Expenses deduction without a license

[Cookie10]

Hello!

My husband recently started a wood carving business. Does he have to obtain a business license? Can he deduct any expenses (like studio rental, tools, transportation) without it if his income is still 0? 
Thank you! We live in California.

[Critter-3]

A business license is a state situation which doesn't have any bearing on what you can or cannot report on a Sch C for a sole prop.   Check your state's website for the business license requirements. 

[Carl]

Licensing of a business is at the state level or lower. The IRS really doesn't care. The only thing the IRS is concerned with, is that you report the income.

For example, in my state the county I'm in requires me to have an "occupational license" to operate a sole proprietor business. If I don't have one, then I'm in violation of a county ordnance. The IRS could care less about that, so long as I report all my business income to them on SCH C.

[AmeliesUncle]

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@Critter-3 wrote:

A business license is a state situation which doesn't have any bearing on what you can or cannot report on a Sch C for a sole prop.   

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For future readers ... yes, except for home daycare providers.  Home daycare providers are required to meet state licensing rules (which in some cases might not require a license) in order to deduct their Home Office expenses.