I sold my business (single owner LLC) in December 2019 as assets sale however I discovered I owned some money to IRS and I make all payments for Form 940 in May 2020. I have not filed my 2019 taxes yet. I am preparing Tax Return using Turbotax business. Question 1: Can I deduct my business prior years Form 940 (2016-2019) tax liability payments on 2019 Tax Return?Question 2: I had been filed final state and federal returns in December of 2020 and I was wondering if I can deduct as business expense on my 2019 tax returns?
as a cash basis taxpayer, expenses paid in 2020 for your business are deductible on your 2020. Any penalties and interest paid are not deductible.
what final federal returns? there are no federal income tax returns for a single member LLC.
and how do you file returns in 12/2020? for 2020 again any business expenses paid would be deductible that year
I had been filed final Sales & Use Tax Returns, Form 940 and 941 marked as final in 2020, received 50% payment from business sale in 2019 but still waiting for remaining balance that I anticipate to receive this month. On my 2019 Tax Return I indicated that I sold my business in Dec 2019 however I don't know if I should include 50% of payment received for business and all 2019 actual revenue and expense since I am cash basis taxpayer. How would I record all tax payments made in 2020 for tax year 2019 and remaining 50% payment for my business if I sold my business in 2019?