Schedle C full year during covid?

Forum|Forum|5 years ago
February 19, 2021
6 replies
30 views

What is everyone doing about their self-employed clients who couldn't work due to quarantine? If someone who sees clients in their home only had income from January to March last year do they still get the full year of home office, heath insurance and other deductions since they were technically still in business but were forced to not see clients? Does it make a difference if they began collecting unemployment in April? Does that mean that they were officially not doing business? Obviously someone with a storefront would still be deducting all of their expenses for the entire year.

ProSeries Professional

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Terry53029

Intuit Community Champion

See the instructions for form 7202 at this link:

https://www.irs.gov/pub/irs-pdf/i7202.pdf

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TaxGuyBill

@BeckerMgt wrote:

What is everyone doing about their self-employed clients who couldn't work due to quarantine? If someone who sees clients in their home only had income from January to March last year do they still get the full year of home office, heath insurance and other deductions since they were technically still in business but were forced to not see clients?

Quarantine did not last 9 months, and I'm not aware of anywhere that 'forced' 9 months of not doing business. At first glance, it sounds like your client CHOSE not to continue their business after March, in which case no, those expenses would not be deductible for the rest of the year.

If you think that does not apply, then you need to explain why the client did not work for all of that time.

BobKamman

Level 15

@TaxGuyBill "Quarantine did not last 9 months"

Mandated business closures did not last 9 months, at least in most places. But doctors and scientists did not advise the public to resume close contact with anyone outside the household. Unemployment was still available to people who were trying to find work -- in fact, that's one of the requirements of state programs -- or were earning less than specific amounts. The goal posts kept being moved. In April, many people thought it would be over by May or June; in September, many expected it to end by Thanksgiving, or at least well before Christmas.

Expenses continued. Self-employed did not abandon their business. You have to look at the facts and circumstances of each case, but try to avoid the compulsion to play the role of IRS auditor.

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BeckerMgtAuthor

Level 3

Yes, when I said "forced not to see clients" I meant both by the government mandated quarantine but also just by it being not safe to have large groups of clients coming into your home office all year. You want to work but it's just not safe and as a business you still have expenses all year.

Just-Lisa-Now-

Intuit Community Champion

cant have sick pay and unemployment for the same time period.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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