What if I haven't made a sale yet?

TurboTax Self-Employed online will lead you through the self-employment activities.  The IRS does understand that it sometimes take some time to get your business up and running.  The key is that your business must be open and operating before you begin to include the business expenses on your tax return. If it was open for business in 2021 you should proceed to enter your expenses.

You need to prepare one Schedule C for your business.  This link will help you identify if you have a business or a hobby.

• Business or Hobby

The documents you will need to complete these schedules are:

1. The cost of all supplies purchased to be able to perform your services for your clients
2. Any equipment that was placed in service and has more than a one year estimated life such as a lawn mower must be listed individually with the date of purchase and the cost including any sales tax paid.  The will be listed under assets and each asset must be entered by itself in this section.
   • If you have assets that cost less than $2,500, it's just easier and faster to enter their total cost under the miscellaneous costs. This is a special rule. The de minimis safe harbor is simply an administrative convenience that generally allows you to elect to deduct small-dollar expenditures for the acquisition or production of property that otherwise must be capitalized under the general rules.
3. Start up costs - if you had any expenses before you actually opened for business services such as legal fees, market study or organization fees
   • The IRS allows you to deduct $5,000 in business startup costs and $5,000 in organizational costs, but only if your total startup costs are $50,000 or less
4. If you store any supplies at your home and you do not have a separate business location you may be able to take a home office deduction.
5. Cell phone expense if applicable
   • Where do I enter Schedule C (either to start or to review or change)
   • Do I qualify for the home office deduction?

If you would like to use TurboTax Live your can review the video to show you how it works. Click here for the specific information about TurboTax Live for self-employed.  Once you are signed into your TurboTax account you can click the Live Tax Advice button on the top right.