Question

Filing a loss

Forum|Forum|1 year ago
March 18, 2025
1 reply
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I am just completing some paperwork for taxes with our schedule C. We purchased a few LARGE pieces of equipment for our business and had a good year for income. It shows a loss with our equipment purchases and other deductions for the year. I've done our taxes for a lot of years with Turbo Tax and haven't ever actually filed a loss. Its making me very nervous to send them in. So my question is "Is the loss accurate and ok for an established business on a good year?"

TurboTax Home & Biz Windows

T

ThomasM125

The loss may be accurate and if so it would be OK to report it even for an established business.

Typically, when you have a loss it will be reflected on your balance sheet, often by a decrease in cash or increase in payables, sometimes by a decrease in accounts receivable, or in your case by an increase in assets. If the accounts on your balance sheet are correct, then usually the loss will be reflected there in a change in the balance of one or more accounts when you compare the ending values to the beginning values.

If a careful analysis and reconciliation of your income statement and balance sheet accounts reflects a loss for the year, then it is appropriate to reflect that on your tax return. Also you purchased costly pieces of equipment that will often generate a loss when you use bonus or section 179 depreciation, which will accelerate the depreciation deduction allowed. In that case, a loss could easily be experienced.

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