Business income

[jtbruder]

I had a consulting business which I abandoned in 2018 when I started working for a new company. However, although my gross income from this business is 0 in 2019 I am seeing a net income of -1,277 and can't figure out where this is coming from. 

When I edit and go through the questions I am not seeing this number anywhere

[jtax]

Try looking at the actual forms (Schedule C). Did you have any assets that you were depreciating in the old business? That depreciation would automatically be included in the next year. Just a thought.

[Critter · Accepted solution]

If you did not properly close the business on the 2018 return then the unresolved assets would have carried forward.  Review the return. 

[Carl]

Did you report your SCH C business as closed or otherwise disposed of? If not, then the IRS is expecting a SCH C from you on your 2019 return. Especially if the business has assets, inventory, claimed a home office, or claimed "ANY" vehicle use.

Closed SCH C Business

You need to report your business as "sold or otherwise disposed of".

Start working through your business "as if" you still own it. On the 2nd or 3rd screen in select the option for "I sold, closed or otherwise disposed of this business in 2019". If prompted for the date, enter the day after you last day of business in 2019. This date can not be earlier than Jan 1, 2019.

If your business had no income in the tax year, you can not leave the business income section blank. You 'must' enter a digit, even if that digit is a ZERO.

If you had no business expenses, then you can leave that blank and don't even have to work that section through, if you don't want to.

If your business carried an inventory, the end of year (EOY) inventory must be zero. If it's not, then in the COGS section (Inventory/Cost of Goods Sold) indicate that you removed the entire remaining inventory for personal use. That effectively makes your EOY inventory balance, zero.

If your business had assets, then you must show the disposition of those assets. In the Business Assets section work through each individual asset on at a time, and select YES on the screen, "DId you stop using this asset in 2018?". Then on the next screen, "Special Handling Required?" if you sold the asset, select no and you will be prompted for your sales information on that specific asset. If you did NOT sell the asset, click the YES button. You must do this for each individual asset listed, even if it's already fully depreciated.

If you claimed any vehicle expenses in your business at any time from the day you opened your business, then you must most show the disposition of that vehicle. Work through the Business Vehicle Expenses section and indicate that you stopped using that asset in the business, when prompted. Then show your disposition of that vehicle. Most likely, you'll indicate that it was removed for personal use.

Once you have done all the above, that will make the 2019 tax year the last year you will file a SCH C for this specific business.

[jtax]

There is no where on the Schedule C to report that a sole prop is "closed" and there appears to be no requirement to report it unless there was a sale or there are business assets, which may be the case here. See this prior answer for more details.

https://ttlc.intuit.com/community/business-taxes/discussion/i-need-to-report-the-closing-of-my-sole-...

[Critter]

There is nowhere on the Sch C to indicate the business was closed  HOWEVER in the TT program you will indicate the closure in the Business INFO tab so the assets are dealt with and the Sch C is not carried forward to the following tax year ... it is a housekeeping issue.