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‘Double up’ on enhanced NOL carryback rules for small biz

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in Small Business Tax,Small Business Tax Deduction Strategies

The new “Worker, Homeownership and Business Assistance Act of 2009” includes a powerful tax-saver for struggling business owners. It extends and expands the earlier Stimulus Act’s tax break for net operating losses (NOLs).

Strategy: Let the tax law do double duty. If you qualify, you can take advantage of the enhanced NOL carryback rules for both 2008 and 2009. This double tax benefit is limited to certain small business operations.

A business that carries back an NOL to a profitable tax year is entitled to a quick tax refund from the IRS.

Here’s a quick recap: A business can normally carry back an NOL for two years and then forward for up to 20 years until the company exhausts the loss. However, the 2009 economic stimulus law allowed a qualified small business to carry back NOLs for up to five years (either three, four or five years). This opportunity was available for NOLs only in tax years beginning or ending i...(register to read more)

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