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Retired from state service last august..I have a small

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Retired from state service...

Retired from state service last august..I have a small businees (counseling) which nets about 2000 dollars a year..What tax forms should I use..

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

My retirement payments are not taxed by the state but are by the Federal ..What tax forms and what info should I have prior to filing my taxes

Accountant's Assistant: Is there anything else the Accountant should be aware of?

Not that I know of

Submitted: 18 days ago.Category: Tax
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Answered in 32 minutes by:
4/4/2018
Tax Professional: James Daloisio, Tax Attorney replied 18 days ago
James Daloisio
James Daloisio, Tax Attorney
Category: Tax
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Hi, my name is ***** ***** welcome to Just Answer.

It sounds like your consulting business is set up as a "sole proprietorship." In other words, you are not a C corporation, an S corporation, an LLC, or a partnership. (But if your spouse operated the business along with you there is a special type of sole proprietorship called a "Qualified Joint Venture, which we won't discuss in this response.)

As a sole proprietor, the tax laws do not recognize any distinction between you and your business.

The tax forms that you file will depend upon the extent of your expenses. You may be able to file Schedule C-EZ, a simplified form for self employed taxpayers. Here is a link to the form and instructions:

https://www.irs.gov/pub/irs-pdf/f1040sce.pdf

If you have a loss, or if you deduct expenses for a home office, or if your expenses exceed $5,000, or you have items to depreciate, you must file Schedule C, here:

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

If you have any profit after deducting your expenses, you would prepare Schedule SE (Self-employment tax). You are responsible for the full Social Security and MediCare payment on your profits (15.3%) but you will deduct 1/2 of your self-employment tax on Form 1040, line 27.

That's basically it. Form 1040, Schedule C-EZ or C, and Schedule SE.

If you claim the home office deduction, you will also need to prepare and file form 8829.

You will want to have an accurate record of your income for the year, and your expenses should be categorized in accordance with the categories that appear in Part II of Schedule C. Anything not fitting in one of the categories in Part II can be reported as miscellaneous expenses in Part IV.

Hope that answered your question. If so, please don't forget to rate this answer. You may always return here with follow up questions on this topic at no additional charge. And thank you for using Just Answer.

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