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If your business was started in 2008 - you will report your business income and expenses on the schedule C with your 2008 tax return. - http://www.irs.gov/pub/irs-pdf/f1040sc.pdf - this is 2007 form for reference only because 2008 form is not available yet.
On the line 31 you will calculate your total income/loss - as you are expecting a loss - the result will be negative. That amount will be reported on your 2008 tax return - form 1040 line 12 - http://www.irs.gov/pub/irs-pdf/f1040.pdf - as it will be negative - it will reduce your total adjusted taxable income and reduce your tax liability.