Income taxes - minimum amount to file

[KAREN24]

What is the name of your state? VIRGINIA

My significant other went on unemployment the beginning of 2005. He collected for about 5 months while he worked on his house which he then sold (he lived in the house for 3 years). He took this profit and put into buying and selling cars through a business his brother owns (he uses an independant dealers license and sells on his brother's lot) . He has not paid himself a salary, but has taken money out to pay personal expenses when needed. Nothing seems to be organized on paper and any profit made from the sale of cars has not been reported, nor taxes paid on that income.
He claims he does not need to file his income taxes. He received only a minimum amount from Unemployment and there is no record of him earning a salary anywhere else.
I know the fact he has not reported income on the sale of cars has got to be illegal. But is there a minimum amount of money earned for the year before you have to file income tax?

Thanks,
Karen

[LdiJ]

Originally Posted by KAREN24

What is the name of your state? VIRGINIA

My significant other went on unemployment the beginning of 2005. He collected for about 5 months while he worked on his house which he then sold (he lived in the house for 3 years). He took this profit and put into buying and selling cars through a business his brother owns (he uses an independant dealers license and sells on his brother's lot) . He has not paid himself a salary, but has taken money out to pay personal expenses when needed. Nothing seems to be organized on paper and any profit made from the sale of cars has not been reported, nor taxes paid on that income.
He claims he does not need to file his income taxes. He received only a minimum amount from Unemployment and there is no record of him earning a salary anywhere else.
I know the fact he has not reported income on the sale of cars has got to be illegal. But is there a minimum amount of money earned for the year before you have to file income tax?

Thanks,
Karen

In this case he needs to be reporting the income no matter what....its self-employment income. He is going to be in alot of trouble when the IRS catches up with him, and they eventually will.

[marragtop]

I think at a minimum, he has to file a return and report the unemployment as there is a recod of that. If the amount is low enough, then he may not owe any taxes, but he still needs to file a return. If he doesn't file, it will be a huge red flag. As to reporting the 'other income', that's between him, his conscience, and the IRS if they ever catch up with him. I suspect when dealing in the used car world, you probably make more enemies than friends.....

[LdiJ]

Originally Posted by marragtop

I think at a minimum, he has to file a return and report the unemployment as there is a recod of that. If the amount is low enough, then he may not owe any taxes, but he still needs to file a return. If he doesn't file, it will be a huge red flag. As to reporting the 'other income', that's between him, his conscience, and the IRS if they ever catch up with him. I suspect when dealing in the used car world, you probably make more enemies than friends.....

He has a license to deal used cars....it WILL catch up with him. He is required to file a return that includes ALL of his income (an corresponding expenses of course).

[Snipes5]

This is slightly OT, but IF his only income were from Unemployment, and it was less than $8200, no he would NOT be required to file, and no it would NOT be a "huge red flag".