Originally Posted by geoffoto
I Would there be tax consequences regarding those deductions?
It depends; I assume that your business entity is a sole proprietorship, then, as you can see, you can deduct the costs of operating your business. These costs are known as business expenses. These are costs you do not have to capitalize or include in the cost of goods sold but can deduct in the current year.To be deductible, your business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be indispensable to be considered necessary.so if you 've been running an unincorporated business by yourself with no employees, reporting your shutdown to the IRS couldn't be easier. Say you?ve been a self-employed photographer for the last several years, filing Sch C each year to report income and expenses.
You work by yourself out of your home and don?t own any business assets. If you closed your business just by stopping operations, there is nothing else to do for your income tax return. However, if you sold the business to someone else, you need to include the transaction on your income tax return.One more, If, like most small business owners, you?re a sole proprietor, you may deduct any loss your business incurs from your other income for the year for example, income from a job, investment income, or your spouse?s income (if you file a joint return). If your business is operated as an LLC, S corporation, or partnership, your share of the business?s losses are passed through the business to your individual return and deducted from your other personal income in the same way as a sole proprietor