Introduction
This post is about federal tax returns, and it does not matter if your returns are done by hand, using an income tax preparer, or if you do taxes online. Also, be aware that there is special income tax help for senior citizens available. As a last resort, you may also visit the IRS’s federal income tax website at https://www.irs.gov/ if you have questions or other concerns about your taxes. However, be warned that, because of the complexity of our tax system, you may not receive a completely accurate response from the IRS…trust me…it’s already happened to me and to others.
One other thing: When starting a business of any type, contact your local and state authorities governing such matters to determine your legal requirements for running said business. Be sure your zoning laws will permit the business. The last thing you need is trouble from the authorities.
***Disclaimer***
I am not an accountant or tax expert, nor do I pretend to be. My intention is not to give you tax or accounting advice. My intention is to make you aware of various issues that becoming a business owner brings about, so that you know what questions to ask and try to get answers to from a person who is more qualified than me and knows your individual situation better than me.
***End Disclaimer***
I completed my income taxes early this year (first week in February) for the first time in about 10 years. Traditionally, I normally wait until the last possible moment to file, even if I complete them earlier (just my quiet, personal protest for having to pay so much in taxes). In this post, I have put together some Income Taxes Info to help you who have yet to file for 2017 (in the USA), and in some cases, even if you've already filed. It isn’t the amount of taxes taken out of paycheck that matters, in the end; rather, it’s how much of that “tax” money you ultimately DON’T have to pay. Having a home-based business is one of the best income-tax-reducing vehicles available to the average person. Wealthy Affiliate is perfect for that purpose.
Back when I was still in the US Air Force, I served as a VITA representative for several years (Volunteer Income Tax Assistance) doing taxes for my fellow Air Force comrades. As such, I became comfortable with tax issues. Since then, I’ve done my own taxes each year, but for the last 8 or 9 years, I’ve used an online tax service (TaxAct, H&R Block, and TurboTax).
Up Next: So, Why Are You Telling Us This?
Reply
"The general rule is that if you have not turned a profit in at least three of the prior five years, the IRS will categorize your business as a hobby. This may be extended to a profit in two of the prior seven years in the specific case of horse training, breeding or racing."
Also, how long ago was that? You are able to file an amended return for up to three years after the due date of the original return (File IRS Form 1040X).
Finally, your WA business has nothing to do with those other businesses. You are legitimately operating an internet business to make a profit. Thus, you can, and should, treat it as such. If your CPAs are telling you that you cannot claim expenses for your WA business, I'd look for another CPA.
Anyway, wish you continued success,
Joshua
