Question

A net operating loss can be used to reduce self-employment income.
a-true
b-false

Answer 1

A net operating loss cannot be used to reduce self-employment income.

A net operating loss can not be used to reduce self-employment income. The concept of net operating loss refers to when a business's deductible expenses exceed its taxable income, resulting in a loss for tax purposes. This loss can be carried forward to offset future taxable income, but it does not directly reduce self-employment income.