The Challenge: A high-earning W-2 employee started a consulting side business. In year one, the business operated at a loss due to heavy startup costs (website design, legal fees, software). They didn’t realize they could use this to their advantage. The Moorhead Financials Solution: * We properly classified their side hustle on a Schedule C, capturing up to $10,000 in first-year startup deductions.
- We used this business loss to offset their high W-2 income. The Result: By leveraging their business expenses against their day-job withholdings, we secured a $5,900 IRS tax refund.