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June 4, 2019
Question

I own a small business and lost money for 2018 and I worked 2000 hours with recieving any income. How can I deduct this?

  • June 4, 2019
  • 2 replies
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    2 replies

    VolvoGirl
    Employee
    June 4, 2019

    You can deduct the net loss on schedule C.  But you can't deduct your own time.  As a sole proprietor, you are not an employee of the business. 

    Sole proprietors cannot take a withdrawal or salary and include it as an expense on their tax return. You don't pay yourself or enter a salary or withdrawal for yourself. All the business income and expenses are your personal income and expenses in the first place. You just fill out a Schedule C. The net profit or loss is your income.  If you have a net profit of $400 or more on schedule C you will pay SE self employment tax on it in addition to your regular income tax. It's all included on your personal 1040 form.  


    Employee
    June 4, 2019

    You will report your income and expenses on Schedule C Profit or Loss From Business.  Self-employed individuals can not deduct a cost for the hours that they devote to their business operations.