Year 2009 is to keep more cash for your business needs, to maintain your business operations and stay in business. I've read this article from CNN today titled "2009: Keep more cash!" I've got some useful informations for me to consider when filing my tax returns. Though just like other entrepreneurs out there, I have many questions to ask.
Profit from losses:
This is getting interesting when I continue to read the article. You can actually recoup some of the money by executing what's called a net operating loss (NOL) carryback. This is the first time I've learned about this specific tax code.
"Here's how the carryback works. Say you lost $1 million in 2008 after turning a $500,000 profit in each of the previous two years. You carry the loss backward by having your accountant amend your 2007 tax return to offset the entire profit for that year. You would then be due a refund on any federal taxes you paid on that profit - and state taxes in roughly a third of the states. You would still show a loss balance of $500,000, which you could carry back to 2006 and offset your profit for that year as well." (2009, CNN)
You can carry a NOL forward to offset profits for up to 20 years.
Though after reading this example computation, I'm still in the dark side figuring how can I apply this to my business? Who's my accountant HR Block? I'm planning to use Turbo Tax this year tax returns. Woow!
Sometimes, I asked myself why I choosed B.S. Computer Engineering and not Accounting or Financial Management. Well that's another story to tell.
Read the full story here.
Profit from losses:
This is getting interesting when I continue to read the article. You can actually recoup some of the money by executing what's called a net operating loss (NOL) carryback. This is the first time I've learned about this specific tax code.
"Here's how the carryback works. Say you lost $1 million in 2008 after turning a $500,000 profit in each of the previous two years. You carry the loss backward by having your accountant amend your 2007 tax return to offset the entire profit for that year. You would then be due a refund on any federal taxes you paid on that profit - and state taxes in roughly a third of the states. You would still show a loss balance of $500,000, which you could carry back to 2006 and offset your profit for that year as well." (2009, CNN)
You can carry a NOL forward to offset profits for up to 20 years.
Though after reading this example computation, I'm still in the dark side figuring how can I apply this to my business? Who's my accountant HR Block? I'm planning to use Turbo Tax this year tax returns. Woow!
Sometimes, I asked myself why I choosed B.S. Computer Engineering and not Accounting or Financial Management. Well that's another story to tell.
Read the full story here.
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