Does a loss on my corporate tax return also show up on my personal return?
My husband and I had a small business that shows a loss on the corporate return. We did not draw salaries or income from the company, but do have income from another employer on a W2.
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Corporations are viewed as independent taxable entities. Therefore the loss would be reported on the business’s Form 1120 U.S. Corporation Income Tax Return.
While turning a profit is the goal for every business, losses are increasingly common in this economy. In 2008 more than 3,700 publicly traded corporations reported losses, so you are in good company.
Fortunately for you, Congress extended the operating loss carry-back rules. Thus, if your business reported a profit in at least one of the last five years, you can use your 2009 loss to reduce the taxes you paid during more profitable times.