I have been reporting Self Employed income and paying taxes for about five years, but I have zero income in 2021. Can I still file a self employed tax return and deduct my business expenses, liability and healthcare insurance? Thanks
Hello Fewdevil,
Yes, you can still file a schedule C and deduct the expenses. You just need to make sure you are still running it as a business and the IRS doesn't consider it hobby income.
The IRS safe harbor rule is that if you have turned a profit in at least three of five consecutive years, the IRS will presume that you are engaged in it for profit and it is a business.
Here is a link on how the IRS classifies hobby income versus business
Hello Fewdevil,
Yes, you can still file a schedule C and deduct the expenses. You just need to make sure you are still running it as a business and the IRS doesn't consider it hobby income.
The IRS safe harbor rule is that if you have turned a profit in at least three of five consecutive years, the IRS will presume that you are engaged in it for profit and it is a business.
Here is a link on how the IRS classifies hobby income versus business