Need more details on my initial Q about Form 8995, plus other questions in order tobuy/use TurboTax this year instead of a CPA.

[A-H]

Per my previous question about Form 8995:

How many years can I carry forward the loss from line 16 on Form 8995, to go toward business expenses in the future? If I have minimal business expenses (~$350) for professional licenses and CEUs, with no business income, I’m not sure it’s worth it/feasible to file a Sched C to show those expenses, and any other associated forms (no deduction for home office use, since I didn’t have a business income), would I be able to use the loss from line 16, form 8995? And what does the $0 mean on line 17? Could the amount on line 16 be from several years of business losses greater than business income, since I can’t find where the loss listed on my 2020 tax return would be from 2020 alone? Looking back to 2019, there was also a “carryover” loss on line 16 Form 8995, a little less than the amount on 2020 form, and am not sure where those numbers are coming from, even though I have detailed spreadsheets I’ve made of my business income each year.

Also, since I want to do my taxes on my own this year, via TurboTax, is there a special form I need to use for unemployment income? (Sched 1 was used last year, for the special UE deduction.) Not sure which TT to buy, please advise: I will need Sched. D, Sched B, Form 1116? (foreign taxes-my CPA completed also completed this form for alt. min. tax, and I am not high income, so what is this for?), a taxable pension, unemployment compensation, and am not sure if I’ll need the SE forms: Sched C and 8995?, depending on your answer, and whether or not to claim the loss on my business expenses, since there’s no business income. Thanks in advance!

[GeorgeM777 · Accepted solution]

The Qualified Business Income loss (that is, the loss on line 16 of Form 8995) carries forward to the succeeding year and is treated as arising from a separate trade or business. Those losses carry over indefinitely until completely offset by positive QBI.

Line 17 on Form 8995 relates to Real Estate Investment Trust (REIT) dividends and publicly traded partnership income/loss.  Because you have a zero on line 17, you must not have any REIT dividends or income from a publicly traded partnership.

There is no special or unique type of form you need to record your unemployment compensation.  TurboTax has all of the forms you will need.  Given that you appear to need Schedule B and Schedule D, you will likely need TurboTax Premier to prepare your return.  If you choose to file a Schedule C, then you will need TurboTax Self-Employed. 

Given that you may not have determined at this time what forms you will need, here is a suggestion.  Start with TurboTax Basic Online, and as you go through the application, TurboTax will alert you as to when you will need to upgrade based on the type of income you wish to add.  

Lastly, whether you should file a Schedule C, Profit or Loss From Business, is a decision beyond the scope of the type of advice we can provide.  Only you can make that determination.  Generally, if a taxpayer has a business in which they intend to make a profit, and there is a profit or loss, the taxpayer will typically file a Schedule C, along with any other relevant tax forms.

[A-H]

Thank you for your answers. I have been looking over my 2019-2020 Tax returns and even the amount of "carryover loss" from the 8995 from 2018, and it is quite confusing. Looks like there's carryover, but can't find it being used on subsequent returns. I had SE income in 2020, but it only reflects the Schedule C income (after Sched C deductions) of approx $900. The QBI Deduction Form 8995 showed a carry over of a loss amount greater than 4k on line 16, but line 14 showed an "income limitation" of an amount less than $1000, so which number would be used? I can't seem to find anywhere that the QBI amt was used to subtract the approx. $900 from my SE profit in 2020. This may be too detailed, but am trying to learn how this is done to do this w/TT from now on.

Were you saying that if I don't use the Sched C or other SE forms this year, I would still be able to use the QBI loss another year, when starting my business back up? If so, I'm not sure how the carryover will still work, if I don't file the Sched C/8995 this year, since there was no SE income for 2021. If I don't file the 8995 form, how will TT know there is a carryover going forward? 

Also, if I purchase the online TurboTax from an office supply store (they have a coupon I can use), I don't think I can start with a lower form of TT and add forms as I go. Will I be able to get "Live" help if I get the online version of TT from an office supply store? Thank you for your help!!

[GeorgeM777]

You indicated that you had a 2018 QBI carryover loss, and further that you had a Schedule C profit of $900 for 2020.  Did you have any Schedule C profit in 2019?  Take a look at the return for 2019 and follow-up with information regarding the QBI loss carryover, if any, and any profit from your Schedule C business.  

