2007-01-16 07:18:29 · 6 answers · asked by Christina C 2 in Business & Finance ➔ Small Business
In most cases yes, but keep those receipts and be prepared for an audit. The IRS loves auditing people who use Schedule C to claim more losses than income.
As a general guideline, in order to claim a deduction from you have to prove that you had an INTENT to earn a profit. This keeps hobbyists (who never intend to make money) from claiming deductions on taxes.
For guidelines on how you can prove that you intended to earn a profit, read the following:
http://articles.moneycentral.msn.com/Taxes/TaxShelters/TheUltimateTaxShelterYourOwnBusiness.aspx
If you are audited, they will check all of your income, your receipts, possibly search for cash customers, and question your profit motive.
2007-01-16 07:44:50 · answer #1 · answered by great_and_mighty_adam_levine 4 · 0⤊ 0⤋
Yes....your tax preparer will file a Schedule C and list all expenses related to your business. (Proper records should have been kept for the entire time buisness was operated in case you are audited.)
If your expenses equal more than your income you will show a net loss from business income. This amount is transferred from the Schedule C to your Form 1040.
2007-01-16 15:27:50 · answer #2 · answered by Weetie 3 · 0⤊ 0⤋
Yes, if they are valid. Line 20 on the 1040A form. the IRS has an AWESOME website, by the way. You can find answers to almost any question www.irs.gov
2007-01-16 15:31:35 · answer #3 · answered by Carolyn R 3 · 0⤊ 0⤋
I would think so. To find out what are deductable expenses, contact your tax preparer.
2007-01-16 15:29:19 · answer #4 · answered by badbill1941 6 · 0⤊ 0⤋
If they are valid busines expenses, then yes.
2007-01-16 15:21:46 · answer #5 · answered by jseah114 6 · 1⤊ 0⤋
On your taxes? I believe this would decrease your net income.
2007-01-16 15:21:49 · answer #6 · answered by Phoenix, Wise Guru 7 · 1⤊ 1⤋