Can you deduct business expenses without a license?

[mandmsmith1016]

My husband received a 1099-misc for fixing trucks for a commercial business. We would like to be able to deduct the parts that are part of this income but it won't allow us unless we upgrade to the business addition. My husband does not hold a business license so I'm not sure if that would work?

[mandmsmith1016]

I am trying to add that we gave some of the money back. Everytime I fill this portion out and press continue it does not keep the money value.

[ChelsiE2]

Sorry, I'm not understanding what you are saying?  You gave some of the money back that has been reported to you on Form 1099-MISC?

[ChelsiE2 · Accepted solution]

You should file a Schedule C.  You do not need to have a business license to file a Schedule C.  If your husband has made income that has been reported to him on a Form 1099-MISC and this income is in his typical line of work, this income will be subject to Self Employment Taxes (15.3%) in addition to being taxed at your Federal Tax Rate.  

If you deduct the expenses related to this income via a Schedule C, every dollar you add of expense will be one less dollar of income that is subject to the Self Employment Tax and the Federal Income Tax.  

For more information on the Schedule C:

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