The below link will take you to the TurboTax website that compares the four different TurboTax CD products, namely, Basic, Deluxe, Premier, and Home & Business.  As you scroll down the columns under each product heading, at the bottom you will see "Learn More" and "View Forms."  If you click on View Forms you will see the list of tax forms that can be prepared using the particular TurboTax product.  Form 8995 is available in all versions of TurboTax listed on this page.  

To use and purchase the online version of TurboTax is done through the TurboTax website.  The online version is not purchased from an office supply store.  You can purchase the CD version of TurboTax from authorized retailers, such as Walmart and Target.   Live Help is only available through the online version of TurboTax. 

Which TurboTax CD Product Is Right For You

[A-H]

Hi George M,

I had a carryover loss of just over $400 in 2018 and a loss of over $3700 in 2019. I did not have SE income in 2019 due to medical and other issues, but did have career-related training, CEUs, licensing fees, which added to my business losses, so both of those totals result in a carryover loss of a little over $4000. In 2020 I did have SE income of over $5,000, working from home. After my Sched C business expenses were subtracted from the SE income, the taxable amount left just over $900.  I did have a deduction for use of home office, and looks like the “Business Use of Home” was approx. $1300 (line 26) and subtracted the 900 amt (line 27) from that, leaving $484 left over on Part IV, #43. I can’t find where else the $484 would be listed, just that it’s “Carryover of Un-allowed Expenses to 2021”.  

Looking at the Form 8995 QBI, it shows that there is a carryover just over $4000, listed on #3 for carryover from prior year, which is actually the totals of the carryovers from 2018 and 2019. How can I use this carryover / save it for another year, if I do work again as a self-employed person?  

On another topic, I did make a Trad. IRA “conversion” to Roth around 12/20/2021. I am over 59.5 so can do that without penalty, but was not advised to pay estimated taxes by Jan. 15 for estimated taxes. Will that be something I could be penalized for? It will already be an expensive tax-$ event for me by moving to it a Roth, but wanted to use the higher standard deduction we have during this time. Anything I can do if there was a requirement for that? Thanks again!!

[GeorgeM777]

While the QBI loss will carryover indefinitely, it can only be used to offset QBI income.  Thus, without any QBI income, the QBI loss is held in abeyance.  Assuming you still have a QBI carryover and need to enter it into TurboTax, here are the steps to follow:

1. Go to Federal Taxes, and then click on Wages & Income
2. Scroll down the page and look for Other Business Situations
3. You should see Net Operating Loss/ QBI Carryforward Loss.
4. Click on Start or Revisit, and enter the relevant information 

The late estimated tax payment for the IRA distribution and subsequent contribution to a Roth may result in a penalty.  You will know what the penalty amount is after you finish entering all of the information about this distribution and contribution.  When you are ready to begin entering your IRA distribution and subsequent contribution to your Roth, here are the steps to follow:

1. log in to your Turbo Tax account
2. click on "take me to my return"
3. click on the "federal taxes" tab
4. click on "wages and income"
5. choose "show more and "see list of all income"
6. scroll down to "retirement plans and social security"
7. click on "start" next to "IRAs, 401(k), etc"
8. enter the information for your 1099R
9. Turbo Tax will ask you questions about your Traditional IRA distribution
10. When you reach the screen that says, "what did you do with the money?", choose the option that says, "I moved the money to another retirement account"
11. After you choose this option, another set of options will appear:
12. If you converted the entire distribution to a Roth IRA, choose "I converted all of this money to a Roth IRA"
13. If you only converted some of the distribution to a Roth IRA, choose, "I did a combination of rolling over, converting, and cashing out the money." If you choose this option, Turbo Tax will ask you to identify how much of the distribution was converted to a Roth IRA, and how much of the distribution was rolled over into another retirement plan.
14. Next you will the screen that says, "your 1099R entries". Scroll down to the bottom of the page and click "continue". Turbo Tax will ask you more questions and you will need your 5498 Form for your Traditional IRA. A year end statement might also provide the necessary information. 

[A-H]

Thanks!  I just took out a portion of it so as to not to put me up into the 22% tax bracket (will be in the 12% bracket) - Just did a conversion, not a distribution or rollover. The conversion amt went completely into the Roth, none cashed out, but will need to pay taxes on it. I will look at what you wrote in more detail, but wanted to get back to you before this forum ended. If you have more info on this, it is greatly appreciated! Thanks so much!!