Filing taxes with new business

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Topic Author
steffmo
Posts: 6
Joined: Sun Feb 10, 2013 9:11 am

Filing taxes with new business

Post by steffmo »

Hi all,

So I started a business in 2019 and have very minimal revenue, less than $400. I got an EIN so that I could open a Solo 401k and rollover an old rollover IRA. I opened the Solo 401k last month. I'm about to start filing taxes for 2019 (taking full advantage of the extended deadline). My question is, do I just report my business revenue on Schedule C? I assume I have to report some revenue since I opened the solo 401k? This is purely a side gig, no LLC or anything fancy. I purely did it so that I could have business income, open the solo 401k and rollover that IRA so I can start doing a backdoor Roth IRA.

Just want to make sure I file taxes correctly.

Thanks!
pshonore
Posts: 6883
Joined: Sun Jun 28, 2009 2:21 pm

Re: Filing taxes with new business

Post by pshonore »

steffmo wrote: Tue Jun 02, 2020 12:40 pm Hi all,

So I started a business in 2019 and have very minimal revenue, less than $400. I got an EIN so that I could open a Solo 401k and rollover an old rollover IRA. I opened the Solo 401k last month. I'm about to start filing taxes for 2019 (taking full advantage of the extended deadline). My question is, do I just report my business revenue on Schedule C? I assume I have to report some revenue since I opened the solo 401k? This is purely a side gig, no LLC or anything fancy. I purely did it so that I could have business income, open the solo 401k and rollover that IRA so I can start doing a backdoor Roth IRA.

Just want to make sure I file taxes correctly.

Thanks!
You'll also have to report any expenses you incurred. Most businesses have expenses and to report income with no expenses can be a red flag to IRS depending on your business. I'm not saying its impossible to not have expenses but it is unusual.
Topic Author
steffmo
Posts: 6
Joined: Sun Feb 10, 2013 9:11 am

Re: Filing taxes with new business

Post by steffmo »

Good point. Although my only expense is really internet, which isn't solely used for business purposes...
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MP123
Posts: 1671
Joined: Thu Feb 16, 2017 3:32 pm

Re: Filing taxes with new business

Post by MP123 »

Yes, Schedule C is right for your business.

Even though you have less than $400 in income from the business you still need to file a Schedule C, assuming that you have enough other income that would require you to file a 1040 in the first place.
MarkNYC
Posts: 1835
Joined: Mon May 05, 2008 7:58 pm

Re: Filing taxes with new business

Post by MarkNYC »

pshonore wrote: Tue Jun 02, 2020 2:22 pm You'll also have to report any expenses you incurred. Most businesses have expenses and to report income with no expenses can be a red flag to IRS depending on your business. I'm not saying its impossible to not have expenses but it is unusual.
pshonore -- Could you explain your reasoning? I can't think of a reason why the OP's reporting no expenses against Schedule C income of $400 could possibly be a "red flag" to the IRS.
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