Tuesday, Mar. 24, 2009
Put Old Tax Returns to Use
Your money-losing small business is worth plenty. If you're a shop owner or a consultant, or have freelance income or run some other small business — and took it on the chin last year as the economy tanked — you can use your losses to offset profits that were earned as far back as 2003. Previously, small-business owners could only "look back" two years to file an amended return. Now you can apply last year's losses to profits earned during any two of the past five years. "There is a risk," says Michael Schulman, an accountant in Central Valley, N.Y. "The old returns become eligible for an IRS audit." But if that doesn't bother you — and of course, it shouldn't — it sure beats waiting for future profits that may be slow to come.