How far back (in years) can I go to claim expenses I used in starting my business?

[businessbob79]

Background.... It is a photography business, a portrait studio in my home. While I was working a full time job and a part time job. So the road has been long. Then, I know the IRS their going to say, hey, that's just a hobby. But I have documentation where early on, I was intent on designing and developing a website for it for business purposes. I also have files and education on it being a business. I have the sole intent of doing it as a business and not a hobby from the get go. So that my question comes back is how far back can I go to capture the previous year(s) expenses? I did some research and I see nothing on it. (hard number in terms of years and a cut of point) But, i do see only intent of action! (I was not a hobbyist of saying, hey, I should try and make money out of this.) It was my intent for the very beginning from day one! So, if someone experienced in this area would be great!! Thanks.

[xmasbaby0]

You cannot amend any farther back than 2022 to seek a bigger refund.    Any refunds for 2021 or earlier have been forfeited.

Wait until your original return has been fully processed before you amend, and make sure you have saved a pdf of the original return before you amend. (If you do not save it as a pdf, the amended return will overwrite the original, and the original will be lost forever)

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-return/amend-change-correct-return-a... 

Do not expect quick results from amending. It can take four months or more for the IRS to process an amended return.  

You can watch for information here:

https://www.irs.gov/Filing/Individuals/Amended-Returns-(Form-1040-X)/Wheres-My-Amended-Return-1

[businessbob79]

Thanks for your input. I really appreciate it.

As a follow up, I know we don't have crystal balls, but how would I have to prove to the IRS that it truly started as a business and not a hobby.

Because early on, I do have receipts from Godaddy starting a website back then, which is at least seven years!

Let alone the files, videos and other trainings on how to run a photography business. I know the IRS may find it funny, but I truly started it as a business not a hobbyist who decided to turn it in to a business! 

What are your thoughts?

Thanks

[Mike9241]

this is from IRC section 183 which deals with hobby losses

(d)Presumption
If the gross income derived from an activity for 3 or more of the taxable years in the period of 5 consecutive taxable years which ends with the taxable year exceeds the deductions attributable to such activity (determined without regard to whether or not such activity is engaged in for profit), then, unless the Secretary establishes to the contrary, such activity shall be presumed for purposes of this chapter for such taxable year to be an activity engaged in for profit.

so if let's say you don't meet the 3 out of 5 year profit rule.  how to show the IRS it's an activity for profit.  

see this IRS webpage for what the IRS takes into consideration. keep good documentation of what you are doing to meet these criteria. a written business plan is useful 

https://www.irs.gov/newsroom/heres-how-to-tell-the-difference-between-a-hobby-and-a-business-for-tax...