Inactive business - Schedule C

[Brownsfan1]

My Schedule C business was inactive in 2023, however I do not wish to "delete" the business (and the associated historical worksheets / records) from the TurboTax file in the event the business becomes active again.  When previously active, included in business expenses was vehicle expense utilizing the IRS mileage rate.  The TurboTax Federal review for this year's return indicates errors to be corrected, all related to vehicle expense (i.e. enter total miles driven, business miles, was vehicle available off-duty, etc.).  

Since the business was inactive is it necessary to complete these entries if filing electronically?  

Thank you.

[DianeW777]

It depends. It's best to remove the Schedule C for 2023 if there is no activity and nothing has been sold. 

The vehicle can be converted to personal use with a date of January 1st, 2023.  The bottom line is that the IRS does not want forms that do not apply to you in any tax year with zero or no entries.

If you have any other assets in your business you should indicate they were Sold, disposed of, etc.,  then indicate they were converted to personal use unless they were actually sold, then enter the sales information.

The records are important because if you sell or trade your vehicle you will have a taxable event. All business miles, when using the standard mileage rate, have a depreciation component as part of it.  You will need to keep track of your total business miles and all miles on the vehicle to arrive at the business user percentage should you dispose of it before you start up your business again.

It's really simple to add them back when the business is active again. You should print (literally or store a .pdf copy on your computer) to retain all of your records, including all worksheets.  If you have activity in 2024 you can add your business back to your return.

[Brownsfan1]

Thank you very much DianeW777 for your response.  If I understand correctly, although there was no business activity and nothing was sold in 2023 (i.e. I have not made any input entries for business into TurboTax), the Schedule C and related vehicle ownership / use schedules will nonetheless be transmitted to the IRS when e-filing.    

Thank you very much.