Feb 23, 2009

Business Loss Carrybacks Extended by Stimulus Package

Under the stimulus package, eligible small businesses with net operating losses (NOL) in 2008 can carry those losses back for five years instead of the current two-year carryback period. If you paid a tax on profits in the past five years, this is good news -- you'll basically get a free refund on some of the taxes you paid. The IRS has published an FAQ that explains the new NOL rules and has also updated the instructions for the forms used to claim the loss: Form 1039 (for corporations) and Form 1145 (for other businesses).