Consider loss carryforwards for income tax
Closing a fiscal year with a loss is annoying. The only positive thing is that you can claim the loss carryforward on your next income tax. The deadline for submitting a year's loss carryforward is the end of May of the following year.
Consider loss carryforwards in your next tax return
- A loss for income tax can be real or accounting.
- A real loss arises when a merchant earns 20,000 euros but spends 25,000 euros. Then there is a loss of 5,000 euros.
- An accounting loss arises when the merchant earns 20,000 euros, spends 15,000 euros and, in addition, has 10,000 euros in depreciation on his fixed assets. In this case, there is also a loss of 5,000 euros in terms of income tax, but not in real terms.
- The businessman starts the next financial year with a negative income. In order to document this for tax purposes, a loss carryforward is carried out.
- The loss carryforward must be made by May 31. of the following year at Tax office be reported.
Loss carryforward - this is how you use tax losses profitably
If you have made expenses that exceed your income, the loss deduction is made in ...
Losses from the previous year reduce income tax in the current year
- The loss carryforward is requested on page four of the income tax cover sheet in lines 92 and 93.
- In any case, the loss carryforward reduces the income tax in the current year. It will all be positive income, however, too interest charges and rental income offset against the losses.
- If the loss carryforward again exceeds the total of all positive income, it can be continued.
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