Last year, I worked for 2 companies, One as an employee and one as a contractor, I received a W2 from my "employer" and a 1099 from the other. I was able to deduct all my expenses against my 1099 income. This year:
All I received was a W2 from one employer because (no 1099): I started my own company, didn't really get going, so I made no money. I did spend a lot of time and money buying equipment, designing ads, , giving job estimates, etc. (I am still in business and will do well this year). I have an EIN number and state licenses. I've spent over 100 hours, and did more than 50% of the work (setting up the business). I believe this qualified my business as materially active (not passive, I forget the exact term). Can I deduct my expenses (?) against my W2 income?
I spent far more than I made, can I also carry over my loses for 2005? Please post reply here.
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