Tax reform provided some real benefits for small-business owners.
But the changes lawmakers made to the net operating loss (NOL) deduction rules can take a lot of money from your pocket.
You see, before tax reform you could carry back the NOL to prior tax years and get refunds of taxes paid in those years. Or, you could have elected to wave the NOL carryback and, instead, carry forward the NOL (to offset some or all of your taxable income in future years).
Not any more.
After tax reform, you can no longer carry back the NOL (except for certain farming losses). And, your NOL carryforward can offset only up to 80-percent of your taxable income in a tax year.
That’s where the Tax Reduction Letter comes to the rescue.
Here’s some good news. In our new issue, we’ll explain five proactive strategies that let you use your business losses in the current tax year and avoid the limits that the new NOL rules impose.
Five Strategies for Your Business Loss after Tax Reform
Strategy #1: Use a Roth IRA conversion. When you do, you can use your loss to offset the income that you had to include because of the Roth IRA conversion. For details read the full after-tax-reform article.
Strategy #2: Purge your traditional IRA If you have a traditional IRA to which you have made non-deductible contributions, instead of converting it to a Roth IRA, you can withdraw the IRA monies and use your business loss to make the distribution tax-free to you! For details read the full after-tax-reform article.
Strategy #3: Purge gains from property. Sell your appreciated assets and recognize the gain. You use the business loss to offset the taxable gains. For details read the full after-tax-reform article.
Strategy #4: Accelerate income. Collect the taxable cash now and pay the deductible expenses next year. We’ll tell you five ways to speed up the collection of taxable income. For details read the full after-tax-reform article.
Strategy #5: Fix depreciation errors not in your favor. Using this perfectly legal strategy can save you thousands of dollars in taxes. Don’t miss it! Read the full article.