Small Business

Can I combine my first 2 years of taxes in one tax return ?

I started my business in mid 2019, I made around $8,000 in revenue in 2019. When I wanted to file business taxes for that year, my accountant told me that I don’t have to file since it’s first year of business and I haven’t made that much and it would be added to next year income ( meaning 2020) so when I filed for 2020 taxes he just added tha $8000 I made in 2019 to the total revenue from 2020 as a total number and filed it for me . Is that legit? Or do I need to file for 2019 separately ? And if so can I do that now in late 2021?

Answer:

Technically you cant combine years like that. As a practical matter though, the $8000 of revenue probably results in a much lower number for taxable income after accounting for expenses so if the income is immaterial for that year, adding it to 2020 might not be a real problem. Also keep in mind if there were an audit, showing the income, even though its in the wrong period could help with negating any sort of under reporting penalty.

Of course you really should consider amending 2019 to report everything in the correct year, but if you decide not to do that, be sure everything from here on out is reported in the correct period. Combining revenue is not proper.

Answer Provided by: personimage David Huff
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