NOL carryforward

[JPSUN]

I am filing tax year 2021 now with TT home and business. I have a NOL of 79,000 from 2019/2020. I know that carrying it forward continues for several tax years until it is all used up so my question is do I put the total 79,000 as my NOL or only the amount I am using this year? 

[tagteam]

Enter your NOL in the Less Common Business Situations section (click Start to the right of Net Operating Loss/QBI Carryforward Loss).

[JPSUN]

Yes, thank you, I know where to enter it. I am asking do I enter the total 79,000 as that is what has been carried forward from the two previous years or can I enter only the amount I am going to use this year. I cannot seem to find any information on this. 

[tagteam]

Enter your total NOL ($79,000).

[JPSUN]

Thank you. Do I do anything else? How does the unused portion get calculated to be carried forward after that? When I put the full amount in I don't see anything on the forms for a new balance. Also, its more than my income for the year so it says I have to file a paper return, never had that happen before. 

[tagteam]

TurboTax will not calculate an NOL so you need to calculate that manually.

See https://www.irs.gov/publications/p536

[ErnieS0]

TurboTax does not support net operating loss calculations so you will have to keep track of your unused NOL and calculate the amount yourself each year and enter that amount in TurboTax.

For more information about NOLs see IRS Publication 536

[JPSUN]

Why is it there on my previous years taxes carrying over then? I have used TT for over a decade and the NOL is there on the last few years and it shows what years its from. 

[JPSUN]

Okay so I will put the 79,000 which is the total NOL from the previous years carried forward since I had never used it. I don't have to though right? I can just keep carrying it forward? 

But if I do use it, if at the end it says my income is negative 34,000 now is that what I would put next year as my NOL? I tried to read the publication but I need a for dummies version.. 

[DianeW777]

When a net operating loss (NOL) is initially entered TurboTax will incorporate that into the current tax return once you have completed the NOL worksheet(s).  It will also know if any of the NOL was used on your tax return.  What TurboTax will not do is to calculate an NOL.

• IRS Publication 536

When this initially occurred, then the NOL worksheet was required to be prepared and depending on the year, you had an option to carryforward or were required to carry it back. 

Here's how to enter a 2020 NOL carryforward in TurboTax:

1. Do a Search (upper right) and enter "nol" 
2. Click on the "Jump to....." link
3. Enter your NOL on the screen that appears

Note. As our Tax Champ @tagteam indicated through a test, the NOL must still be calculated and entered into TurboTax each year. Use the IRS publication to access the worksheets.

When To Use an NOL

Generally, if you have an NOL for a tax year ending in 2020, you may carry back the entire amount of the NOL to 5 years before the NOL year (carryback period), and carry forward any remaining NOL indefinitely (the carryforward period).  

Waiving the Carryback Period

You can choose not to carry back your NOL. If you make this choice, then you can carry your NOL forward indefinitely until it is fully absorbed.

To make this choice, attach a statement to your original return filed by the due date (including extensions) for the NOL year. This statement must show that you are choosing to waive the carryback period under section 172(b).

If you filed your original return on time but did not file the statement with it, you can make this choice on an amended return filed within 6 months of the due date of the return (excluding extensions). Attach a statement to your amended return, and write "Filed pursuant to section 301.9100-2" at the top of the statement.

Once you choose to waive the carryback period, it is generally irrevocable. If you choose to waive the carryback period for more than one NOL, you must make a separate choice and attach a separate statement for each NOL year.

Note 2: In 2017, TCJA changed the NOL rules by:

1. limiting NOL deductions to 80% of taxable income,
2. disallowing NOL carrybacks, and
3. lifting the 20-year limit on NOL carryovers.

In 2020, the CARES Act temporarily – and retroactively – changed the NOL rules again.

More information can be found in the IRS publication linked above.

@JPSUN 

{Edited: 02/21/2022 | 2:13p PST]

[tagteam]

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@DianeW777 wrote:

Note, if you did your taxes last year with TurboTax and generated an NOL carryover, then in many cases, TurboTax will carryover the NOL automatically to the next year.

---

@DianeW777 

I have tried the NOL carryover from a 2020 return to a 2021 return in a test 1040 with Home & Business.

Although the AGI shows up as negative in the Carryover Worksheet, the NOL does not. Thus, I believe the NOL still needs to be calculated and entered into the program as an NOL Carryover.

[JPSUN]

well that's fun because I did not attach a statement any of the years the loss was generated, I just filed my taxes through TT like I have every year for probably 20 years now. 

[JPSUN]

I used home and business for 2020 and imported into 2021 home and business and on the schedule 1 the NOL is there and on the other forms that calculated and they do for sure show up as being negative.. It actually shows 2019 negative and 2020 negative and says which amount is from which year. 

[DJStar]

Thank you so much for this info on where to put it! Would you also be willing to let me know how to figure it? I've used Premier Desktop for years. This is my first year using it on a Mac. Is it in the suggestion box for TT to figure this for us? Or at least like some folks had mentioned to bring it up somewhere? That did not happen for me and I've been all the way through the Smart Check.

[DJStar]

Well, I decided to do recon while I was waiting for your reply. When I typed in the search bar "Less common business situations"  this is what came up:

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•25•Updated 1 month ago

With more people working from home over the past year, this tax season has brought on some new changes and special requirements. If you notice that your W-2 ...

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•17•Updated December 23, 2021

Your child must submit their own tax return if they earn a certain amount of income during the year. Even if they're not required to file, ...

Why is that?

When I typed in Net Operating Loss Carry forward and got those same two above! But I found below that something from 2017 that says: "If you have a Net Operating Loss there are some computations that have to be made each year, and that amount has to be manually carried forward." So I'm on the trail but don't know which way to go.

Thanks for your help earlier! I also appreciated learning about the "Like" thing. I'll do that. But how do I do the "Best Answer" thing?