An NOL is nothing to LOL about – Fortunately, a tax break is available

Description

Abstract: In Internet parlance, “LOL” is a commonly used abbreviation for “laughing out loud.” In tax parlance, an NOL — or net operating loss — occurs when a company’s allowable deductions for the tax year exceed its gross income. An NOL is obviously nothing to LOL about. Fortunately, the federal tax code allows a deduction for NOLs that recently has been enhanced for smaller companies. But is it better to carry the loss back as far as possible, and carry any remainder forward? Or is it better to just carry the entire amount forward? This article looks at the ins and outs of this valuable tax break. Also, a sidebar explains that recent legislation has extended the Section 179 initial-year expensing election — so now might be a good time to buy new assets.