Filing my first tax return (self-employed). No income, little expenses, what do I do?

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What is the name of your state (only U.S. law)? CA

Hi, I need urgent help.

I registered as self employed in Jul. 2015 but unfortunately I didn't actual bring in any income in 2015 (no work) and I had only little expenses (about $540).

I read a lot about taxes but I’m not still (absolutely) sure if:

1) because I registered before the end of the tax year I have to file my return even if I earned zero? I read that you can avoid to fill the tax return if you earned less than $400 but I didn’t find and official IRS article about that (only blog webpages around the web)

2) I read somewhere you can fill the tax return with 0 earned and write the expenses, and ask the refund of these expenses for the next year tax return (2017 where I hope will start to earn something finally&#8230.

Beside I have free Medical Health plan (due to no income situation).

They are not good times for me and it's my first return, so any help would be great.

Thanks

V

 

[tranquility]

File a return. There are many advantages.

You can deal with the Obamacare nightmare (Really, how much longer will it last?) and lock in your facts and figures for your taxes. It is a bad day when The Man decides that because you do a certain thing you deserve a certain amount of income. Then is the theory of Net Operating Loss (aka NOL) carryforward. [or back] If you were upright, reverent, thrifty and brave in a business you wanted to make a profit in, the loss is deductible. Under certain facts, you can carry that loss back or forward. (If doing your own taxes, I suggest you elect to not carry it back.) There is a benefit for when your hard work does make money.

All that includes the fact The Man has to deal with this in a certain amount of time. It starts the clock on their challenge.

File. The only bad thing is your time.

 

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Hi tranquillity

thank you very much for your opinion. I didn't understand very well your explanation but I've understood it should be good... so I've taken a look at the IRS' publication 536 about what is what you said about "carry forward (or back) the NOL".

So, if I've understood your suggestion: I should fill the taxes return because I'll use my loss (NOL) in order to lower my next taxes returns up to the next 20 years. Right?

Otherwise I don't understand what you said about Obamacare and your phrase "It is a bad day when The Man decides that because you do a certain thing you deserve a certain amount of income." Can you please help me to understand better?

 

[davew128]

Exactly how DOES one register as self employed?

 

[LdiJ]

Exactly how DOES one register as self employed?

CA I do believe is one of the states that requires someone to register as self employed if they are doing any business while not employed by someone else.

 

[davew128]

CA I do believe is one of the states that requires someone to register as self employed if they are doing any business while not employed by someone else.

It's not. There is no such thing here. A locality may require a business license, but its not specific to self employment.

 

[tranquility]

Exactly how DOES one register as self employed?

I took it to mean he got a business license of some sort.

To the OP:
Obamacare requires you have health insurance and it is reported to the government through your tax return. There are issues involved especially if you got any aid from the government to pay for the insurance from an exchange.

As to what The Man requires, in CA, people who get a business license but who don't file are often sent a letter from the Franchise Tax Board that people with such and so a license statistically earn such and so income, therefore we will assess that much income to you. Please pay the tax on that. (Or, submit a return showing differently.) Better to start the ball rolling on your terms than to be afraid and rush around when the nasty letter comes.

 

[FlyingRon]

It's not. There is no such thing here. A locality may require a business license, but its not specific to self employment.

Correct, and it really only applies to certain occupations in most of the cases I'm familiar with.

 

[davew128]

As to what The Man requires, in CA, people who get a business license but who don't file are often sent a letter from the Franchise Tax Board that people with such and so a license statistically earn such and so income, therefore we will assess that much income to you. Please pay the tax on that. (Or, submit a return showing differently.) Better to start the ball rolling on your terms than to be afraid and rush around when the nasty letter comes.

My particular favorite was the former realtor who was recovering from Stage 4 prostate cancer and hadn't worked (or filed returns) in several years. They estimated he averaged $125k income for each year his license was active and assessed tax accordingly.

 

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I did my tax return. Thank you all for the advices.

See you next year...