Question

Consulting business did not generate revenue this year, can I still deduct expenses?

Forum|Forum|3 years ago
April 7, 2023
1 reply
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In addition to a W2 job, I've run a small consulting business for years where I'm paid as a 1099 contractor. This year I did not have any clients, however, I still incurred expenses related to new business development like website costs, diligence expenses, travel to meet with potential clients and the like. Am I still able to deduct these expenses without generating revenue?

Not A Product Question

T

ThomasM125

As long as you were actively soliciting sales and have a profit motive for your business, then you can deduct business expenses on your tax return. However, it may represent an audit flag so you should maintain sufficient documentation to support how you were actively solicing business in case you get audited.

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