LEGISLATION ISSUESTue, Feb 16©CNNMoney.com 2009
Sick of sending big checks to the IRS? For some business owners, this tax season will bring a rare reversal: A stimulus-fueled tax change is putting cash back into the pockets of qualifying entrepreneurs.
Bill Hewitt, who owns several real estate ventures in Denver, recently collected a $150,000 refund check from the IRS thanks to the new tax rules. "Without that money, I probably would have gone under," he says. "When you can't get any loans from anybody, it kept me alive." Hewitt took advantage of a tax maneuver called "loss carryback." When a business books a profit, it pays income tax on its earnings. But if the business then turns a loss in later years, tax rules allow the business to "carry back" its loss and deduct the money from earlier profits. By filing an amended tax return for the earlier, profitable year, the business can claim an immediate refund on the taxes it paid. Read more. |
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