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:
- I run my business and come away with a loss for the current year.
- 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.
- 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).
- On my 2021 taxes, I just enter what I have there - the full details, yes?
- 250K expense,
- 100K income,
- deductions,
- etc.
- 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).
- 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.
