I have earned income, social security income, and net business loss from a startup. Does the business loss need to bring AGI to zero before carrying over? Or can I carry over all business loss so it doesn't bring AGI to zero?
I would want to take advantage of the standard deduction and also a tax credit which would require a tax liability.
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The simple answer is that you cannot make that choice.
You have to recognize a net operating loss (NOL) in that tax year in which it was incurred.
you must use in the year it occurred your business loss to the extent allowed by law. if it is large enough, it can make the entire amount of Social Security benefits tax-free. $0 is included in computing AGI.
you can use the worksheet in PUB 536 to calculate your NOL. Wages are business income
https://www.irs.gov/pub/irs-pdf/p536.pdf
or schedule A of form 1045
https://www.irs.gov/pub/irs-pdf/f1045.pdf
an NOL is the excess of business losses over business income
reduced by the excess if any by the excess of nonbusiness income over nonbusiness losses.
I have seen no worksheet in Turbotax that computes your NOL, if any, for you.
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