Self Employed but was on disability from an accident in 2017 for the entire year of 2018

Forum|Forum|7 years ago
January 4, 2019
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I was employed earning a W2 plus I did contract work as self-employed. In 2017 I was in an accident and have been on disability from my employer for the entire year of 2018. My question is since I did not work at all and had no income from my self employed contract work, do I need to file a schedule C or do I just skip it this year? Also even if I do not have to file the Schedule C is it a benefit to me if I do? As I still have my home office and all of the expenses that I usually deduct from my taxes in relation to the home business, but no income from it.

Thank You

Other

Carl11_2

Employee

If you filed a SCH C on your 2017 tax return and did not report your business as sold, closed or otherwise disposed of on that same 2017 return, then as far as the IRS is concerned, you were "open for business" in 2018. Therefore, the IRS is expecting a SCH C from you on your 2018 return. It does not matter if the business produced income or not in 2018. It was "open" in 2018. So you need to file a SCH C with your 2018 return.

Now if you did not incur any deductible business expenses in 2018, then what I would recommend is that you report your business as "closed" on Jan 1, 2018. That will stop the depreciation on any assets, if your business has any depreciable assets. The only catch is, if your business has inventory, then to show the disposition of that inventory you would have to report all of it as "removed for personal use" on the date you close the business. In order to close the business completely and correctly, you have to show the disposition of "everything" - assets, inventory, and any vehicle use by the business. Removing everything from the business "for personal use" will do that. You can always put it back into the business, in the tax year you have business and actually open the business back up.

If you "did" incur deductible business expenses, then your choices are to either keep the business open reporting zero income, or just "suck it" basically and not take the deductions on the 2018 return.