Paying uncle sam so I can have proof of income.....?

Question

Im currently "self employed" I guess you can say. Long story short im a dancer and I used to work for a company...that didnt go well so now I work alone. One of my friends suggested that I pay taxes, I know nothing about taxes so i was wondering which agency is good. I was thinking about Jackson Hewitt, then I began to read how they've been loosing money or something? My main reason is that I want to buy a car and have proof of income. So any suggestions on which company is best?...cause i have no clue : )

Answer 1

Did you file a 2007 tax return?  Or are you looking to file a return, so you have the proof of income.

If you get a 1099, that will be proof of income for some people, but others require the tax return.

You need to look for a local accountant - preferably an EA plus an ABA or CPA.  The EA means that the IRS has tested the person and they know about taxes.  The ABA or CPA certifies that they know accounting.  ABA's specialize in small business accounting.  CPA's are tested on their knowledge of accounting for big, public corporations, but some of them also specialize in small businesses.

Answer 2

Legally you have to pay taxes every year if year if your self employment income is over $400.  Apparently you have been illegally evading taxes.

What your friend "suggests", that you file a tax return, is more than a suggestion, it's a legal requirement and if the IRS catches up with you, you'll owe the amount you should have paid for those missing years plus penalties and interest, which could easily double the original amount owed.  You'd be wise to see  CPA or Enrolled Agent rather than one of the storefront tax mills.

Answer 3

As a self employed person, you will have to file a schedule C or schedule CEZ.  Jackson Hewitt would be okay, I guess.  But they will charge you an arm and leg to file your return.  Unless you have dependents, you won't be receiving a refund, and you will have to pay those fees up front.  I suggest that you educate yourself.  Go to www.irs.gov, and read publication 535.  Things like your costumes and music can be deduction.  Come tax time, buy yourself Turbo Tax, and you will be able to complete your own tax return.  Unfortunately you will have to wait until you file your tax return, January 2008, before you have the proof you will need to purchase a car.

Answer 4

You can do your estimated tax payments quarterly but as a self employed person, you really cannot prove your income without showing someone your books until after tax time.