Carryforward Strategy

Carryforward Strategy: A tax planning approach that allows taxpayers to utilize unused tax attributes, such as losses, credits, or deductions, in future tax years. This strategy is particularly useful for offsetting future taxable income, thereby reducing overall tax liability.

For example, if a business incurs a net operating loss (NOL) in one year, it can carry that loss forward to offset taxable income in subsequent years, effectively lowering the tax burden when the business becomes profitable.