Carryforwards

Tax losses allowed to be applied to offset future income in some specified number of future years.

Carryforward

In accounting, a way for a company to reduce its tax liability by applying losses to future tax years in which the company makes a profit. That is, carryforward allows companies to apply losses to profits that have not yet occurred and thereby reduce the taxes they pay on those profits. Carryforward is limited to seven years. For example, suppose a company loses $500,000 in year one, then nets $1,000,000 in year five. The company may carry forward the losses and only be liable for taxes on $500,000 of its profit in year five.

Independent contractors who file Schedule C with the IRS are required to use carryforwards, which is useful since most independent contractors lose money in their first few years of business. Some publicly-traded companies opt not to use it, as appearing to reduce profits may scare off potential investors who do not realize that the profits upon which taxes are paid do not equal the company's actual profits.

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References in periodicals archive

To the extent the company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by federal, state or foreign tax authorities to the extent utilized in a future period.

Uber says under federal income tax examination by IRS for 2013, 2014

In order to protect iGo's ability to utilise its net operating loss carryforwards, iGo had previously amended its certificate of Incorporation to limit the ability of any group or person to acquire 5% or more of iGo's common stock (subject to certain exceptions, including acquisitions approved by the board) by any group or person.

iGo Closes Acquisition of Cutlery Manufacturer Kasco

The utility benefits from constructive regulation and cash savings from operating and maintenance (O&M) expense reductions and net operating loss carryforwards (NOLs) at parent CMS Energy Corporation (CMS), which will be used to help fund growth capex.

Fitch Ratings assigns 'A+' rating to Consumers Energy Company's FMBs

S corporations, on the other hand, follow the general carryforward rules; they retain any nondeductible interest expense carryforwards at the entity level.

Seven Questions about the Business Interest Expense Deduction: First Look at the Tax Cuts and Jobs Act of 2017

As Alaska Communications previously disclosed, on January 8, 2018, its Board adopted the tax benefits preservation plan to preserve the federal net operating loss carryforwards (NOLs) that Alaska Communications has generated from historical tax losses from being limited by the application of Section 382 of the US Internal Revenue Code.

Alaska Communications announces tax benefits exemption process

Technical problems for fiscal-year taxpayers and taxpayers with pre-2018 NOL carryforwards

Carry your losses (further) forward

HeidelbergCement released a statement in response to the United States' recent tax overhaul that reduced the federal corporate tax rate from 35 percent to 21 percent as well as changed the regulations regarding the utilization of loss carryforwards.

HeidelbergCement Addresses U.S. Tax Reform

The Rights Plan is designed to protect the company's ability to use its valuable NOL carryforwards and certain other valuable tax attributes.

Inseego adopts NOL rights plan

Our business strategy also seeks to take advantage of Real Industry's US federal net operating loss tax carryforwards of USD 916 million.

Real Industry Restarts Used Beverage Can Recycling Operation

45B credit carryforwards to the 2014 tax year when credits that were originally calculated incorrectly originated in years closed under the statute of limitation.

Recent guidance affecting research credit carryforwards from closed years