Did you report to the IRS on your 2015 tax return that your business was sold, closed or otherwise disposed of? If you did not, then the IRS is expecting a SCH C from you for 2016. If they don't get one and they're expecting it, then it will come back to bite you about 24-36 months after you file a return without it.
If you had in fact, reported your business sale, closure or other disposition on the 2015 tax return in it's entirety, then you would have been given the choice of what flavor of TurboTax to start with on your 2016 return. Your business is not sold, closed or disposed of until you have done all of the following:
You need to report your
business as "sold or otherwise disposed of".
Start working through your
business "as if" you still own it. On the 2nd or 3rd screen in select
the option for "I sold, closed or otherwise disposed of this business in 2016".
If prompted for the date, enter the day after you last day of business in 2016.
If your business had no
income in the tax year, you can not leave the business income section blank.
You 'must' enter a digit, even if that digit is a ZERO.
If you had no business
expenses, then you can leave that blank and don't even have to work that
section through, if you don't want to.
If your business carried an
inventory, the end of year (EOY) inventory must be zero. If it's not, then in
the COGS section indicate that you removed all of the remaining inventory for
personal use. that effectively makes your EOY inventory balance, zero.
If your business had
assets, then you must show the disposition of those assets. In the Business
Assets section work through each individual asset on at a time, and select YES
on the screen, "DId you stop using this asset in 2016?". Then on the
next screen, "Special Handling Required?" if you sold the asset,
select no and you will be prompted for your sales information on that specific
asset. If you did NOT sell the asset, click the YES button. You must do this
for each individual asset listed, even if it's already fully depreciated.
If you claimed any vehicle
expenses in your business at any time from the day you opened your business, then
you must most show the disposition of that vehicle. Work through the Business
Vehicle Expenses section and indicate that you stopped using that asset in the
business, when prompted. Then show your disposition of that vehicle. Most
likely, you'll indicate that it was removed for personal use.
Once you have done all the
above, that will make the 2016 tax year the last year you will file a SCH C for
this specific business.
