If a return has generated a Net Operating Loss (NOL) in the current year, there will be a Green Alert in the return titled "Explanation: Net Operating Loss." The NOL amount will be reflected on Line 25 of Schedule A - NOL on page 3 of Form 1045 Application for Tentative Refund.
Instructions to review or modify the information and then print the schedule in the TaxAct® program are provided below, followed by information on how to elect to carry forward that loss and how to enter that loss in the following year’s return.
Review or Modify Form 1045 Schedule A-NOL
- Sign in to your TaxAct Online return
- Click Tools down the left to expand, then click Forms Assistant.
- Click to expand the FEDERAL Forms folder, then scroll down and click Form 1045 - Schedule A--NOL.
- Click Form to review the existing form, or click Delete, then click OK to confirm you wish to delete the form, schedule, document, or worksheet.
To print the schedule:
- Sign in to your TaxAct Online return, then open your return.
- Click Print Center down the left side, then click Custom Print.
- Check what you want to print (the top section lists individual forms and schedules) or (the bottom section lists documents received or worksheets). You may need to scroll down in the section to locate the items.
- Click Print, then click the PDF link. The item will appear in a PDF read-only format. At that time you can click the printer icon on the screen to actually print, or close the window without printing.
Note. If you are not able to print, you will need to click the View/Pay your return fees link to process the product fees prior to printing.
- Click Forms in the top left corner of the toolbar.
- Click to expand the Federal folder, then click to expand the Forms and Schedules folder.
- Double-click Form 1045 - Schedule A--NOL to open the schedule on the right side.
- Fields with a green entry (or 0) are where you can enter in that field. Fields with a blue entry (or 0) are either program-calculated fields, or if you click on the field and a yellow manila folder icon appears to the side, those entries are being transferred from supporting forms. Click the manila folder icon to view or modify the supporting form that populates that field.
- Click the Printer icon above the schedule to actually print the schedule. In the Print dialog box, you can send the output to a printer or a PDF document or just do a print preview of the schedule. Remember to uncheck/clear Print Preview when you do actually want the schedule to print.
Note. If there was any gain on the return excluded under section 1202 on the sale or exchange of qualified small business stock, that would need to be entered as a positive number on Line 17 of Schedule A-NOL.
Making the Election to Waive Carryback Period
To make the choice to only carry the loss forward you must attach a statement to the original return filed by the due date (including extensions) for the NOL year. This statement must show that you are choosing to waive the entire carryback period for the current year NOL under section 172(b)(3) of the Internal Revenue Code. With TaxAct you are able to electronically file your return and include this statement.
To make Election to Waive the Carryback Period and to include the NOL Election Explanation in your TaxAct return to be either paper filed or electronically filed:
- From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
- Click Miscellaneous Topics in the Federal Quick Q&A Topics menu to expand, then click Net Operating Loss (NOL).
- Continue with the interview process to enter all of the appropriate information.
Entering the Loss on the Following Year's Return
As any NOL in the current year has the potential to be carried back or forward, depending on the choices made by the taxpayer, the TaxAct program does not automatically calculate the amount to be carried forward to the following year in an import situation. You will still be able to electronically file your tax return.
To enter the calculated amount of the carried forward loss on Federal Schedule 1 (Form 1040) Additional Income and Adjustments to Income, Line 8 in the TaxAct return:
- From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
- Click Other Income in the Federal Quick Q&A Topics menu to expand, then click Net Operating Loss (NOL) Carryforward.
- Continue with the interview process to enter all of the appropriate information.
- On the screen titled Net Operating Loss Deduction, enter the appropriate NOL deduction amount from your calculations on Form 1045 that is to be carried forward to the current year, then click Continue.
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, to calculate the amount to enter on Federal Schedule 1 (Form 1040), Line 8, see IRS Publication 536 Net Operating Losses (NOLs) for Individuals, Estates and Trusts. Use the worksheet on page 8 (instructions on page 7) to calculate the amount to enter on Federal Schedule 1 (Form 1040), 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.
Note. If you import your information to the following year in the TaxAct program and do not enter an amount of carryforward loss, you will see a Green Alert "Error or Omission: NOL Carryforward" warning you that last year you indicated you were carrying forward the loss but there is no amount entered for Federal Schedule 1 (Form 1040), Line 8 in the current year.
Additional Information
- Form 1045 Application for Tentative Refund
- Form 1045 Application for Tentative Refund Additional Forms
- Form 1045 Schedule A--NOL(form listed in the previous instructions)
- Form 1045 Schedule B--NOL Carryover
- Form 1045 Net Operating Loss Classification Worksheet
- Form 1045 Detail and Notes - Detail and Notes Worksheet
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.