Comments on: If you invest money into your business and the business loses money, how do the taxes work? http://bestbusinesslive.info/if-you-invest-money-into-your-business-and-the-business-loses-money-how-do-the-taxes-work/100/ Business Info for the Experts Sun, 28 Feb 2010 23:24:34 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: 1040 Agent http://bestbusinesslive.info/if-you-invest-money-into-your-business-and-the-business-loses-money-how-do-the-taxes-work/100/comment-page-1/#comment-155 1040 Agent Mon, 18 Aug 2008 01:56:53 +0000 http://bestbusinesslive.info/if-you-invest-money-into-your-business-and-the-business-loses-money-how-do-the-taxes-work/100/#comment-155 The money you invest in a business is not deductible most of the time. If you purchase assets they are normally depreciable which allows you to expense a portion of your investment. Revenue-Expenses=Profit or Loss. That profit or loss for a sole proprietorship is reported on a Sch C and carries over to the ordinary income section of your 1040. If your business is structured as a partnership more complex forms are filed but the principle remains the same. If you are losing money because your expenses exceed your revenue it is subtracted from any other form or ordinary income you have and the net effect is that it reduces your taxable income and tax. You may need to file a sch. se and report and pay self employment taxes and dont forget to look into the requirement that you may have to make estimated tax payments. A corporation is a totally different entity considered in and of itself for tax purposes. Good Luck with you endeavor. The money you invest in a business is not deductible most of the time. If you purchase assets they are normally depreciable which allows you to expense a portion of your investment. Revenue-Expenses=Profit or Loss. That profit or loss for a sole proprietorship is reported on a Sch C and carries over to the ordinary income section of your 1040. If your business is structured as a partnership more complex forms are filed but the principle remains the same. If you are losing money because your expenses exceed your revenue it is subtracted from any other form or ordinary income you have and the net effect is that it reduces your taxable income and tax. You may need to file a sch. se and report and pay self employment taxes and dont forget to look into the requirement that you may have to make estimated tax payments. A corporation is a totally different entity considered in and of itself for tax purposes. Good Luck with you endeavor.

]]> By: Judy http://bestbusinesslive.info/if-you-invest-money-into-your-business-and-the-business-loses-money-how-do-the-taxes-work/100/comment-page-1/#comment-154 Judy Fri, 15 Aug 2008 15:21:19 +0000 http://bestbusinesslive.info/if-you-invest-money-into-your-business-and-the-business-loses-money-how-do-the-taxes-work/100/#comment-154 Un less your business is incorporated, DBA or not, there is just one return - your business income is shown as part of your personal return. If you have a business loss and have other income also, then if you have a business loss it is netted out on your form 1040 with your other income. Un less your business is incorporated, DBA or not, there is just one return – your business income is shown as part of your personal return.

If you have a business loss and have other income also, then if you have a business loss it is netted out on your form 1040 with your other income.

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