My audit risk is “Medium” due to closing my business in July of 2016. How do I reconcile my Sch C drop from 2015 to IRS

[george213]

My Sch C income is lower this year due to closing in July 2016 How do I let the IRS know that’s the reason for reduction?

[PeterM · Accepted solution]

There is a box you can check that states that the business was closed/sold in the current year. Once this box is checked and the tax return is filed, the IRS will know everything they need to about your business closing. To do this in Turbo Tax, follow these steps...

• Log into your tax return
• Use the search box in the upper right hand corner. Type "schedule c" in the box and press enter
• This will bring up the "Jump to schedule c" link...click that link
• On the next screen, click the Edit button next to your business (see 1st screenshot below)
• On the next screen, click the Edit button for the option titled Disposed of Business in Current Year (see 2nd screenshot below)
• The last screen is where you actually check that the business has been disposed of (see 3rd screenshot below)