While reviewing my return transcript from 2024, all the way at the bottom I see Qualified Business Loss Carryforward $36,806. It started in 2022 as $29xxx and in 2023, it increased by $7xxx.
If I pick 2022 tax return to review (its from my landscaping and w2 income), we see where the excess comes from as follows: SCH 1 1040 line 3: Business income or (loss). Attach Schedule C $-29xxx.
Form 8995 continues to show -$29xxx.
In 2023, what business/tax situation would need to occur to utilize any of the $29xxx listed as above?
As mentioned above, in 2023 it grew by another $7xxx. The business had another loss
At the end of the day, I'm just making sure that I don't have additional withholdings I'm due from 2023. It appears NONE of that carryover was used. Seems it wasn't even entered...
I keep reading how I might be able to apply the carryforward to the same business' income for the following year.
example, Business made $10K, had $15K in expenses. the extra $5K came off my w2 income. But if we use the same example, but use the carryforward to offset the $10K profit - Then the entire $15K of expenses from the w2 income; same way all losses offset all income in the current tax year.
A Qualified Business Loss can only be used to offset Qualified Business Income. So you will keep carrying it forward until the business makes a profit and then the carryforward loss will wipe that income out up to the amount of the loss.
Here's a great article on Qualified Business Income and what it all means.