Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 01-24-2008, 01:06 PM
Junior Member
 
Join Date: Feb 2007
Posts: 10
How can I take advantage of business losses in my unincorporated business?

I have made losses of about $23,000 in my business that is not a Corporation or an LLC. My spouse has W-2 income in 2007 that is about $45,000.

Is there are way that I can take advantage of these losses in any way if I file married filing jointly?

Thanks.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 01-24-2008, 06:15 PM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,397
Blog Entries: 3
How can I take advantage of business losses in my unincorporated business?

You can definitely take advantages of these losses incurred in your business that is unincorporated. The IRS will as a matter of fact allow you to deduct these losses provided you were actively participating in this business.

Where do you report these losses?
The business activity will be reported on your 1040 Individual Tax Return on Schedule C. The net loss generated from this business however, will flow to your Form 1040 page 1.

What is the Impact of these losses?
Your spouses W-2 income of $45,000 will be reduced by the Schedule C losses of approximately $23,000. Thereby resulting in your AGI of about $22,000 which will be further reduced by your itemized deductions or $10,700 of standard deduction if you do not itemize and a further deduction is allowed for personal exemption of $6,800 ($3,400 per dependent).

Thus, it would appear that you would end with taxable income as low as $4,500, possibly resulting in a federal tax liability as low as $450 due to being in the 10% income bracket.

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning