Where do I get the Net Operating Loss Number From?

[jblacksten]

I am filing my 2024 taxes and wanted to carry over a loss from 2023. I have actually had losses in previous years just never filed a net operating loss to lower my income before.

Since the number was not auto entered in TurboTax from 2023 I want to enter it but i do not know what number to use in my 2023 tax return. I thought I read somewhere you use your 2023 form 8995 and use the number in line 16. However now I can not find that advice anywhere in turbotax. I just want to make sure I am using the correct number. If I use line 16 on form 8995 it is much higher than the loss I had just in income last year. (business has not been doing well the last few years). Am I correct in using this number as my net operating loss carryforward for 2024 or can I only use last years loss that is found on my schedule 1. (Remember I have never actually claimed a net operating loss carry-forward deduction  in previous years so the number that is in my 2023 form 8995 line 16 is not accounted for in my 2023 schedule 1).

[ThomasM125]

A net operating loss is different from a Qualified Business Income (QBI) loss that you mention as reported on Form 8995. So you need to know which loss you are dealing with. A net operating loss (NOL) occurs when you have a business loss that is greater than your non-business income. The unused portion of it from one year can be carried over to be deducted from taxable income in future years.

A QBI loss is a business loss from a business that has QBI. It is carried over to offset business income in future years and in so doing it may reduce your QBI deduction in those years. It is not deductible against taxable income, it would simply reduce QBI income used to calculate a QBI deduction.

Your NOL carryover from a previous year would be the amount of your NOL that was not used up in that year. Your QBI loss carryover would be your unused business loss on businesses that qualify for QBI treatment.

Since you reference Schedule 1, I assume you are talking about an NOL. The carryover amount for that would be the NOL carryover from the previous year less the amount listed on Schedule one for the year in question. For instance, If your NOL carryover from 2022 was $50,000 and you reported $10,000 of NOL on Schedule 1 in 2023, your carryover to 2024 would be $40,000. 

Also, you can't pick and choose which year to carry a NOL loss over to. You must use it in the next year, and if there is any left over you can carry it over to the year after that, and so on.