Are business losses deductible against personal income?

Question

Say ,for instance, a $10,000 annual loss from my part-time sole-proprietorship? What portion if any can I deduct from my W-2 income from my full-time job?

Answer 1

In a sole proprietorship, you have only personal income and loss.
Be certain that you have clean and detailed records.
I would not take that much personal deduction/loss without a tax accountant. That could trigger an audit, done by you alone.
You may be able to do part one year and part the next. An accountant can advise you.

Answer 2

The 10,000 would be deductible under certain conditions (1) you icontributed 10,000 to the business during the year in which the 10,000 loss occured or had carry forward positive business equity in which to write off against and (2) the losses were "expense" type losses as opposed to "depreciation" losses. (3) if the depreciation losses are cummulative from prior years they can also be written off.

You need to review this with a CPA or a tax advisor.

Answer 3

It depends on several things. 1. How much you make 2. How much you invest into your company and 3. How you account for your income and expenses.

You should be able to deduct taxes due from your w-2 and use it to re-coup losses from scheg-c (profit and loss - sole prop)