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Another Question
Posted Saturday, March 24, 2012
Question - During the past year I had to do several different things to make a living income. How should I report them on my return?
Sounds like you were self-employed. If so you would want to use Schedule C [or C-EZ] to report your income. While you could use more than one Schedule C, or even diverse income sources, it is not necessary. You can probably combine all the income and all the related expenses on a single Schedule C.
Think of a department store, do you think they file a separate return for each department? NO! Of course not, each store [or chain] would use one tax return for all departments. However, their internal reporting would contain each department's activity for management's review.
So don't beat yourself up, just combine all the businesses and fill in the forms once.
If your situation is new to you, you may benefit greatly by using a professional tax preparer, someone who will guide you thru the process of gathering all that data to turn your self-employed activities into a less painful experience.
Sounds like you were self-employed. If so you would want to use Schedule C [or C-EZ] to report your income. While you could use more than one Schedule C, or even diverse income sources, it is not necessary. You can probably combine all the income and all the related expenses on a single Schedule C.
Think of a department store, do you think they file a separate return for each department? NO! Of course not, each store [or chain] would use one tax return for all departments. However, their internal reporting would contain each department's activity for management's review.
So don't beat yourself up, just combine all the businesses and fill in the forms once.
If your situation is new to you, you may benefit greatly by using a professional tax preparer, someone who will guide you thru the process of gathering all that data to turn your self-employed activities into a less painful experience.
IRAs - and We Do Mean Individual Retirement Accounts
Posted Wednesday, March 7, 2012
If you have the means and have not do so, I would like to remind you that you can still make IRA contributions to you IRA [Roth or Traditional] for 2011 up to April 17, 2012. These personally owned and controlled retirement accounts are a great way to build up extra funds for the retirement years.
How much can I contribute, you ask. For both 2011 and 2012, you can contribute $5,000 [those over age 50 can also contribute a 'catchup' amount of $1000, for a total of $6000]. Your IRA contribution generally cannot exceed your Earned Income, although exceptions apply for spouses.
What is the difference between a ROTH and a Traditional IRA? - A Roth IRA is put away with 'after tax' dollars - not a deduction on the current tax return, but will not be taxable when you take it out after age 59 1/2. A Traditional IRA may or may not be deductible- there is a calculation needed, but will be taxable in whole or part when withdrawn. There are limits on the type of IRA based your income.
Does a ROTH or Traditional IRA work better for you? There are some calculations that we recommend to determine which is better, and those need more time and space than I have at this moment. Sign up for our site or email us with a question. I will respond on the Blog if there is enough interest. Or go to www.irs.gov
How much can I contribute, you ask. For both 2011 and 2012, you can contribute $5,000 [those over age 50 can also contribute a 'catchup' amount of $1000, for a total of $6000]. Your IRA contribution generally cannot exceed your Earned Income, although exceptions apply for spouses.
What is the difference between a ROTH and a Traditional IRA? - A Roth IRA is put away with 'after tax' dollars - not a deduction on the current tax return, but will not be taxable when you take it out after age 59 1/2. A Traditional IRA may or may not be deductible- there is a calculation needed, but will be taxable in whole or part when withdrawn. There are limits on the type of IRA based your income.
Does a ROTH or Traditional IRA work better for you? There are some calculations that we recommend to determine which is better, and those need more time and space than I have at this moment. Sign up for our site or email us with a question. I will respond on the Blog if there is enough interest. Or go to www.irs.gov