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Troubleshooting Lacerte diagnostic ref. 587 - Schedule C is not required when gross income

by Intuit• Updated 1 month ago

For more Schedule C resources, check out our Tax topics page for Schedule C where you'll find answers to the most commonly asked questions.

The following e-file critical diagnostic is generating in Lacerte:

  • Schedule C is not required when gross income, total expenses or net profit/loss are all zero. (ref. #587) 

Follow these steps to clear the diagnostic:

  1. Go to Screen 16, Business Income (Sch. C).
  2. Scroll down to the General Information section.
  3. Enter a 1 in the 1=delete this year, 2=delete next year field field (code 100).
    • The program will ignore this activity and won't generate a Schedule C.

If assets are tied to the activity a separate diagnostic will generate due to the now "missing" activity. Also, if prior year unallowed passive losses are entered for the business activity and a Form 8582, Passive Activity Loss Limitations, is needed for the return, then e-file error check will need to be turned off prior to e-filing.

Follow these steps to turn off e-file error checking:

  1. Go to the Clients tab.
  2. Highlight the applicable client.
  3. From the E-File menu, select e-file Support Tools.
  4. Select Disable e-file Error.
  5. Click OK to confirm that e-file diagnostic error checking has been turned off for this client.
  6. Continue with e-filing the return.
Lacerte Tax 2023

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