Under the American Recovery and Reinvestment Act, enacted in February, small businesses that had expenses exceeding their income for 2008 can choose to carry the resulting loss back for up to five years, instead of the usual two.
This means that a business having a net operating loss in 2008 can carry the loss back to tax-year 2003, rather than 2006. This can lead to a larger tax refund of taxes paid up to five year ago. Businesses will also offset the loss against income earned in these years.
Time is running out to claim this option though - eligible calendar-year businesses have until September 15 to choose the expanded carryback option. Individuals have until October 15.
Businesses eligible include small busesses that had no more than an average of $15 million in gross receipts over a three year period ending with the tax year of the net operating loss.
Individuals can accelerate a refund by filing Form 1045, Application for Tentative Refund, and corporations can use Form 1139, Corporation Application for Tentative Refund.
These forms, along with answers to frequently asked questions about the special carryback and other details, can be found at the IRS web site, www.IRS.gov.
The Home Builders Association of Greenville are your neighbors and community leaders providing education and support for building industry professionals. We create jobs, encourage homeownership, and promote responsible growth throughout the upstate of South Carolina.
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