Are net operating losses bad?
Certainly, a business loss isn't as good as a profit, but you can use a loss to offset other income on your tax return. A net operating loss in one year may be limited, but the IRS allows businesses to move these losses to offset gains (profits) in later years, through a process called loss carryforward. Because business profits and losses fluctuate from year to year, this process can help you even out taxable income over several years. For example, you could have a loss of $100,000 in one year and carry that loss over to several future profitable years to reduce your taxes in each of those years until the full amount of the loss has been taken.