I am self-employed and file Schedule C for my sole proprietor business each year. I am using the "cash accounting" method. This has worked fine for many years as I have always had a net business profit each year. This time is different. In CY 2024 I incurred (paid out) business travel expenses (in December) which exceeded my 2024 income, so I had a net business loss for the year. However, I will receive reimbursement from my client for that travel in early 2025 which will post as income in 2025. Will my business loss in 2024 carry over to 2025 to offset the expected income? Or is there some other way that my travel expenses in 2024 and the reimbursement in 2025 will effectively become a wash tax-wise? Thanks in advance.
