How do I report a business loss or carryover from my K-1?

When you prepare your tax return with TurboTax, the software automatically tracks and carries over your QBI business losses to the next year’s tax return.

The QBI deduction is based on net income, so if your business had a net loss, you don't qualify for the QBI deduction for that year. A net loss gets carried over to the next year’s QBI calculation, and is used to offset any future year's QBI income for your K-1 business.

In other words, when the QBI deduction is calculated, your current year’s QBI is reduced by any losses from the previous year. This is called a loss carryover.

If you are preparing your return for the first time in TurboTax, you’ll need to indicate that you have carryovers from the prior year, and manually enter those amounts.

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