How do I get a refund if i am a negative company ?
I remember running into someone that had a negative company and they received a refund from the treasury. I am in the same situation and can really use that $5,000 that the check said of that person I’m talking about.
I make around $50k but my expenses exceed what I make to keep running my businesses. I called h and r block but they usually don’t deal with these situations a lot.
I’m thinking about calling in a bussiness cpa for this matter but if anybody knows how to do what I said please let. Me know.
If you have a regular job then you might not know of the ways businesses get refunds especially when they are in the red.
Thanks a lot
- Anonymous8 months ago
You should have finished 10th grade.
When I had a business, I lost money 3 or 4 months of the year. It was seasonality. Not a "negative company".
Losses I incurred those months offset some of the profits the rest of the year.
Sounds like you have no business doing whatever it is you are doing.
The government does not pay you for being illiterate.
- Anonymous8 months ago
- martinLv 78 months ago
As a business owner, you could get a refund only if you paid more taxes than you end up owing. If you didn't pay income taxes, you can't get a refund. But you may be eligible for assistance from the government, if you are a small business owner.
- curtisports2Lv 78 months ago
No such thing. The business may be entitled to refundable credits, and may be entitled to a refund of quarterly or monthly income tax payments it made on income it did not have (if the business lost money then it had no net taxable income) but you don't get a refund JUST for being a money-losing business.
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- Coffee DrinkerLv 78 months ago
without seeing your friend's entire tax return, its impossible to say how they ended up with a $5,000 refund and what role (if any) their business losses played in that calculation. Its entirely possible that they just over-paid their tax liability and they would have gotten a big refund anyway. The business loss may have had little or no impact on their refund.
Under US tax law there is no automatic refund simply for losing money in a business. The IRS doesn't just reimburse you for your losses or anything like that.
But what CAN happen is that business losses can offset other taxable income. That can result in a situation where you over-paid and you get a refund of that over-payment.
For example lets say there's someone who is single, no kids, no other deductions, and they work a regular W2 job with an $80,000 salary. Their employer withholds $11,000 toward federal taxes.
If this was the entire tax picture, they'd have a tax liability of $10,905 and they'd get a tax refund of just $95 (the amount they over-paid).
But now assume that same person ran a side business where their expenses exceeded their revenue by $10,000.
That $10k loss can offset other income, so when they file their tax return their taxable income is calculated as $80k salary minus $10k business loss for a net taxable income of $70k.
That same person single/no kids with taxable income of $70k will have a tax liability of $8705. But since they had $11,000 withheld they would get a refund of $2295.
So that $10k loss saved them $2,200 in taxes, which in turn resulted in a larger refund. But it was still just a refund of their own money from over-paying the IRS all year. The IRS isn't reimbursing this person for the $10,000 business loss.
Any decent CPA can file your personal and business tax returns and see if you qualify for a situation like this where you get an over-payment refunded because business losses result in smaller than planned net income. If you go someplace like Liberty tax or H&R Block make sure you set an appointment with one of their more experienced preparers - the entry level tax preparers who take walk in clients might not have the skills necessary to file a business return.
- Wayne ZLv 78 months ago
Up to $5000 in start up expenses are deductible in your first year.This does not mean that you get a $5000 refund.
H&R Block didn't know what you are talking about because what you are talking about does not exist.
Things that everyone hears about taxes from friends, co-workers and relatives are normally wrong about 98% of the time and that percentage may be too low.
- 8 months ago
Then it's a tax refund when you file your return.
- JudyLv 78 months ago
If a business loses money, it loses money - the government doesn't reimburse you for your loss, it's on you. You won't owe any tax for the year if your deductible expenses are higher than what you take in, so if you have made estimated payments, you'll get them refunded, that might be what happened to the person you're talking about. A CPA will tell you this same thing.
- A HunchLv 78 months ago
The only way this would happen is they were eligible for a specific tax credit.
There is no general tax credit that says "hey, you operated a business in the red so we rain money on you." Thus, if this really happened, it would be specific to their tax situation.
- Anonymous8 months ago
the jove is gone.