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Sure i was self employed during 2016 and had a neg 23k

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Sure i was self...

Sure i was self employed during 2016 and had a neg 23k adjusted gross income. I went out of business in Dec 2016. I have been gainfully employed since may of 2017. How can that loss be used to offset my 2017 tax return?

Submitted: 4 months ago.Category: Tax
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3/27/2018
Tax Professional: Lev, Tax Advisor replied 4 months ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,320
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If your deductions for the year are more than your income for the year, you may have a net operating loss (NOL).

An NOL year is the year in which an NOL occurs.

You can use an NOL by deducting it from your income in another year or years.

Generally, if you have an NOL for a tax year, you must carry back the entire amount of the NOL to the 2 tax years before the NOL year (the carryback period), and then carry forward any remaining NOL for up to 20 years after the NOL year (the carryforward period).

You can, however, choose not to carry back an NOL and only carry it forward. That choice must be made on timely filed tax return.

If you have not already carried the NOL to an earlier year, your NOL deduction is the total NOL. If you carried the NOL to an earlier year, your NOL deduction is the carried over NOL minus the NOL amount you used in the earlier year or years.

.

If you carry forward your NOL to a tax year after the NOL year, list your NOL deduction as a negative figure on the “Other income” line of Form 1040 or Form 1040NR (line 21 for 2017).

You must attach a statement that shows all the important facts about the NOL. Your statement should include a computation showing how you figured the NOL deduction. If you deduct more than one NOL in the same year, your statement must cover each of them.

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Tax Professional: Lev, Tax Advisor replied 4 months ago

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