Question by jennifer r: what happens if you have a loss on your small business taxes more then 3 years?
I have a small internet store and this will be the fourth year I had to claim a loss on my taxes “due to the economy.” I’ve heard you can only claim a loss for 3 years, is that true?
Answer by SmartA$ $
There’s no limit to the number of years you can claim a business loss on your taxes. However as a general rule of thumb, if your business isn’t showing a net profit after 3 years, they will become very suspicious and you become a prime suspect for an in depth audit. If you have good records and can justify every little expense, then you will make it through the audit without too many changes.
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