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gimmechicken
New Member

I have a net operating loss for my LLC, but married, filing jointly, with net positive income. Does NOL apply only if business operating expenses surpass total income?

I have a sole member LLC which operated in 2016 with a net loss. I am married, filing jointly. My husband's income is greater than the net loss from my business, meaning that in total we are at a (low) net positive income.

Can I, and should I, file for Net Operating Loss? Or is that only applicable when the entire 1040 income amount (Line 41) is a net negative?

Thank you!

1 Best answer

Accepted Solutions
DS30
New Member

I have a net operating loss for my LLC, but married, filing jointly, with net positive income. Does NOL apply only if business operating expenses surpass total income?

Yes, you are correct. You cannot claim a personal NOL related to your LLC losses if you are able to offset your LLC's net losses (as a disregarded entity on Schedule C) against other ordinary income (like your husband's wage income).

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5 Replies
DS30
New Member

I have a net operating loss for my LLC, but married, filing jointly, with net positive income. Does NOL apply only if business operating expenses surpass total income?

Yes, you are correct. You cannot claim a personal NOL related to your LLC losses if you are able to offset your LLC's net losses (as a disregarded entity on Schedule C) against other ordinary income (like your husband's wage income).

View solution in original post

Inspiredhealthllc
New Member

I have a net operating loss for my LLC, but married, filing jointly, with net positive income. Does NOL apply only if business operating expenses surpass total income?

My husband also owns an LLC and will likely report a net loss of approx $5,000 this year.  I on the other hand will report $78,000 in gross income for our household. In this situation, would my husband report a taxable income of $0 for this year? 

Critter
Level 15

I have a net operating loss for my LLC, but married, filing jointly, with net positive income. Does NOL apply only if business operating expenses surpass total income?

@Inspiredhealthllc 

 

You have to stop thinking his & mine ... on a joint return there is only ours.   So his LLC income is reported on the Sch C on the same form 1040 as all your other joint income and the Sch C loss is netted against the other income .... just review the form 1040 to see how this happens naturally. 

onemoment
Level 2

I have a net operating loss for my LLC, but married, filing jointly, with net positive income. Does NOL apply only if business operating expenses surpass total income?

I have a similar question: For example. I have a single-member LLC that has NOL of 20k in 2020. My husband has a salary of 80k. So the 20k NOL will reduce our overall taxable income for the year 2020 and there will be no NOL carryover for the future. Is this correct understanding? thanks

AmyC
Employee Tax Expert

I have a net operating loss for my LLC, but married, filing jointly, with net positive income. Does NOL apply only if business operating expenses surpass total income?

@onemoment Excellent! Yes!!! IF your LLC is filed on a sch C with his wages all together on a 1040, your loss reduces family income. Nothing to carry over as a loss.

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