John Sculley III, who was the president of PepsiCo, until he became the CEO of Apple Inc. for more than a decade, said “timing is everything.” He was probably referring to business moves, but the sentiment applies with equal force to tax write-offs. Due to various limitations on certain deductions and tax credits, you may not be able to use the full amount of a write-off in the year in which it arises. Instead, the unused amount may be carried forward and used in future years (or back in limited situations). Fully utilizing write-offs you’re entitled to means carefully tracking these carryovers. Here are some of the most common carryovers for small business owners to look for and the records you should keep.
