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Old 03-10-2008, 01:42 PM
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Income from lessons

Hello,

I taught private aquatics lessons last year. It started out with teaching a few friends' children and grew quickly over four months. I ended up recieving $11,000 in personal checks and another $900 in cash from families over a four month period which I deposited into my personal checking account. I did not have a business license. I have already filed my 2007 taxes and am wondering if I should do an ammendment and include this money as income. However, I am afraid this will raise a red flag with the IRS. I am going to get a business license and business bank account for the summer of 2008 and keep track of any and all expenses, but I need to decide what to do about the 2007 income. Should I do an ammendment? If so, what forms do I use? Of course, I'd like to put this worry to bed before April 15th. Any advice would be much appreciated.



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Old 03-10-2008, 07:06 PM
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Should you amend a tax return knowing that there were some income omissions?

Well, the fact of the matter is that failure to report income is considered Tax Fraud especially if the income represented a material amount. Clearly, the income that you received (especially in the light of the facts that you presented) were paid in the form of checks MUST be included in your tax returns. Period! There can be no argument in this matter!

I strongly recommend that you file an amended return as soon as possible and in this manner, you may be able avoid any possible penalties and interest. If unsure how to file an amended tax return, I strongly recommend that you seek the services of a professional CPA or a Tax Professional!

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