Schedule C does not allow me to enter expenses when there was no income

[rapatton]

I received a 1099 MISC form (line 7) for a reimbursement that is not taxable.  Turbo representative suggested I enter an offsetting expense in Schedule C.  Turbo Tax accepts the expense item, but the federal refund amount does not change once the expense is entered!  What to do?

[VolvoGirl]

Some expenses, such as home office or section 179 depreciation can only be used to reduce your schedule C taxable income to zero, and not to create a loss. Excess deductions for these carry over to the next year.  And you have to answer yes to both questions about exclusive and regular use, not just one.  The area of your home office must be used regularly and exclusively for business to deduct it.

Or you checked the box on 32b saying Some Investment is Not at Risk.

If you have money not at risk you can not take a loss on schedule C. If you don't know what it means then probably All your Investment is at Risk (check Box 32a). It means you are using your own money for the business.  People usually check the wrong box.

[Critter]

Ignore the Refund-O-Meter and LOOK at the actual tax forms ... did the Sch C zero out ?  

You can peek at only  the Federal form 1040 and the summary of the state info by going here:

1) lower- Left side of the screen...click to the left side of the "Tax Tools" text selection.
2)  then select "Tools"
3) then select "View Tax Summary" from the pop-up
4) then back to the left-side and "Preview 1040"

Then hit the "Back" on the left side to get back to your tax entries.

To view your entire return using the online editions (including the state) before you file, you will need to pay for your online account.

To pay the TurboTax online account fees by credit card, without completing the 2019 return at this time, click on Tax Tools >>> Tools  and then Print Center.  Then click on Print, save or preview this year's return.  On the next page, to pay by credit card, click Continue.  On the next screen it will ask if you want Audit Defense, if you do not want this option just click on the Continue button.  The next screen will ask for all your credit card information so you can pay for the account.

           

 

[Carl]

I received a 1099 MISC form (line 7) for a reimbursement that is not taxable. Turbo representative suggested I enter an offsetting expense in Schedule C

TurboTax may be flat out wrong. Starting with the 2018 tax year, jopb related expenses incurred for a W-2 job are no longer deductible. Period. For your W-2 employer to report the reimbursement to you on a 1099-MISC *may* be wrong and *may* be considered fraudulent reporting. So exactly who reimbursed you, and what were you reimbursed for?

There are other ways to do this that won't raise flags with the IRS *if* you qualify. But filing a SCH C and essentially opening a business and closing it the same year with only once single source of income, could be an IRS flag raiser.