Question by lizzieRN13: Tax question for home business?
I own a home based business of which I profited less than $ 5000 this past year. I had some loss from deductions. 2005 I profited $ 13,000 (so I claimed my income and itemized my deductions)…my question is I was told that if I make less than $ 5000, I can’t itemize my deductions…is this true, do I not claim anything from my business this year?
Answer by Judy
Itemizing deductions is a totally separate issue from claiming business expenses. Even if your profit is under $ 5000, you still have to file a return and show the amounts.
For your home business, you’ll fill out a schedule C or C-EZ. You’d list any deductible business expenses there, even if they are only $ 1. This will reduce your income from your business.
Itemizing deductions is done on schedule A. These are personal expenses, and since if you’re single you get a standard deduction of $ 5150 without listing anything or filling out the schedule, you’d just take the standard deduction if your itemized deductions are less than the standard.
What do you think? Answer below!