After being self-employed for years, I took a staff job in 2018 but still work from home. Should I consider my own business "closed" even if it's just on hiatus for now?

[dstover]

I understand that, under the new tax law for 2018, I cannot deduct any expenses for the cost of operating a home office at the convenience of my employer. I probably can't deduct any home office expenses for my own business either, because I no longer use my home office "regularly and exclusively" for that business.

I have no significant income or expenses to report from my self-employed business in 2018, but I am reluctant to call it "closed" because I might have income and/or expenses for the business in future years. And what about the vehicle that I used while self-employed? As with the business itself, I don't really consider my vehicle "no longer in service" because I might use it for my business again in future years. (I am currently using it exclusively for personal use.)

I should mention that my spouse continues to be self-employed, operating her own (separate) business from home. So we will file a Schedule C and home office expenses for her.

My employment began on January 1, so I guess I don't need to file a Schedule C for 2018? Or should I continue to file a Schedule C as long as my business is still technically open, but with no reported income or expenses for this year?

[Cindy0H]

You can continue to file Schedule C for your business even without income. It will make it easier when you do have business in 2019. Do go through the expenses to make sure you aren't taking any that you did not have such as vehicle and home office.

You can deduct expenses as long as you can prove that you opened or were in business in the year expenses were incurred. To be deductible, a business expense must be both ordinary and necessary. Please note that if you do not have profit for three out of five years, IRS might question your profit motive.

If you have other questions about this, ask in the comment section below.