@Spires34 wrote:
But that last part you said, yes that is my question. everyone says it "carries over" so what does that mean? Does turbo tax trash how much additional expenses went past that zero income, and save it for next year? For example do I put a post-it note on my desk and hold it for next year with that number on it? I know not literally but just trying to hammer down my question here. not sure how carry over works.
Let me clarify.
If you are not engaged in business activities, then you have startup costs. Startup costs are reported the first year you have ongoing business activities, and are in fact "saved on a post it note" until that time.
If you are engaged in ongoing business activities but just haven't been paid yet, then you report your expenses as of the date you paid them. You can't save them for the future on a post it note or anywhere else. If you have a loss, it is treated as I described above.
If "everyone says" losses carry over, then everyone is wrong. For disregarded entities, your losses offset your other income in the current year. The only time you have a loss to carry forward is if you have a net operating loss -- where the loss from your business exceeds all your other taxable income. In other words, if you made $20,000 in profit from business A, and lost $30,000 on business B, you would carry that $10,000 loss forward. But to do that, you would need to enter all your income and expenses for all your business, let Turbotax calculate the NOL and prepare the correct additional form that is required. (And you can't choose to pay tax on the $20,000 profit from business A and carry forward a $30,000 loss on business B.)
