Don’t Think State Taxes Matter?
With many state budgets in serious deficits, many states have decided a good way to raise money and help balance their budgets is to enforce state income tax laws more aggressively.
Taxes for the Horse Business
In the horse business many of us often race or show our horses in multiple states. This can often mean we have income in more than just our home state. As a result you are then required to file a state tax return in each state you do business in.
What happens if you don’t file taxes in each state?
This will depend on the particular state and the amount you earn in that particular state.
The more you earn and the higher the tax rate in the particular state the greater the chance is that state will be looking for a tax return from you.
Virtually every state receives computer files from the IRS telling them how much you made and where you made it. The states then run these numbers against their tax filing and determine who did not file and how much they would have owed.
Each state has its own criteria as to how much you must owe before they will take action against you. Be assured when they do it will come with severe penalties and interest that will boost your bill by as much as 50%.
Even worse the state could decide to audit you and might determine you have erroneous deductions or that your business is really a hobby.
Why risk this fate? Let the experts at the Equine Tax Group handle your state income tax problems