How does my business losses reduce my personal income? As I enter expenses my federal refund continues to go up even though the business is at a loss.
01865
1 Replies
BMcCalpin
Level 13
Jun 6, 2019 2:03:30 AM
Losses on Schedule C carry to line 12 of the 1040. Therefore, losses from a sole proprietorship (the Schedule C), reduce your AGI (adjust gross income) dollar for dollar, which in turn reduces your tax liability and increases your refund (if any).