I haven't filed my sole prop taxes, ever. I started my business in Aug of 2018. I had Medicaid clinets some years and private some, and. A combo others (group home) so some income is not taxable, others is. Anyway I've let this snowball to the point I'm completely overwhelmed and not sleeping. I've found a Bookkeeping Place with an Enrolled Agent and I've gotten printouts of my bank account statements and 1099's from the state. They are starting to do the accounting part so we can get all these things filed and so I can get current. They assure me that I'm not the only person who's done this and that I'm making things worse in my mind by reading the Internet. (They said stay off the Internet) That I'm small fish and there's much bigger fish out there that the IRS and state are worried about. They are having me get more organized with QuickBooks and better files. And have suggested that move my payroll over to them too. (That's a whole other fish, but I'm working on that and have a payment plan with the employment department)
How screwed am I? Am I going to jail?
**edit to add, I've never gotten a notice or anything from IRS or my state. I'm trying to get ahead of that.
Terrified haven't filed in a long time.
byu/United_Restaurant384 intax
Posted by United_Restaurant384
5 Comments
People in jail don’t pay their debts, so the IRS doesn’t like to put people in jail. There’s a good chance you owe a significant sum of money and it will take a long time to clean it up, but it’s better to start fixing things and rebuilding now instead of delaying.
Sorry I am confused exactly why is some of your income non taxable?
My dad did not submit taxes to the IRS or to the state for 11 years. The IRS started garnishing his wages, he ignored everything and just did not respond.
He told me this when he had no cash. I, who at the time was a sophomore college, contacted the IRS and started doing all of his taxes. He had a rental property at the time so he was doing a schedule e as well, schedule a and b.
You know what they did.. they stopped garnishing his wages after I submitted the first tax return. They gave him (and I) 6 months to get everything done, and sent him back all the money that he would have got as tax returns (he had a full-time job and had withholding the entire time), and also sent the money back that he paid in penalty from the garnish wages.
They were very fair, and they seemed honestly happy that he straightened out his accounts.
The state of New Jersey was acting like a little bitch, but they eventually calmed down. They weren’t even aware that he didn’t pay taxes until I submitted everything, so we got a few, uncalled for, nasty letters from them.
In general, you only go to jail when you lie or falsify your tax returns. Merely, not filing or paying leads to civil penalties.
No, they won’t send you to jail, especially if you’re making the effort to become current. It’s good that you hired a professional that is not only doing the tax work, but also helping to educate you on bookkeeping practices. Try to sleep better knowing that you will be soon be starting with a clean slate.