Business & farm

Figure taxable income for this purpose by totaling the net income and losses from all trades and businesses you actively conducted during the year. Net income or loss from a trade or business includes the following items.

• Section 1231 gains (or losses).
• Interest from working capital of your trade or business.
• Wages, salaries, tips, or other pay earned as an employee.
For information about section 1231 gains and losses, see chapter 3 in Pub. 544.

In addition, taxable income is figured without regard to any of the following.
• The section 179 deduction.
• The self-employment tax deduction.
• Any net operating loss carryback or carryforward.
• Any unreimbursed employee business expenses.

In addition to the business income limit for your section 179 deduction, you may have a taxable income limit for some other deduction.  You may have to figure the limit for this other deduction taking into account the section 179 deduction. If so, complete the following steps.

For further information on your Section 179 deductions see IRS Publication 946.