Paying Taxes On Flip
I am a person who has never done anything but work as an employee so the only way I know how to do taxes is 1 time a year. I use turbo tax and report what I earned from my job and I am done, until this year.
I did a rehab and sold it for a small profit (4k). I understand that I need to pay taxes on the gain as well as self employment taxes. I know that I need to fill out schedule C and schedule SE. My problem is that I dont know when I need to do this. Do I do it now? Before next April 15th? Can turbo tax do it? Do I do it seperately from my earned income or together? What about my state taxes? As you can see, I am only accustomed to paying taxes as a worker not an investor. Any help would be great.
If you did this as a sole proprietor, then TurboTax Premier can handle the Schedule C and Schedule SE stuff as part of your personal income tax return.
You report the Schedule C activity on the tax return that covers the year of sale. If you sold the property this year, then report your activity on the tax return you file next year. If you get into a large profit situation, quarterly estimated filings may be needed to avoid underwithholding penalties.
Thank you very very much!!!
How do I know when I might be in trouble for underwithholding? Is it a big penalty? I typically get a refund each year.