Tax Advisor’s – Answer Tax Question Of The Week!

Tax Advisors- Your Thoughts On This Question Are Appreciated

Taxpayer Question: I invested about 250 hours on a project that did not pan out and this had a huge impact on my bottom line in 2015.

For a consultant who charges an hourly rate and working as a sole proprietor, can I take a loss for work done on a project that was rejected by the client? 

Every Friday, TaxConnections addresses a question submitted to our Ask Tax Questions Platform. We ask our members to offer their thoughts on this question for the week. We realize you may need more information which you can request in the comments section below, or reach taxpayer privately as a TaxConnections Member. 

Please Make Comments Below Or Join TaxConnections And Communicate With This Taxpayer Directly And Privately

TaxConnections is where to find leading tax experts and technology around the world. Discover tax professionals who offer you a wide range of tax expertise and be more informed about the technology that supports them in operating efficiently and successfully.

TaxConnections connects tax professionals with new tax clients and tax jobs around the world. Tax Professional Members establish higher visibility online so prospective clients and employers can find our members easily. Each members also receives a Virtual Tax Office which is the most valuable online real estate available today! TaxConnections makes a difference in your professional life.

We offer a Special Membership rate to tax professionals out of work.
https://www.taxconnections.com/special-membership

Kat Jennings, CEO
TaxConnections
858.999.0053
kat@taxconnections.com

Facebook Twitter LinkedIn Google+ Flickr YouTube Vimeo    

Subscribe to TaxConnections Blog

Enter your email address to subscribe to this blog and receive notifications of new posts by email.



5 comments on “Tax Advisor’s – Answer Tax Question Of The Week!

  • Many Americans struggle with this concept, but the fact is, you have already taken a deduction for this loss. Notice the “huge impact on your bottom line.” Perhaps it would help to think of the year as a series of 250-hour projects. You would do 8 of them in a typical year. Now, divide all your expenses: rent, phones, supplies, etc. into the 8 projects and tally up the profits and losses of each one. You should get the same bottom line if you do it correctly, and you will see that the loss has been accounted for.

  • There would be no point in claiming for lost time as opposed to claiming for redundant expenses of the project. If indeed you could by chance claim for the lost time, the amount that you claimed would have to be included in your income as money earned. The result would be a self-cancelling plus and minus.

Comments are closed.