time and have been operating like this for the last few years without filing. I realize I've let this get out of hand and can use advice. I realize I need to correct this but have been economically scraping by. I realize I can't delay any longer and wanted to see if anyone has any advice. As a tour guide I have expenses like food for foodie tours and haven't kept every receipt although I do have a ton. Also wanted to know all my potential write offs such as transportation and such to minimize my tax back payments.
Submitted: 8 months ago.
Category: Tax
Customer: replied 8 months ago.
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Expert:  Tax.appeal.168 replied 8 months ago.

You will file a 1040 and a Schedule C. The Schedule, or maybe two Schedule Cs. Stay with me here. As a W2 employee, you report your wages as any other person who works for someone. As sole proprietor, you file the Schedule C. Now you also mentioned that you were an independent contractor. If the I.C. position was in the same line of business as your sole proprietor business, you only need to file one Schedule C and report all of your income and expenses on the Schedule C. On the other hand, if the I.s. position was in a totally different line of work than the sole proprietorship, you would need to file a second Schedule C.

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As for expenses, a taxpayer is allowed to deduct reasonable, ordinary, and necessary expenses incurred in relation to the trade or business. Now since you don't have receipts, that could be an issue if you are audited. I see that you requested a telephone call. I will be glad to discuss this matter with you.

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