Are Sole Proprietor Losses Automatically Subtracted From W2 Income?
I started a business as a sole proprietor in November 2021. Two Questions:
(1) My understanding is that I can count (as start-up costs) expenses incurred in all of 2021 as I prepared to start my business (e.g., books I purchased to prepare myself, training I undertook, etc.). Is this correct?
(2) Assuming I am correct for #1, my business expenses for 2021 will exceed my revenue - and so I'll have a small loss. I am married and filing jointly, and my spouse has W2 income. Will TurboTax Home and Business (Desktop version) automatically subtract my business loss from his W2 income? Or will it save the business loss and deduct it from my business income on my 2022 return?