Accounting for Sole Proprietors: Tax & Bookkeeping Tips
in Business, Accounting & Taxes ·
Hello,
I have a question regarding the annual income tax filing for self-employed freelancers. Does the total tax liability for 2016 get reduced by prepayments made specifically by December 31, 2016, or does it include all prepayments applicable to the 2016 tax year (including those paid in January or February of 2017)? My accountant insists that my obligation should be offset by all prepayments pertaining to 2016, but according to the IRS guidelines, it seems they only accounted for what was actually paid by December 31, 2016. As it stands, I'm looking at a significant balance due along with a mountain of interest penalties. Who is correct here? Is there a specific place where this rule is documented...
Thanks in advance for any help you can provide.
I have a question regarding the annual income tax filing for self-employed freelancers. Does the total tax liability for 2016 get reduced by prepayments made specifically by December 31, 2016, or does it include all prepayments applicable to the 2016 tax year (including those paid in January or February of 2017)? My accountant insists that my obligation should be offset by all prepayments pertaining to 2016, but according to the IRS guidelines, it seems they only accounted for what was actually paid by December 31, 2016. As it stands, I'm looking at a significant balance due along with a mountain of interest penalties. Who is correct here? Is there a specific place where this rule is documented...
Thanks in advance for any help you can provide.