Walk the loop

Personal taxes: what to check before the call

Your personal returns.

Why it matters: The company's profit lands on your return. The return is where the year is finally scored.

Answer it and see your picture.

What lives here

Last year's filed return
This year's estimates
Letters from the IRS or the state
The pieces of the company that flow to you

What good looks like

Filed and current, nothing open.
Estimates paid on the four dates.
Every letter answered the week it arrived.

Do this yourself

Find last year's return and keep it in one place.
Put the four estimate dates on your calendar.
Open every tax letter the day it comes.

Three years of returns

Illustrative composite. Not a real client.

Item	2023	2024	2025
Return	Schedule C	Schedule C	Schedule C
Receipts reported	$1,080,000	$960,000	$800,000
Gross margin on the return	51.0%	40.0%	52.0%
Schedule C profit	$378,800	-$16,119	-$211,800
Self-employment tax	$30,010	$0	$0
Federal tax on the household return	$125,733	$0	$0
Paid in during the year	$110,644	$19,018	$0
Balance due or refund	$15,089 due	$19,018 refund	$0
Late-payment penalty	$0	$453	$0
Arizona tax	$8,749	$0	$0
Arizona balance or refund	$0	$4,374 refund	$0
Retirement plan contribution	$0	$0	$0

The retirement line is $0 in every year. On the 2023 profit, a SEP would have held $66,000. A solo 401(k) would have held the same $66,000. Before the annual addition limit, 20% of the profit after half the self-employment tax is $72,759. The deferral is $22,500, and it does not raise the cap on this profit. 2024 and 2025 have no profit to put in. On a profit year, the contribution is set from that year's profit before December 31. This example does not promise a dollar result.

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