Aditya G asked:
I am going to owe the IRS around $350 this tax year.
I am going to owe the IRS around $350 this tax year.
I have a business, which i couldnt attend to this year and it has $120 in losses and $0 in revenue. Making it a Net Loss of $120.
Out of the $120, $100 was for the business licenses, $20 ebay fee’s.
My question is will i be able to claim this $120 as a deduction on my personal income tax, because i will be filing my business tax with my personal tax.
Collecting Comix
Filed under:
Business
Collecting Comix
As long as this is actually a business that you intend to turn a profit with eventually, yes.
If it’s a hobby then any income goes on the Other Income line of your tax return and expenses (limited to the income claimed) go on Schedule A as a miscellaneous itemized deduction. In this case the best case is a break-even on the income; losses on hobbies are not allowed.
Low Cost Bargain
Assuming it is a legitimate business, you can record the loss on your Schedule C and use it to reduce you AGI, thus reducing your tax burden.
Low Cost Bargain
it is a net loss rather than deduction
ProConsultancy
You may be able to do this, but I wouldn’t do it. Your tax savings would be at most $50 and you would be filing a Schedule C with no income. This will count as a loss year for purposes of determining if you are actually in business.