A net operating loss refers to a tax year in which a business's allowable tax deductions exceed its taxable income. In simpler terms, you had more expenses than you actually had revenue. However, there is a loophole: U.S. Code IRC § 172 allows businesses to use that loss as a carryover toward future tax years or as a carryback to recoup money from previous tax years. Calculating and taking advantage of an NOL can be hugely beneficial to your business if you need money fast. An NOL can offer you a quick tax refund, but you must be up to date on the rules and regulations of this tax relief.
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