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

by TurboTax•646• Updated 3 months ago

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.

Select your product for instructions.

  1. Go to the 2023 Net Operating Loss screen.
  2. Enter the carryover amounts.
  1. Open your return.
  2. Select Federal Taxes, then Wages & Income.
  3. On the How do you want to enter your income? screen, select I'll choose what I work on.
  4. Under Business Items, select Start next to Business Deductions and Credits.
  5. Select Start next to Business Loss Carryovers (NOL,QBI).
  1. Open your return.
  2. Select Business, then Business Income & Expenses.
  3. On the How do you want to enter your business income? screen, select I'll choose what I work on.
  4. Under Less Common Business Situations, select Start next to Net Operating Loss/QBI Carryforward Loss.