full image - Repost: Closing a small sole prop / no-employee sideline? (from Reddit.com, Closing a small sole prop / no-employee sideline?)
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I'm wondering what I ought to do over the next year or two (taxes-wise) if I want to gracefully wrap up a small-scale sole proprietor software consulting business: just stop, or are there special steps to take?Since 2012 I've operated a profitable consulting/product development business (sometimes as a little sideline, sometimes my main gig), operating out of a dedicated office in my house. I slowed consulting (income) way down in late 2019 as customers and marketing wanted in-person work/meetings that I wouldn't do; but I kept working (slowly) on developing my own product as part of that business, even took in some PPP money based on my continuing plan to keep doing that job. Then various family/medical issues diverted me from that for a while.No business income at all in 2021 or 2022 ... in 2021 all I claimed on Sched C was a business license deduction (my first ever business "loss" year, for $160) and in 2022 I didn't even bother with a Sched C (no income, no expenses beyond the license, and my home-office use fell below 50% business, so the small deductions didn't seem worthwhile to fill out Sched C.)Now I'm getting back to my product dev work, but this hiatus has me thinking about wrapping up if I can finish/sell the idea, in a year or two. And maybe we'd selling our house then (we're both retirement age now). so, what should I do/watch out for with the IRS?I've got computer/networking stuff (a PC, monitor, network switches, etc) that has been for 90% business use, and it's all old now but I'd like to keep it around if I stop dev work, and just use it for personal things. Until 2019 I was depreciating this kind of stuff as MACRS 5-yr property (because that's what some CPA set me up doing before he retired and I started trying to do my own taxes), and it all reached zero. Probably $10K of equipment/software purchased over 2012-2015 so it had all made it to zero by 2019. Then in 2019 I updated a NAS because the vendor stopped supporting my model, and I claimed that and an office network switch as a Sec 179 expense (of $651)I've claimed the simplified housing deduction for the office, mostly the same 111 sq ft, for most years until 2020 - so about %5K business income deductions (never as depreciation of the house, just "home office")Can I just stop, cancel my business license, close my business checking account and keep it all? Or do I need to do something about the old depreciation or Sec 179 expenses? Will I need to do something about the home office deductions if we sell the house?Is this trivial, or should I check in with a CPA?TIA!
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