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How does he write off expenses if he has no income?

He doesn't: It's too bad you don't have any income, because if you did, you could write off all kinds of startup expenses as a business expense. (emphasis added)

Doh! I feel stupid now, I was keying off the last sentence. Thanks for stepping down to my current mental level :)

Can't you carry forward losses into future years?

If you can demonstrate that your business is in fact a business and not a hobby. This isn't too difficult if it is, in fact, a business: you prove it was conducted in a businesslike fashion (or just make a profit on it next year).

Not sure why the downvote, this is an honest question. What is the purpose of writing things off when you have no income, or so little income that you have no tax liability or the alternative minimum tax is enough to give you no liability?

I think the idea is that he is wasting the opportunity to make some tax free income. Any work that he could have done for X amount of dollars would have been compensated at full rate instead of market rate minus tax liability, given X does not exceed his deductible expenses.

AFAIK, the alternative minimum tax applies to high incomes. Maybe you were referring to wages below the standard deduction?

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