Sunday, September 20, 2009

Net Operating Loss Carrybacks Can Enhance Your Cash Flow!

Are you looking for a way to increase your cash flow in a troubled economy?  Well, look no further -- The Federal government is here to help.  One of the favorable changes that the Obama administration made to the tax code was to allow for a five, rather than the previous two, year carryback of net operation losses.

What does this mean to you?  If you had a loss from your business in 2008, and had income in any of the previous 5 years, you may be eligible for the 5 year net operating loss carryback provisions.  These provisions allow you to make a request for a refund, by carrying back your losses to the income years.  How long does this take?  Not long.  We have averaged a turn around of about 2 to 3 months for most refund requests.  The Treasury has issued regulations that have clarified many of the issues that come up when requesting a refund.  Some of the issues can be complicated, but a tax advisor well versed in this area should be able to lead you through it.  Best of all, the refund is not taxable income.

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