Thousands of small businesses will lose a big refund in the next few weeks without even knowing it.  Don’t let your business be one of them.

One of the recent “stimulus” bills allows taxpayers to carry back their 2008 or 2009 tax losses five years, instead of the normal two years.  Such taxpayers have to elect to do so no later than six months after the original due date for their returns.  That’s Oct. 15 for individuals, who might have losses from their Schedule C business, or for a partnership or S corproation.  The deadline is Sept. 15 — two weeks from today — for calendar year C corporations.

Even these deadlines are extensions.  The election was originally to be made on the original tax returns for the years, but the IRS has allowed a six-month grace period.  You can find the details here.

Many taxpayers will get a bigger refund by carrying their loss back for more than two years.  An obvious example would be somebody who had a lot of income in 2004, 2005, and 2006, broke even in 2007 and 2008, and had a terrible 2009. 

So if you had a losing 2008 or 2009, see your tax advisor about whether you made the five-year carryback election, and if not, whether you should.  In this economy, you need all the “stimulus” you can find.

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