I have a business where I sell a lot one year and nothing the next. But my expenses to promote take place every year, even those few years where I have no income. Can I deduct business expenses in those years when I have no income?
You'll need to sign in or create an account to connect with an expert.
Partnerships and Corporations MUST file a Tax Return even if there is no income.
If you a Sole Proprietor, Schedule C, you may benefit filing a Tax Return even though you had no income.
What is important is to show is that you were actually engaged in the business activity.
https://www.irs.gov/faqs/small-business-self-employed-other-business/entities/entities-4
Yes, you can claim your eligible expenses when they occur to support your business, even if you do not have income that year. But you have to be careful, as if you will have losses in more than 2 out of 5 consecutive years - you business could be classified as a hobby. Of course, there are a lot of other factors that could classify your business as for profit, except income.
If your business claims a net loss for too many years, or fails to meet other requirements, the IRS may classify it as a hobby, which would prevent you from claiming a loss related to the business. If the IRS classifies your business as a hobby, you'll have to prove that you had a valid profit motive if you want to claim those deductions.
Please see useful link:
https://www.irs.gov/newsroom/know-the-difference-between-a-hobby-and-a-business
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
wormie
New Member
matt_wheelerq72
New Member
madudley60
New Member
megsrocky84
New Member
Mcb050032
Level 2
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.