Do I need to file taxes if I took a year off from my sole proprietorship?

[arthurjaniii]

We had another child so there was no income for my sole proprietorship. It may generate income in the future, but last year it was 0. Do I need to file anything or should I put 0?

[AnnetteB]

You could handle the situation either way, with some exceptions. 

One option would be to not report any income or expenses for the sole proprietorship for 2016.  Then report it again in a future year when you have income and expenses.

The other option would be to continue to report it on your 2016 return showing zero income.  You would need to choose this option if you have a Federal ID number for the business, if you carry an inventory, if you are depreciating any assets used in the business, or if you had any expense carryovers from prior years (such as for a home office limited by business income).  These items need to be carried forward until you officially “close” the business.