Business expenses deduction with no income

myn7055

I had a W2 job for the first half of 2024 and my W-2 income was $100k. I left my job and started working as a self-employed contractor in December, 2024. I will receive the payment for my December's work in January, 2025. So, I have no self-employed income for 2024, but have some business expenses incurred in December 2024. Can I claim business expenses on my 2024 tax return, even if the business produced no income? Since the business is at $0 of income, but my W-2 income is $100k, I am hoping this loss will reduce my W-2 taxable income.

CoryF

The IRS does allow for businesses to claim losses on any given tax return. Typically, starting a business can report a loss showing all business expenses in the first year. The IRS allows up to three years of business losses before determining if your activity could be a hobby, where losses are not deductible. Please read through this article for more reference.

Business losses will reduce your Wages as part of your Adjusted Gross Income on your tax return.