Here is a link I found online when researching this same topic.  Hopefully it will help!

 

Julie

 

What I did with my other business when I was in the sam situation was to remove some of the expenses & not claim them.  I figured it was better than risking an audit with another loss.  I just removed expenses until the income was higher than the expenses.  It doesn't have to be a big profit...just so its a profit!!

Bev

My accountant said to me this year (2nd year with PC).  Next year you'll be showing a profit -- RIGHT?  I said yep, absolutely.  track all your expenses as you normally would, but then take some off like Bev said so you aren't actually showing a loss.  I don't want to take the risk of being audited -- my life is crazy enough as it is!

 

I do the same thing as some of the other gals...I don't claim all of my expenses if it looks like I will not be making a profit.  Been selling for about 5 years and my accountant told me that if you show a loss for about 5 years it might red flag you with the IRS.  Before I turn in my taxes I make sure I have made a profit :)