Could anyone give me some very high level tax advice on a business loss?

[youngtrep]

Hey guys, tax time is coming up and I could use a little bit of advice. I am planning to speak to an accountant but that is easier said than done this time of year. I had very little income last year as I was in the process of starting what has essentially been a failure of an app business. Total expenditure/losses on the business was in the neighborhood of $15k. I am now in the process of launching another venture and for the time being leaving the failed business behind. Filing my Federal and state w2's from my other work is a straightforward process and I should get back everything that was withheld, but I am wondering what to do regarding that $15,000 loss from the failed LLC. Can I carry that loss forward and deduct it from future earnings from a different LLC? Do I need to note that loss on my tax filing this year? Any advice would be very much appreciated. I am probably going to file for an extension if I can't get this sorted out quickly.

Thanks

 

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[Trivium iz rC]

Before I write my post I just want to say. I AM NOT a CPA or Tax attorney and you should talk to registered professionals in your state regarding taxes.

What is your tax election on your LLC (Sole Proprietor, S-Corp, C-Corp)? <- The answer depends on what you elected. But I'm going to guess that you just defaulted and your a sole proprietor.


It would be called an "Business Operating Loss" and you would be able to put it on your annual return. Your business loss can be used to offset other income as in (A job, other business ventures). But it won't be able to reduce your taxable income below zero. In which case yes you can carry that BOL (Business Operating Loss) To future or previous years. I'm pretty sure you can ammend the past 2 years, assuming you paid tax or had income in those past two years. If there's still losses after you use the previous two years. You can carry the business losses for up to twenty years.



GL

Kosta-B

 

[The-J]

Call a CPA. It's March 31st, you don't have a lot of time left.

 

[Kak]

@Kosta-B Awesome advice rep+++++

 

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[youngtrep]

Before I write my post I just want to say. I AM NOT a CPA or Tax attorney and you should talk to registered professionals in your state regarding taxes.

What is your tax election on your LLC (Sole Proprietor, S-Corp, C-Corp)? <- The answer depends on what you elected. But I'm going to guess that you just defaulted and your a sole proprietor.


It would be called an "Business Operating Loss" and you would be able to put it on your annual return. Your business loss can be used to offset other income as in (A job, other business ventures). But it won't be able to reduce your taxable income below zero. In which case yes you can carry that BOL (Business Operating Loss) To future or previous years. I'm pretty sure you can ammend the past 2 years, assuming you paid tax or had income in those past two years. If there's still losses after you use the previous two years. You can carry the business losses for up to twenty years.



GL

Kosta-B

Thank you so much for this. I am contacting a CPA tomorrow to schedule an appointment but this makes things a lot clearer.

 

[1step]

Another thing that you should ask about is amortization, I was also advised some things (such as web development) would have to be spread over multiple years. Not sure if that would be your case here..

 

[youngtrep]

I lucked out and got an appointment tonight so I will make sure everything is done right and clears the way for my new venture.

 

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[Trivium iz rC]

@Kosta-B Awesome advice rep+++++

Thanks!

Thank you so much for this. I am contacting a CPA tomorrow to schedule an appointment but this makes things a lot clearer.

Best of wishes! Don't be afraid of our US tax system, You'll soon find by talking to your CPA that the tax system IS ALWAYS written entrepreneur's favor. You just have to be willing enough to learn about it.