Question

I started a new business in 2020 but haven't made any sales yet. How do I claim zero on income?

Forum|Forum|5 years ago
May 1, 2021
2 replies
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TurboTax Self Employed Online

If you didn't have any income and didn't have any expenses, you probably don't have to report anything on your individual tax return.

(Depending on where you live, where the business is organized and how the business is organized (e.g. S-Corp, Partnership), you may have a state filing requirement).

For self-employed businesses, if you had expenses but no income, enter the information in the Business Income and Expenses interview of TurboTax Self-Employed. Just leave the income fields empty.

P

PivotTT2021

I am a sole owner of an LLC company and i had spent my personal money to fix my family. cars, paid mortgages, purchase gas and maintain my house where my office is located. Can i declare all these as expenses on my 1040 Schedule C. The expenses came out of my savings because i did not make any income in 2020.

I want to file for 1040 Schedule C, is it okay for me to declare all. these expenses even though i spent from my savings - my personal family bank account but i used the cars and the house to run my business but didn't make any income in 2020.

ColeenD3

If you have income, you can take a home office deduction. No personal deductions are allowed. You will need to prorate the square footage of the office in relation to the entire house. Mortgage interest, property taxes, etc are prorated according to that percentage.

The deduction is limited to your income. You can't generate a loss with a home office.

Carl11_2

Employee

If your business is a sole proprietorship or single member LLC, all income/expenses gets reported on SCH C as a part of your personal 1040 tax return. If you were not officially "open for business" on or before Dec 31 of the tax year, then you have nothing to report for that tax year. Period.

If you incurred any start up expenses in 2020, then you will not claim those startup expenses on the SCH C until the first year you are officially open for business. It does not matter in what year those startup expenses were incurred either. See IRS Publication 535 Chapter 8 at https://www.irs.gov/pub/irs-pdf/p535.pdf#en_US_2020_publink1000208934 for details.