If you are self employed and had a loss for tax purposes in your latest tax year, the loss can be used to reduce other income on your tax return. The loss from self employment may be a business loss, or it may be a property loss, such as from a rental.
If you had no other income against which to offset this loss, you can carry back this non-capital loss to any of the prior 3 taxation years. To do this, you have to file a form T1A, “request for loss carryback”.
When tax software is used to prepare your tax return, the request for loss carryback can be completed and filed as part of the tax return.
Reprinted with permission from TaxTips. The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.