Question by moneyreligion: Can I claim tax deductions even if my home-based business didn’t make a penny?
Does a business, home-based or not, need to have any sort of income to get the tax deduction advantages?
Answer by onerandomchance
Technically you can still claim the expenses incurred to operate your business but if you had no income at all it’s unlikely that you’ll have much in the way of expenses.
A business does not have to be profitable in order to claim the expenses and the loss from the current year can be used to offset future year earnings and reduce overall taxed payable.
The only thing to keep in mind is a business must have a reasonable expectation of earning a profit.
Also, year over year losses may make your file more likely to be pulled for audit.
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