Just a 46-year-old mom of 2 in Northern California. My kids are Monkey Monkey(MM) and Drama Llama (DL). I am married to Monkey Hubby (MH). Wow - you must be all on the ball - not many questions - hehe.
But I got 2 easy ones to answer:
"Okay, how about this? I made approximately $400 last year from independent work. I kept absolutely no record of expenses because I thought that I didn't have to file if the amount was under $600 (how wrong I was). Problem is this, if I leave this amount out, I can file 1040EZ, but put it in and well, schelude C and stuff... I was thinking of filing 1040EZ and umm... submit change next year. Total income is less than $12,000. Think the IRS will audit me?"
No the IRS will probably not audit you - if you did not receive a 1099. I hesitate to say it, but such a piddly amount to worry about really. Technically it should be reported in 2006 though. Frankly though if I had a client in your situation I wouldn't even push it. Just know there is a possibility if you were audited (& it was even found) you could have interest and penalties. Why I would ignore it? because time and cost benefit becomes a consideration. If you do report it in 2007 and you are audited down the road that will be something good for you. They may adjust your 2006 return to show an underpayment and 2007 to show an overpayment (or you may have to amend it yourself), but it would mostly be a wash then, and with such small amounts I hate to say it in such a public forum, but uh yeah, I wouldn't sweat it. 
I am VERY anti-tax-evasion but sometimes there are just more considerations like is it worth the effort to pay that extra few dollars taxes 100% correct. Not always so.
"pretty cheap jewelry Says:
April 12th, 2007 at 09:14 am
I am my grandma's power of attorney (she's 97 and alzheimer's-type dementia, can't even sign her name).
I did her taxes via paper and snail mail.
My question is would you recommend switching to efile, such as taxact.com? I am hoping this is the last year I have to do them. However, I said that last year too."
Yes, I just recently (this month) did a little review on Tax Cut where I did my parents tax return. E-file is great when you are doing someone else's taxes. Plus if her return is simple enough, IRS offers free-file. Details here:
But yes, definitely go for it.
April 13th, 2007 at 02:57 pm 1176476225
April 13th, 2007 at 03:46 pm 1176479166
April 13th, 2007 at 04:28 pm 1176481705
But if your entire balance due is less than $1k at the end of the year, there is no penalty. State rules differ. Overall, best just to pay it and avoid the penalty. But for smaller amounts it shouldn't really matter either way.
In general it is recommended to pay your taxes as you go. The exception is if you can do the safe harbor (100% of your prior year tax or 110% of your prior year tax - depending on your income level). We have a lot of clients where we have no idea what their income will be, or they expect a big raise. In these cases they pay 110% (most high income) of prior years tax and avoid any penalties. That's a situation where money in the bank is better.
April 13th, 2007 at 05:46 pm 1176486395