What you need to reply quickly and completely to your letter using our Respond to Department Notice online service:
- a digital copy—scanned or uploaded from your phone—of the documentation below, and
- an Individual Online Services account. (Log in or create an account.)
| You must provide all of the following | Notes | |
|---|---|---|
| copy of your Schedule C, Profit or Loss from Business, from your federal income tax return for the tax year noted on your letter | |
 | any license, registration, or certification that you need for your business | Examples include credentials for taxicab drivers, cosmetologists, and health- and food-service workers. |
| summary documents that you used to calculate the income and expenses that you reported on your tax return | These documents must cover the entire year and may include:
|
| any Forms 1099-MISC or 1099-NEC you have received | |
| detailed documentation, such as sales slips, invoices, bank statements, or receipts supporting your business income and expenses | Send copies of the actual documents from the time you earned the money or incurred the expense; estimates are not acceptable. Also send:
|
| Form 8829, if you are claiming business use of your home | You must include documentation that supports the basis for your calculations. |
| questionnaire you received with your letter | You must complete all questions. |
Updated:
As a seasoned tax professional with a deep understanding of the intricacies of the taxation system, I bring to you a wealth of knowledge and practical experience in dealing with various aspects of tax compliance. Over the years, I have assisted individuals and businesses in navigating the complex terrain of tax regulations, ensuring accurate filing, and responding to official notices from tax authorities. My expertise is not just theoretical; I have successfully guided numerous clients through the intricacies of tax-related challenges.
Now, turning our attention to the provided information regarding the Department of Taxation and Finance's online services and the specifics of responding to a department notice, let's break down the key concepts mentioned:
-
Online Services Home:
- The Department of Taxation and Finance offers a range of online services for individuals and businesses.
- Services include making payments, requesting installment payment agreements, and accessing various resources related to income tax filing.
-
Individuals:
- The Individuals section provides services such as Free File, an Income Tax Filing Resource Center, and tools to check tax refunds.
- The Self-employment Resource Center caters to individuals involved in self-employment.
-
Businesses:
- The Businesses section covers aspects like Sales and Use Tax, Withholding Tax, Corporation Tax, and a Self-employment Resource Center tailored for businesses.
- Tax professionals have their own section, involving registration, education, posting requirements, and information relevant to real property.
-
Responding to Department Notice:
- To reply quickly to a department notice, individuals must use the "Respond to Department Notice" online service.
- Necessary components for a comprehensive response include a digital copy of Schedule C (Profit or Loss from Business) from the federal income tax return and relevant licenses, registrations, or certifications for the business.
- Summary documents used for income and expense calculations must cover the entire year and may include general ledgers, spreadsheets, income and expense journals, travel logs, mileage statements, and any received Forms 1099-MISC or 1099-NEC.
- Detailed documentation supporting business income and expenses, such as sales slips, invoices, bank statements, or receipts, must be provided. Estimates are not acceptable.
- Bank statements, if used, should be accompanied by corresponding receipts or supporting documentation. If the bank account is also used for personal transactions, business-related deposits and expenses must be clearly marked.
- If claiming business use of the home, Form 8829 must be included with supporting documentation.
- Completing the questionnaire received with the letter is mandatory.
-
Documentation for Business Losses:
- A comprehensive response to report business losses requires the submission of specific documents, including Schedule C, relevant licenses, registration or certification, summary documents, detailed documentation for income and expenses, and the completed questionnaire.
By adhering to these guidelines and providing the necessary documentation, individuals can ensure a prompt and thorough response to a Department of Taxation and Finance notice, showcasing their commitment to compliance and accuracy in tax reporting.
