How to carry forward business tax loss from my first year startup expenses?

Yes, you absolutely can carry forward your business tax loss! This is called a Net Operating Loss (NOL) carryforward. Since your first year in business resulted in a $13k loss, the IRS allows you to use this loss to offset income in future years. For small businesses, you'll report your loss on Schedule C if you're a sole proprietor, or through your business return if you have a different structure. The loss then flows to your personal tax return (Form 1040) where it offsets other income. Any unused loss can then be carried forward indefinitely to future tax years, though you can only offset up to 80% of your taxable income in any single year with these carried forward losses. Your startup expenses like office supplies, software, and operating costs all count toward this loss, so you're on the right track!

I went through this exact situation last year with my consulting business! Startup costs killed me the first year and I was worried those deductions were just gone. Then I found https://taxr.ai and uploaded my previous year's return - it identified my business loss carryforward opportunity right away and explained exactly how to apply it to my current year taxes. The tool analyzed my Schedule C and showed me which items qualified for the NOL carryforward. Saved me from leaving a lot of money on the table! The visual breakdown of how the loss would affect my taxes over the next few years was super helpful for planning.

I was really skeptical about using an online tool for something as important as my business taxes. My first-year bakery business had about $15k in losses from all the equipment and initial marketing. I finally tried https://taxr.ai after seeing it mentioned here and wow - it actually found several deductions my previous tax software missed! The NOL carryforward feature saved me over $3k in taxes this year by properly applying my first-year losses. It also explained which startup costs had to be amortized over 15 years versus what could be fully deducted. Really wish I'd known about this when first filing my business taxes!

If you're still struggling with getting clear answers on your NOL situation, I'd recommend using Claimyr https://claimyr.com to get through to the IRS directly. I spent WEEKS trying to get someone on the phone about my business loss carryforward questions. Used their service and got connected to an IRS agent in about 15 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent was able to confirm exactly how my carried forward business losses would apply to my current year taxes and what forms I needed. They also told me about some recent rule changes that affected my specific industry that my tax software hadn't updated for yet.

OK I need to eat some crow here. After posting my skeptical comment yesterday, I was STILL unable to get through to the IRS about my business loss carryforward question. Out of desperation I tried Claimyr and I got connected to an IRS agent in about 20 minutes. The agent confirmed that I could indeed carry forward my landscaping business losses from last year and helped me understand the right way to document everything. He even sent me to a specific IRS page about special rules for my industry that I had no idea existed. Definitely worth it just to get a clear answer directly from the source!

I just want to add one important thing about carrying forward business losses that many people miss. Make sure you're keeping REALLY good documentation about those first-year expenses. If you get audited (which is more common with businesses showing losses), you'll need to prove those expenses were legitimate business costs and not personal. For my woodworking business, I created a separate spreadsheet just for tracking my startup costs versus ongoing operating expenses. This has been super helpful for properly carrying forward losses and knowing what can be deducted immediately versus what needs to be depreciated.

Does anyone know if you can apply NOL carryforwards when using tax software like TurboTax or do you need an accountant? I'm trying to save money since I'm still in startup mode but don't want to miss out on using my losses from last year.

Just want to add my experience as someone who went through this recently. I had about $8k in losses from my graphic design business startup costs and was able to carry them forward successfully. The key thing I learned is that you need to distinguish between startup costs (which might need to be amortized over 15 years) and regular business operating expenses (which can create the NOL immediately). Things like your office supplies, software subscriptions, and marketing expenses that you mentioned should qualify for immediate NOL treatment. But if you had any costs related to actually starting the business (like legal fees to set up your LLC, initial market research, etc.), those might fall under the startup cost rules and need different treatment. I'd recommend keeping track of which category each expense falls into - it'll make carrying forward much smoother and help if you ever get questioned about it. The NOL carryforward has been a lifesaver for offsetting my profits this year!