4 replies
Income taxes are based on the amount of profit you make. So if you spend $10,000 and make a total of $20,000 you should only be taxed for $10,000 since that is your profit.

But how does the IRS know how much you spend in IM? Do they just tax the total amount made?
#question #taxes
  • Profile picture of the author PhiladelphiaSeo
    You should call a tax professional or CPA. Most of these folks will give you a bunch of free info in hopes that you hire them.
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    • Profile picture of the author Jill Carpenter
      1. Talk to an accountant.

      2. Keep All your receipts.
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      "May I have ten thousand marbles, please?"

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  • Profile picture of the author timpears
    You need to keep your books, and receipts. The IRS will not know, you have to file a report, usually a 1040 form and additional forms to substantiate your income.

    If they suspect you are not telling the truth, and a random chance from all filings, they will audit. You better have the documentation to prove all you say in your filing. Audits are not a lot of fun if you don't have all the documentation. I know, I was lucky to skate one in which I had to recreate everything and I think the auditor took pity on me and let me skate on a few things, but I had to work hard to get duplicate receipts from a lot of companies I had done business with.

    Please don't take this as legal advice, I am not a lawyer and this is just from my personal experience.
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    Tim Pears

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  • Profile picture of the author aluminum
    Thanks guys. You answered my question perfectly. Sounds like a pain, but at least now I know.
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