Yes. If you operated a business or practiced your profession as a sole proprietor, report your income and expenses on Schedule C. The expenses have to be reasonable and actually paid by you in order to report these expenses on Schedule C. These expenses are reported in the year paid by you. The IRS generally wants you to be able to prove that you are actively engaging in making a income and profits in this business. Otherwise, the IRS may disallow the losses associated with that business as a hobby.
Limited liability companies (LLCs) are not recognized as an entity in the IRS tax code. Therefore, the above response would not change if you whether you were an LLC or not.
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