My side business net income is in the negative and my expenses from this side business are impacting my total Federal Balance - is this OK?

[ctsygiel]

I like that my federal balance is less from my side business expenses, but I am worried this could cause trouble with IRS.

[CarolynM · Accepted solution]

Yes, you are good.

 As long as the you have the documentation to support your losses and the losses don't continue for several years in a row you will not face trouble with the IRS. Self-employment is risky and uncertain, so the IRS understands you will not have profit every year.