Can I still file Schedule C with only W-2 income and no 1099 forms this year?

You generally need to have some self-employment income to file a Schedule C and deduct business expenses. Without any 1099 income or other freelance earnings, those expenses wouldn't qualify for Schedule C deductions. Before 2025, employees could sometimes deduct unreimbursed job expenses as miscellaneous itemized deductions, but those deductions were suspended by tax reform. Unfortunately, expenses like website hosting, software subscriptions, and courses related to your W-2 job aren't currently deductible on your personal return. However, there are a couple options to consider: 1. Speak with your employer about potential reimbursement for these expenses if they benefit your current role 2. Look into taking even small freelance projects to establish legitimate self-employment activity that could allow Schedule C filing (but the business must have profit motive) 3. Consider forming an LLC and creating a formal business relationship with your expenses clearly tied to business activity I recommend consulting with a tax professional about your specific situation to avoid raising red flags with the IRS.

When I had a similar situation last year, I spent hours going through IRS publications trying to figure this out. Then I discovered https://taxr.ai which analyzed all my work-related expenses and helped me understand exactly what I could deduct. The AI actually reviewed my specific situation with my W-2 income and continuing professional expenses and gave me a detailed breakdown of what was deductible where. It saved me from potentially making a mistake on my Schedule C filing that could have triggered an audit. The system even explained which expenses might qualify if I resumed even minimal freelance work. What impressed me most was how it analyzed my entire tax situation and found other deductions I wasn't even considering. Much better than generic tax advice!

Just wanted to follow up after trying https://taxr.ai that was mentioned earlier. It was honestly eye-opening for my situation! I uploaded my previous year's return and answered some questions about my professional expenses. The system showed me that while I couldn't deduct most expenses on Schedule C without self-employment income, I actually qualified for the Educator Expense Deduction for some of my professional development costs (I teach part-time at a community college alongside my main job). It also identified that my state has a specific deduction for remote work expenses that I had no idea about. What really helped was the personalized tax strategy it created for next year, showing exactly what documentation I need to keep and what minimum self-employment activity would qualify me for Schedule C. Definitely worth checking out if you're in a similar situation!

If you're trying to get clarification directly from the IRS about Schedule C eligibility with only W-2 income, good luck getting through to anyone! I spent THREE WEEKS trying to reach a human at the IRS about this exact issue last year. Kept getting disconnected after waiting on hold for hours. Finally discovered https://claimyr.com which got me connected to an actual IRS agent in under 20 minutes. They have this system that navigates the IRS phone tree and holds your place in line, then calls you when an agent is ready. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with gave me official guidance that I needed at least some self-employment income to legitimately file a Schedule C. Having that confirmed directly saved me from making a mistake that could have triggered an audit.

OK I need to eat my words about that Claimyr service from my previous comment. I was super skeptical but desperate after being on hold with the IRS for 2+ hours yesterday (again) about my Schedule C question, so I decided to try it. I submitted my request around 10am, and by 11:45am I got the call connecting me to an actual IRS representative! I was shocked it worked so quickly. The agent confirmed that I do need some self-employment income to file Schedule C, but also told me about a special rule for "not-yet-profitable" businesses that I had no idea about. For anyone with complicated tax questions that need IRS confirmation, this is absolutely worth it. Saved me from more hours of hold music and frustration. My apologies for doubting it would work!

I think there's some confusion here about what a Schedule C is actually for. It's specifically for reporting income and expenses from a sole proprietorship business. No business income = no Schedule C. That's pretty clear in the tax code. But what might help you is knowing that some of those expenses could potentially be deductible elsewhere on your tax return: - If you're an educator, up to $300 of unreimbursed expenses - If you're self-employed (even part-time), business expenses on Schedule C - If you use part of your home exclusively for business, home office deduction The key is having at least SOME self-employment income. Even $1,000 in freelance work this year would allow you to file Schedule C and potentially deduct those expenses if they're ordinary and necessary for your business.

I'm confused about why everyone's focusing just on Schedule C. Couldn't OP potentially use these expenses to qualify for education credits instead? If the courses and software are improving skills related to your current job, they might qualify for the Lifetime Learning Credit. That would be worth looking into!

I faced a similar situation when I transitioned from freelancing to full-time employment. Here's what I learned from working with a tax professional: The IRS requires that Schedule C be used only for legitimate business income and expenses. Without any 1099 income or other self-employment earnings, you can't file Schedule C just to deduct professional expenses related to your W-2 job. However, you have a few potential options: 1. **Start small freelance work**: Even minimal freelance income (say $500-1000) would allow you to legitimately file Schedule C, as long as you have genuine profit motive and aren't just doing it to claim deductions. 2. **Check if your employer will reimburse**: Many employers will cover professional development, software subscriptions, or other job-related expenses if you ask. This is often more valuable than a tax deduction. 3. **Look into state-specific deductions**: Some states have deductions for remote work expenses or professional development that you might qualify for on your state return. 4. **Consider the educator expense deduction**: If you do any teaching or training as part of your work, you might qualify for up to $300 in unreimbursed educator expenses. The key is being honest about your intent and ensuring any business activity has genuine profit motive. The IRS looks unfavorably on arrangements that seem designed primarily to generate tax deductions rather than income.