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If I had a Home Based Business and generated no income but had many expenses, can I file taxes? My expenses consisted of travel, dinner meetings with potential clients, etc. Can I file these deductions/credits even though I did not generate any income?

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    In what country is the business? Jan 24, 2015 at 13:03
  • By "file taxes" I assume you mean "take a tax deduction". You should always file a tax return.
    – Rocky
    Jan 24, 2015 at 16:22
  • @Rocky not necessarily. In the US - there's an income threshold below which you're not required to file a tax return.
    – littleadv
    Jan 24, 2015 at 21:53
  • By "you" I meant OP, not everyone.
    – Rocky
    Jan 25, 2015 at 1:11
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    How do you know what the OP has to do or should do? You don't even know what country he's from.
    – littleadv
    Jan 25, 2015 at 1:17

2 Answers 2

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Assuming the US, if a human assessor audited you, could you show a future profit motive or will they conclude you are expensing a hobby?

If you answer yes, you are likely to only be deducting limited expenses this year, carrying forward losses to your profitable years. See the examples in pub 535: http://www.irs.gov/publications/p535/ch01.html#en_US_2014_publink1000208633

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In the US, you can only take a tax deduction on expenses to the extent that they offset income. For an S corp or LLC, if the business had no income, there's no deduction to take. If you have a sole proprietorship, these expenses can offset other income.

You can also carry-forward net operating losses to future years when you have more income.

See the article How to Carry Over Business Expenses

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    That is not true at all, you can definitely deduct business losses in the US.
    – littleadv
    Jan 24, 2015 at 21:41
  • Still wrong....
    – littleadv
    Jan 25, 2015 at 1:16
  • Enlighten me, please.
    – Rocky
    Jan 25, 2015 at 1:18
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    Hmm... You can deduct LLC/S-Corp business losses, just the same as sole proprietorship. In fact, LLC is disregarded for tax purposes at all, and doesn't matter whatsoever. Here, you're enlightened.
    – littleadv
    Jan 25, 2015 at 1:43
  • not feeling it, but thanks anyway
    – Rocky
    Jan 25, 2015 at 1:46

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