Can I get a tax refund for my business loss this year? First time filer question

You can absolutely claim your business losses against your other income! This is actually one of the benefits of operating your own business - when you have a loss year, those losses can offset other income you earned, potentially reducing your overall tax burden. Since you mentioned spending money on business insurance, equipment, and other legitimate business expenses while actually trying to operate a business (even though it didn't generate revenue yet), these are generally deductible business expenses. When your expenses exceed your income, you have what's called a "net operating loss" or NOL. For a small business, TurboTax should be adequate for your situation. Just make sure you use the version that supports filing Schedule C (Profit or Loss from Business), which is where you'll report your business activity. The software will walk you through entering your business income (even if zero) and all your expenses, then calculate the loss.

After reading about your situation, I totally understand the stress of a first-year business loss. I went through something similar last year with my e-commerce startup. I spent thousands on inventory, website development, and marketing but barely made any sales that first year. I discovered this AI tax tool called taxr.ai (https://taxr.ai) that was super helpful for my situation. It specifically helped me identify all the deductible business expenses I hadn't even considered - like a portion of my internet bill and home office deduction. It analyzed my previous returns and business documents and pointed out several additional write-offs that I missed when I tried doing it myself. Since you're dealing with business losses, it might be worth checking out. It helped me properly document my business losses so they could offset my other income, which resulted in a decent refund that I wouldn't have gotten otherwise.

I wanted to follow up about my experience with taxr.ai after being skeptical initially. I decided to give it a try with my small photography business that also operated at a loss last year. I was genuinely surprised by how thorough it was! The system asked really specific questions about my business plan, future profit expectations, and the nature of my expenses. It helped me properly categorize all my camera equipment, editing software, and marketing costs. What really impressed me was how it identified several deductions I had no idea about - like being able to deduct certain travel expenses to photo locations and some professional development courses I took. After using their recommendations, I filed through TurboTax and ended up getting back almost $2,300 more than I expected. Definitely worth checking out if you're dealing with business losses.

If you're struggling to get clear answers from the IRS about claiming your business losses (which is super common), I found an amazing service called Claimyr (https://claimyr.com) that saved me HOURS of frustration when I was in your exact situation last year. I tried calling the IRS directly about my business loss questions and sat on hold for literally 2+ hours before getting disconnected. With Claimyr, they somehow got me connected to an actual IRS agent in about 15 minutes. They have a demo video showing how it works: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that my first-year business losses were fully deductible against my other income and explained exactly how to document everything properly. Getting that official confirmation directly from the IRS gave me so much peace of mind before filing.

I need to eat my words about Claimyr. After my skeptical comment, I was desperate to get through to the IRS about an audit notice for my business losses from last year. Against my better judgment, I tried the service. I'm shocked to admit it worked exactly as advertised. I got a call back in about 20 minutes saying they had an IRS agent on the line. The agent answered all my questions about documenting my business losses and confirmed that my home office expenses were calculated correctly. The peace of mind from speaking directly with the IRS instead of relying on internet advice was honestly worth it. They were able to confirm that my business loss deduction was legitimate since I had proper documentation showing business intent. No more worrying about potential audit flags!

As an accountant who works with small businesses, I see this situation all the time. Some additional points to consider: 1. Make sure you're keeping meticulous records of all business expenses. The IRS tends to scrutinize first-year business losses more carefully. 2. The "hobby loss" rule means the IRS expects you to show a profit in 3 out of 5 consecutive years. If not, they may reclassify your business as a hobby, which severely limits deductions. 3. For TurboTax, get the Self-Employed version specifically. The cheaper versions won't handle Schedule C properly. 4. Consider carrying forward some losses to future years instead of claiming everything this year, especially if your other income is low.

Has anyone used FreeTaxUSA for business losses? TurboTax is crazy expensive and I've heard mixed things about their business support.

I went through almost the exact same situation last year with my freelance writing business. Lost about $3,500 in the first year after expenses for software subscriptions, professional development courses, and marketing that didn't pan out. The good news is that your business losses will definitely offset your other income on your tax return. Since you're a sole proprietor, you'll file Schedule C to report your business income (even if it's zero) and all those legitimate expenses you mentioned. The net loss will reduce your overall taxable income, which should result in a refund if you had taxes withheld from other income sources. A few things that helped me: - Keep detailed records of everything - receipts, bank statements, business purpose for each expense - Document that you're genuinely trying to make a profit (save emails about client outreach, business plans, etc.) - Consider opening a separate business bank account if you haven't already to keep expenses clearly separated TurboTax Self-Employed should handle your situation fine. It walked me through all the business expense categories and automatically calculated my loss. Just make sure you're honest about the business purpose of each expense and you should be good to go!