Inflation Adjustments for Form 461

As discussed on pages 50 to 52 of the Tax Year 2018 M+O=CPE Individual Tax Year-End Workshop Reference Book, effective for 2018 and later tax years (and scheduled to expire after 2025), non-corporate taxpayers are limited in the amount of business losses that can be deducted against other income on the individual income tax returns.  The limit is computed on Form 461, Limitation on Business Losses. 

The dollar limits for losses on Form 461 for the 2019 tax year have been increased for inflation.  The limits are now $510,000 for married couples filing a joint return and $255,000 for all other taxpayers, up from the limits which applied for the 2018 tax year, which were $500,000 and $250,000, respectively.