Carryback

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Carryback

Carryback

In accounting, a way for a company to reduce its tax liability by applying a net operating loss to previous years in which it made a profit. If a company deducts more than its net income in a given tax year, it may take the difference between the deduction and the net income (a negative number) and apply it as a deduction on taxable income for the previous five years. For example, if a company makes $1,000,000 in one year, and loses $500,000 the following year, it may only be liable for a $500,000 profit on the year it makes a profit. That is, it may receive a tax refund on part of what it paid for the profitable year. See also: Future Income Tax.

carryback

A business operating loss that, for tax purposes, may be deducted for a certain number of prior years, usually no more than three. A business uses a carryback to recover taxes paid on income earned in prior years. For example, if a firm experiences a year of large losses following a period of profitable operations, it may use the losses to cancel out profits from preceding years on which taxes have been paid. When the taxes a company paid on profits are canceled because of a carryback, the firm is issued a refund by the Internal Revenue Service. Also called carryover, tax loss carryback.
References in classic literature ?
I suppose he wants to carry back some of our civilization to his own people.
Pace out the distances with a wand at every five score, and do you, Arnaud, stand at the fifth wand to carry back my bolts to me.
And am I to carry back this report of you to Thessaly?
And he mentioned your name a score of times,' said Nicholas, 'and often bade me carry back his love to Mr Linkinwater.
In these days of fatted cattle and waving grain-fields this humble root, which was once the totem of an Indian tribe, is quite forgotten, or known only by its flowering vine; but let wild Nature reign here once more, and the tender and luxurious English grains will probably disappear before a myriad of foes, and without the care of man the crow may carry back even the last seed of corn to the great cornfield of the Indian's God in the southwest, whence he is said to have brought it; but the now almost exterminated ground-nut will perhaps revive and flourish in spite of frosts and wildness, prove itself indigenous, and resume its ancient importance and dignity as the diet of the hunter tribe.
And I hope our charming American visitor will carry back pleasant recollections of our English country life.