Business expenses and standard deduction

[Mike92ct]

2022 I started a small business as a sole proprietor.  As I am getting going with start up costs, equipment, ect  I currently have a $5,000 loss. 

in my 12 years of taxes (im 30) I always took the standard deduction with my wife. Never needed to itemize.  never got close to the 24K or whatever it is. 

I saw a similar question asking "why bother with business expenses if I wont meet the standard deduction" and many responses were they have nothing to do with business losses/expenses. 

So, as an example, if I file jointly with my wife (who will make 70K w2), can we still claims the standard deduction  AND further reduce HER tax liability by my $5,000 loss?

This then leads me to my next question. December 28th 2021 I purchased some more start up equipment that was never claimed. It was $12K.  Is there any way to roll that unclaimed expense to this year to further her taxes more, or should I amend and claim the 12K loss on last years taxes separate. 

[VolvoGirl]

Don't confuse itemized deductions on schedule A with your business expenses/deductions on schedule C. They are separate. For Schedule A personal deductions, you get to take your itemized deductions or the standard deduction, whichever is larger.  Itemized deductions are things like Medical, Gifts to Charity, State Income Taxes Paid, Mortgage Interest, Property Taxes, Car Registration fees, etc.

You get to take both,  your business expenses AND the Standard Deduction (or your personal Itemized Deductions).  And you have to enter your business expenses.  Be aware, if you have self employment income you can get in trouble for not reporting all your expenses to qualify for the EIC.

So yes on a Joint return your Schedule C loss will be deducted from your total joint income.  And you still get the Standard Deduction.  For 2022 the Standard Deduction is 25,900 plus 1,400 for each spouse 65+.

[Carl]

Maybe this will help further clarify.

Business expenses are itemized as such on SCH C. You don't have much of a choice in that matter, as the IRS requires you to claim all of your business expenses.

Other non-business costs such as medical, property taxes, mortgage interest, etc. are a SCH A itimized deductions.

It doesn't matter if you take the standard deduction or if higher, your SCH A itemized deductions. Your business expenses are still fully deductible as such, on the SCH C.

Also, don't confuse business expenses with business start-up expenses. While both are claimed on the SCH C, they're reported differently.