NOL

[monica38]

Hi

I have turbo tax deluxe online and this year is the first time that I have a loss for my business! I would like to carry forward in 2023.

Do I need to do any calculations for the NOL for this year or is automatic?

[Mike9241]

no calculations ar needed for 2022 since carryforward is now the only option. however, in 2023 you should use schedule A of form 1045 to calculate the NOL c/f. Turbotax does not do it.  

[monica38]

Hi

thank you so much for your response but in 2022 I don't have form 1045 I only have 1040 .

How do I calculate the NOL in 2023?

[monica38]

Hi

thank you so much for your response but in 2022 I don't have form 1045 I only have 1040 .

How do I calculate the NOL in 2023?

ReplyMark as Best Answer

[AliciaP1]

If you are reporting a loss on your Schedule C in excess of your other active income, TurboTax will simply zero out your self-employment income.  You will need to track yourself what carryover you will need to input into your 2023 returns.  Remember, if your business has QBI and is now calculating a loss for 2022, this will create a loss carryover as well.

If your business has a loss, but you have other active income (like a W2 from another company) the loss will be deducted from that income as required in 2022.  The QBI loss will not be offset by income until you have QBI again.  So, say you have W2 income of $5,000 in 2022 and an NOL of $15,000 and a QBI loss of $15,000.  Your NOL carryover will be $10,000 (15,000 - 5,000) and the QBI loss carryover will still be $15,000.  If these are the only 2 items of income you are reporting on your 2022 taxes, your AGI will be $0.

@monica38 

[monica38]

Hi Alicia 

I don't have a schedule C.

In my personal taxes I have K1 from my 2 business and because one of them was a start up I had a loss in 2022.

I have form 8895 with QBI LOSS from this business.

is all this calculate in automatic in turbo tax for 2022 and the carryover for the 2023? or do I need to calculate it?

[Mike9241]

can't tell you that you'll have a QBI or even an NOL carryover. they differ. you say you have 2 businesses. did the one that was not the start-up have a profit? if so, it is probable that the profit from that one and the loss from the other would be netted for both NOL and QBI purposes.  if the result is net income, there would be neither an NOL or QBI carryover.   if the start-up loss exceeded the others profit, then you would likely have a QBI loss carryover.  as to an NOL that's a different matter and Turbotax does not calculate NOLs

the short version of how to compute a year's NOL is the excess of business losses over business income reduced by the excess of nonbusiness income over nonbusiness expenses, if any.  to do it yourself i suggest schedule A on form 1045 which is for the purpose of computing NOL. 

https://www.irs.gov/pub/irs-pdf/f1045.pdf 

pub 536 worksheet 1 can also be used to calculate NOL

https://www.irs.gov/pub/irs-pdf/p536.pdf