I am a full-time employee that does consulting on the side. I am confused about filing schedule C when I have not have a business contract in that year. What flags will come up for the IRS if I am taking losses in those years, if any? What can I do to avoid any confusion with IRS and still maintain my consulting business?
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Change to S crop -
Or perhaps
row-crop.Originally posted by Unregistered
Seriously though, my consulting comrade; do you really have to file? If you had no other income (pore feller) and had no income whatever, or at least the contracts netted under 400 bucks, then why do anything? Whaddaya takin' losses against? More dope, please.
Can't see any red flags comin' up from the comatose IRS unless you get out and wave semaphore flags at them and shout "Hey, look at ME!" I vote to avoid confusion by doing nothing at all.
P.S. What's a consultant get nowadays? I may want to give out my unlearned advice for a price if there's any dough in it (is it necessary to wear French cuffs and a tie?).
Best regards, BBComment
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File with losses
I had a client that started a business in 2004, a floor cleaning business. 2004 was just getting started but had bought a truck and equipment and some supplies and advertising.
When he came in to do 2005, he had a W-2. He told me he hadn't been able to get any work cleaning floors and had to take another job. So I just filed an EZ for him. He called IRS and talked to them.
He was told he had to file his business even if he had no income. They said if he kept his business license and had expenses, he should still file and show his losses. I explained that the reason I didn't include it was that I didn't want to raise a red flag because he has 2 years with absolutely no income.
But IRS said until he says business is closed he should file the Schedule C. So I amended his return and in explanation said that he had been advised by IRS agent to file Schedule C.
So using this example this client should file his Schedule C and report losses.
Linda FComment
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