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Level 1

Are you able to use Section 179 Depreciation deduction if your business had a loss?

 
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Level 12

Are you able to use Section 179 Depreciation deduction if your business had a loss?

Sort of.  It depends.

Yes, you can claim Section 179.  However, whether or not you can use the loss in the current year or if the Section 179 is carried to next year depends on the circumstances.

If the business is a Partnership or Corporation, you can not use a loss with Section 179.  If you claim Section 179, it will be carried to the next year.

If the business is a Sole Proprietorship (Schedule C or Schedule F on your personal tax return), claiming Section 179 will be allowed IF there is other 'earned income' on the tax return (such as W-2 wages).  If there is not enough 'earned income' for the Section 179 to offset, it will be carried to the next year.

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Level 12

Are you able to use Section 179 Depreciation deduction if your business had a loss?

Sort of.  It depends.

Yes, you can claim Section 179.  However, whether or not you can use the loss in the current year or if the Section 179 is carried to next year depends on the circumstances.

If the business is a Partnership or Corporation, you can not use a loss with Section 179.  If you claim Section 179, it will be carried to the next year.

If the business is a Sole Proprietorship (Schedule C or Schedule F on your personal tax return), claiming Section 179 will be allowed IF there is other 'earned income' on the tax return (such as W-2 wages).  If there is not enough 'earned income' for the Section 179 to offset, it will be carried to the next year.

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Level 12

Are you able to use Section 179 Depreciation deduction if your business had a loss?

However, I should add that if your Self Employed business has a loss, it may not be a good idea to use Section 179 to offset your Wages.  Using regular depreciation (which is would also be used in future years) would offset both income tax AND self employment tax in future years (assuming the business will have a profit in future years).
Level 1

Are you able to use Section 179 Depreciation deduction if your business had a loss?

Thank you very much for your answer.
Level 2

Are you able to use Section 179 Depreciation deduction if your business had a loss?

Can U explain why it is not a good idea to not take Section 179 to offset Self Employment Wages?

Level 20

Are you able to use Section 179 Depreciation deduction if your business had a loss?

Can U explain why it is not a good idea to not take Section 179 to offset Self Employment Wages?

 

Huh? What wages? If a sole proprietorship or single member LLC the owner of that type of business can not be an employee of that business they own. Under no circumstances will the owner of a sole proprietorship or single member LLC issue themselves any type of tax reporting document. So if the business operated at a loss for the tax year, there is no SE tax assessed since there's no taxable income to assess it on.

Maybe you have an S-Corp or C-Corp? If so, and you are an employee of that corporation (which you can be) then the corporation *will* pay the SE taxes on the wages they paid you, any way you look at it.