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If you have calculated a NOL from the prior year (Schedule A-NOL within Form 1045 Application for Tentative Refund from that prior year), and need to enter that amount on Schedule 1 (Form 1040) Additional Income and Adjustments to Income, Line 8, you can enter the amount in your TaxAct return following the steps below (Note. You will still be able to e-file your tax return).

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Business Income in the Federal Quick Q&A Topics menu to expand, then click Business income or loss from a sole proprietorship.
  3. Click + Add Schedule C to create a new copy of the form or click Edit to review a form already created.
  4. Continue with the interview process to enter all of the appropriate information.

If you have an allowed loss from Schedule K-1, the amount would be reported on Line 17 of Schedule 1 (Form 1040), based on the data you entered in the program for the Schedule K-1.

If the loss is not entirely used in the first year following the loss year, or if there are NOLs being carried forward from multiple years, see IRS Publication 536 Net Operating Losses (NOLs) for Individuals, Estates and Trusts to calculate the amount to enter on Line 8. Use the worksheet on page 8 (instructions on page 7) to calculate the amount to enter on Line 8. If there are NOLs being carried forward from multiple years, you must calculate each amount separately and then add them together to enter on Line 8.

Additional Information

IRS Publication 536 explains how to figure an NOL, when to use it, how to claim an NOL deduction, and how to figure an NOL carryover.

Examples of typical losses that may produce an NOL include losses incurred from the following:

  • Your trade or business
  • Your work as an employee (unreimbursed employee business expenses, although not deductible for most taxpayers in 2020)
  • Casualty or theft losses resulting from a federally declared disaster
  • Moving expenses (although not deductible for most taxpayers in 2020)
  • Rental property

A loss from operating a business is the most common reason for an NOL.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.

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