NOL Screen - what's it asking for?

[username333]

Can anyone help me understand what this is asking for?

I mean, I know it's an NOL and I know what an NOL is and that I had one last year. But I imported my prior year ('21) return, so shouldn't that number be included? I checked the form this ties to and the number is be entered on the 2021 column.

For some reason I thought I would be entering my 2022 NOL carryover, which would be my 2021 NOL carry over reduced by my (2022 income - 2022 deductions - 2021 NOL) no?

Should I just find this on my 2021 return and enter it? I'm not carrying the 2021 NOL back at all.

@Mike9241  You get this NOL stuff pretty well, don't you?

[Mike9241]

did you use schedule A of 1045 to figure your NOL for 2021.  its possible to have a business loss but not have an NOL because of other income.   Turbotax as far as I know doesn't compute NOL carryovers so its for you to figure and then enter in the appropriate box

for AMTpurposes use line 4 of 6251 for line 1 of schedule A  

you do not reduce 2021 NOL for 2022 net income that's only done when computing if you still have some NOL left over to use in 2023 again using schedule A of form 1045. 

[username333]

Thanks for your reply!

I used the 2021 Pub 536, Wkst 1 and 2 to figure my 2021NOL. As far as I could tell, it's the same math as Sch A of the 1045.

You're right that TT doesn't compute any carryovers.

How does this work? Say:

1. I run my business and come away with a loss for the current year.
   1. eg: Say it's 2021 and I spent $250,000, but made $100,000. I take the single standard deduction of $12,550. No other income or losses.
   2. So: $100K income minus $250K expenses minus $12,550 deduction = 2021 NOL of $162,550  (I know the math is more involved than this and I should use the Sch A or Pub 536 to find the instructions and worksheets).
2. On my 2021 taxes, I just enter what I have there - the full details, yes?
   1. 250K expense,
   2. 100K income,
   3. deductions,
   4. etc.
3. Then, in 2022, say I turn a profit of $60,000, but I didn't clear that extra $162,550. So I don't have an NOL for 2022, but I do have a carryover NOL from 2021 that I can use to offset my profit, and reduce my 2022 tax bill to zero (zero in this case bc $162,550 is a deeper hole than the ($60K minus deductions) can fill).
   
   1. So I use Sch A or Pub 536 to whittle down that $162,550 NOL by my profit of $60,000, my deductions, AND THEN I plug that number back into the screen shown above? Is that how you understand it?

I guess I'm asking, "Is the screen shown  asking for my 2021 NOL carryover plus or minus anything I made or lost in 2022 (as determined by the 2022 Sch A / Pub 536)?"

Sorry. Maybe that's obvious? Idk. I can't seem to wrap my head around it.

[RobertB4444]

It's cool.  This stuff gets complicated.

First, do your tax return as if you didn't have an NOL.  Just enter all of your business income and expenses.  Then you'll go to the "Other Tax Situations" section and click start next to Net Operating Loss and enter the NOL from 2021 there.  

That will reduce your income to zero but keep in mind that it will not reduce your tax bill to zero.  An NOL can only be used to reduce your income, it has no effect on self-employment taxes.  If you had a profit in 2022 you will still owe self-employment tax on that profit even if your net income on the return shows as zero.

@username333