Where in turbotax can I add deductions for investment losses via Form 8949? I understand that I can deduct $3K of ordinary income every year and offset capital gains.

[neilsikka]

My accountant last year said that I can deduct $3K of ordinary income every year, and offset any capital gains. This corresponds to 1040 Schedule D line 10 and form 8949.

[VolvoGirl]

Do you have a carryover loss from 2020?

The way it really works is.......You get to first offset the loss against any gains you have each year so that can use more of it up.  Then after applying the loss to the current gains you can take a max loss of 3,000 (1,500 MFS)per year.  Turbo Tax does all the calculations for you.  Just enter the prior year carryover amount.

Enter a Capital Loss Carryover under

Federal Taxes or Personal (Home & Business)

Wages and Income

Then scroll down to Investment Income

Capital Loss Carryovers - Click the Start or Update button

You enter the full amount that carried over, not just the 3,000

Does that help?

[FangxiaL]

It sounds like you have some capital loss carryover from 2020. Your accountant is correct. You can use the carryover capital loss to offset your capital gain in 2021, and/or offset $3,000 ordinary income such as earned income.  

If you did not use TurboTax last year, you need to enter your capital loss carryover into TurboTax.

1. Open or continue your return
2. In the search box, type capital loss carryover and hit the Enter key, select the Jump to capital loss carryover at the top of the search results.
3. Use the 2020 Schedule D to enter the information.