How to tell turbotax my spouse is no longer self employed

[william-orejudos]

For several years up to 2022 my wife had a small sole proprietorship business as a web designer. She closed this down in 2022 and did not earn any self-employed income in 2023. How do I tell TurboTax this? I am using Premier. Because Turbotax thinks she is self-employed, it is calculating a non-zero QBI deduction based on qualified REIT dividends reported on our 1099-DIV. I tried just deleting schedule C from the forms but this did not zero out the QBI deduction

[maglib]

@william-orejudos  You can't just delete Schedule C without reporting a disposition of the business to the IRS.  TT will walk you through the process.  The IRS always wants a last return with disposition filed. More details can be found here: 

https://turbotax.intuit.com/tax-tips/small-business-taxes/closing-a-business/L3pbEl8of

[KrisD15]

REIT dividends get the Qualified Business Deduction.

It has nothing to do with Schedule C. 

According to the IRS:

“ The deduction allows eligible taxpayers to deduct up to 20 percent of their QBI, plus 20 percent of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income.”

@william-orejudos 

[william-orejudos]

ok, thanks.

I just found where I can report the business as closed. So it looks like a schedule C still gets created, just with a bunch of 0's filled in. Hopefully next year the schedule C will not get generated since I reported the business as closed this year.

For the Qualified Business deduction - thanks for that link. I was confused by the fact it is called "business" deduction but I agree the IRS language is very clear that REIT dividends get the deduction regardless of whether we own a business.

Thanks again!

[maglib · Accepted solution]

Glad it worked out, yes once business is closed, There would be no schedule C in the future for it. Please mark the answer to close your question so you will not longer get follow up emails on it.

Allso if there was a disposition of any assets the business had, even if $0, you must show them disposed or they will continue to depreciate and show a sched c.