Sole Proprietor

[tech77]

My husband started a home inspection business on 12/17/2020. He has no profit or loss to report for 2020 due to not being able to serve customers until he is issued a state certification. Does he still need to file for the business for 2020? I appreciate your help with this question.

[AnnetteB6]

If he had no income and no expenses to report for 2020 and the business is a sole proprietorship, then he does not need to include the Schedule C on the 2020 tax return.  

If he did have expenses that were paid in 2020 to get the business started, he can deduct those as start-up costs on the 2021 tax return.  

[tech77]

Thank you. I just spoke with him and he actually did have the cost of the state registration. Would he need to file an additional 1040 for the business and complete schedule C? or could his business be included in our joint return?

[ToddL99]

Whether he had a state registration or not, any income he had from the home inspection business in 2020 is reported on Schedule C of your joint tax return. He would not file a separate return for his sole-proprietor/self-employed business.

Am I considered self-employed?

The following article provides information on What self-employed expenses can I deduct?

(The technical issue of having a state registration does not impact any tax due on income from the business.)