WASHINGTON, DC — Time is running out for many small businesses wishing to take advantage of the expanded business loss carryback option included in this year’s recovery law, the Internal Revenue Service said today. Eligible individuals have until Oct. 15 to choose this expanded carryback option. Eligible calendar-year corporations have until Sept. 15.

Eligible individuals have until Oct. 15 to choose this expanded business loss carryback option. Eligible calendar-year corporations have until Sept. 15.

This carryback provision offers small businesses that lost money in 2008 an excellent way to quickly get some much needed cash if they were profitable in previous years. This option is only available for a limited time, so small businesses should consider it carefully and act before it’s too late.

Under the American Recovery and Reinvestment Act (ARRA), enacted in February, many small businesses that had expenses exceeding their income for 2008 can choose to carry the resulting loss back for up to five years, instead of the usual two. This means that a business that had a net operating loss (NOL) in 2008 could carry that loss as far back as tax-year 2003, rather than the usual 2006. Not only could this mean a special tax refund, but the refund could be larger, because the loss is being spread over as many as five tax years, rather than just two.

This option may be particularly helpful to any eligible small business with a large loss in 2008. A small business that chooses this option can benefit by:

• Offsetting the loss against income earned in up to five prior tax years,
• Getting a refund of taxes paid up to five years ago,
• Using up part or all of the loss now, rather than waiting to claim it on future tax returns.

Under ARRA, eligible taxpayers can choose to carry back a NOL arising in a taxable year beginning or ending in 2008 for three, four or five years instead of two. The option is available for an eligible small business (ESB) that has no more than an average of $15 million in gross receipts over a three-year period ending with the tax year of the NOL. This choice may be made for only one tax year.

Most taxpayers still have time to choose this special carryback and get a refund. A calendar-year corporation that qualifies as an ESB must file a claim by Sept. 15, 2009. For individuals, the deadline is Oct. 15, 2009. This includes a sole proprietor that qualifies as an ESB, an individual partner in a partnership that qualifies as an ESB and a shareholder in an S corporation that qualifies as an ESB. Deadlines vary for fiscal-year taxpayers, depending upon when their fiscal year ends and whether they are making the choice for the tax year that ends or begins in 2008.

Individuals can accelerate a refund by filing Form 1045, Application for Tentative Refund. Similarly, corporations with NOLs may also accelerate a refund by using Form 1139, Corporation Application for Tentative Refund. Normally, refunds are issued within 45 days. These forms, along with answers to frequently-asked questions about this special carryback, and other details can be found on the IRS Web site.

WEST LAFAYETTE, Ind. — A workshop on effective business marketing and promotional and sales strategies will take place May 13 and June 24 at the Ivy Tech Community College campus in Lafayette.

The Bigger Profits Through Targeted Sales workshop will run from 7:30 a.m. to 6 p.m. both days. Workshop sponsors include the Purdue University Cooperative Extension Service New Ventures Team and the Supplier Diversity Development Coalition of Greater Lafayette.

“With this partnership we are hoping to attract women-owned and minority-owned businesses, along with other small business owners to this workshop,” said Jesse Moore, director of Purdue’s Office of Supplier Diversity Development.

The workshop includes sessions on marketing and sales, defining a product and positioning segmentations, and implementing a marketing action plan. Participants will build their own personalized marketing action plan and sales strategy that can be implemented immediately.

“The focus of the workshop is on marketing and sales, and this is very relevant in today’s economy,” said Jane Anderson, senior project manager of the New Ventures Team.

“This workshop comes at the right time for small businesses because at the end of the workshop participants will leave with a personal marketing action plan and selling strategy that they can put to work in their business immediately.”

Workshop registration is $80 per person for the May 13 and June 24 workshops. If registration is completed before June 12 for the June 24 workshop, registrants receive an early bird rate of $60 per person.

Register online at https://www.agecon.purdue.edu/cab/newventures/biggerprofits2009/Register.asp. For more information about the workshop visit https://www.agecon.purdue.edu/cab/newventures/biggerprofits2009/.

WASHINGTON, DC — The Internal Revenue Service announced today that small businesses with deductions exceeding their income in 2008 can use a new net operating loss tax provision to get a refund of taxes paid in prior years.

