About 355,000 New Zealanders were self-employed in 2021. Sometimes thing don’t go to plan and your expenses end up greater than your income. This short blog looks at how you can claim the loss, if your deductible expenses are greater than your income.
You can use a loss by carrying it forward to the following year. The loss will be shown in your income tax return for the year. Inland Revenue will then assess the return and send out a letter showing the amount off loss that should be included in your next IR3 income tax return.
A loss brought forward effectively reduces your taxable income in the following year, resulting in a lower tax liability.
If you have any queries, please contact our office for advice tailored to your individual situation.