Lack of income, or business loss?
Hello, and thanks for fielding these questions.
My husband is an independent contractor, specifically a software designer. He has been working on a project for over a year that we hoped would pay off, but ultimately the client pulled the plug. Not only has he made next to nothing, but we used all of our savings and maxed out credit cards to sustain us through that time.
We sold off our rental property (a previous residence of ours) to pay the credit cards off, but obviously we still incurred considerable loss.
Can this loss of savings and the money we incurred and then paid back in credit card debt count as business losses, or is it merely lack of income? We will hire a CPA if we need to itemize it as losses, but if that's not the case our taxes are simple enough to do on our own.