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Became self employed toward end of year...

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D

Dawg30

Guest
What is the name of your state?
Georgia

No income was gained until this tax year. Can the deductions be taken even though no income was generated from the business? If so, is Schedule C appropriate and show only a loss on the schedule with no gross profit showing?
 


abezon

Senior Member
File schedule C. Expenses incurred to set up the business before you were trying to get clients are startup costs & must be amortized over 5 years. Expenses incurred after you were trying to get clients are operating expenses & go on schedule C. Don't worry - a large loss is common the first year. As long as you can show income & a profit within the next couple years, the IRS will have a hard time claiming the business was just a hobby.
 

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