Q: Question regarding business taxes, amount possibly owed, student loans, garnishment and payment plans
I filed taxes for my business and informed the IRS my business made 11k profit in 2016 and 13k in 2017. I informed them that the gross revenue for my business was 90k in 2016 and 138k in 2017. I dont have expenses to show them as I didnt keep receipts but I did a rough estimate of my expenses to be 79k in 2016 and 125k in 2017. If I am unable to show documentation (physical proof) of my expense, what are my consequences? How much would I owe the irs if they say I have to pay them based on my entire gross of 90k and 138k in year 16 and 17? Is there a percentage?
Also, if I am unable to pay them the amount that I owe, can a payment plan be worked out? If a payment plan can be worked out, what is the minimum amount I would have to pay them each month? I also go to school and take out student loans while going to a 4 year college. Can I still go to school and take student loans from the government as I am trying to get my bachelor's degree, or will I be denied those loans? Thanks
A:
Estimates without documentation are not good enough for the IRS. You need to work with a tax accountant or CPA to reconstruct some sort of paper trail for your expenses. Otherwise, your eligibility for a student loan is going to be the least of your problems. If the IRS denies your deductions for your business expenses, you are going to end up owing tax on the entire amount of the income, and you will owe the IRS a ton of money you don’t have. Contact a CPA or tax accountant to help get you out of this mess.
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