To accommodate the change in tax law, the IRS today updated the instructions for two key forms – Forms 1045 and 1139 — that small businesses can use to make use of the special carryback provision for tax year 2008. These forms are used to accelerate the payment of refunds.

The new provision, enacted as part of the American Recovery and Reinvestment Act of 2009, enables small businesses with a net operating loss (NOL) in 2008 to elect to offset this loss against income earned in up to five prior years. Typically, an NOL can be carried back for only two years. The IRS released legal guidance today in Revenue Procedure 2009-19 outlining specific details. Some taxpayers must make the election to use this special carryback by April 17, 2009.

“The new net operating loss provisions could throw a lifeline to struggling businesses, providing them with a quick infusion of cash,” said IRS Commissioner Doug Shulman. “We want to make it as easy as possible for small businesses to take advantage of these key tax benefits.”

With the economic downturn and the new law, the IRS expects record numbers of small businesses to be eligible for the refunds. The IRS is putting in special steps to ensure timely processing of these refunds to help small businesses during this difficult period.

Small businesses with large losses in 2008 may be able to benefit fully from those losses now, rather than waiting until claiming them on future tax returns.

The normal two-year carryback remains available if the small business does not elect the special carryback provision. If the loss exceeds the income for the carryback period, the taxpayer can continue to carry forward the remaining balance of the NOL for up to 20 years.

For small businesses that use a fiscal year, this special carryback may be used for an NOL in either a tax year that ends in 2008 or a tax year that begins in 2008. Once a taxpayer makes this election, it may not be changed.

To qualify for the new five-year carryback provision, a small business must have no greater than an average of $15 million in gross receipts over a three-year period ending with the tax year of the NOL. Businesses with more than $15 million in gross receipts still qualify to carry back their 2008 NOL for two years.

There are several methods that a small business uses to elect the new provision as detailed in the Revenue Procedure.

If a small business previously elected to waive the carryback of 2008 NOL but now wants to elect this special carryback, the small business may revoke its previous election to waive the carryback. The election revocation must be made on or before April 17, 2009.

Generally small businesses that are not corporations (including sole proprietorships filing schedule C with their Form 1040) may accelerate a refund by using Form 1045, Application for Tentative Refund.

Corporations with NOLs may also accelerate a refund by using Form 1139, Corporation Application for Tentative Refund.

The IRS will be closely monitoring these filings and will provide additional staff as needed to process these forms. The IRS will work to issue refunds within 45 days or even earlier to the degree possible.

In addition, Frequently Asked Questions have been posted on the IRS.gov web site. Small businesses that file Form 1040 can also call 1-800-829-1040 with NOL questions. Corporations can contact 1-800-829-4933 with NOL questions.

Form 1045 or Form 1139, whichever the taxpayer uses, generally must be filed within one year after the end of the tax year of the NOL. In addition, the current year’s tax return must be filed by the date the Form 1045 or Form 1139 is filed. Form 1045 and Form 1139 are filed at the same place the taxpayer’s return is filed, as listed on the return instructions.

Accelerated refunds paid via Form 1045 or Form 1139 is described as “tentative” because the applications for refunds are potentially subject to review at a later date. Form 1045 Instructions and Form 1139 Instructions on www.IRS.gov provide more information on the accelerated refund option.

INDIANAPOLIS, Ind. — The U.S. Small Business Administration (SBA) is presenting small business informational seminars. The next SBA Seminar, Doing Business with the Federal Government, will be offered on Tuesday, April 29, 2008. The seminar will be conducted from 3:00 p.m. to 4:30 p.m. EDT at the SBA Indiana District Office, 8500 Keystone Crossing, Suite 400, Indianapolis.

Attendees will learn:

• Where to find contracting opportunities;
• How to register your business to sell to the government;
• How to market your products and services;
• Why you may need to obtain a surety bond and how.

Reservations are required as seating is limited. There is no cost for attending this SBA seminar on Tuesday, April 29, 2008, from 3:00 p.m. to 4:30 p.m. at the Small Business Administration Indiana District Office.

For more information or to reserve your space, contact Mike Hasler at (317) 226-7272 x113 or michael.hasler@sba.gov.

The U.S. Small Business Administration is an agency of the Federal government.