Do I Need to Manually Enter Prior Year Net Operating Loss (NOL) on Next Year's Tax Return?

Wency
Wency Member Posts: 1 Newcomer
in General

Hi all,

I had a business loss in 2022 that resulted in a negative taxable income, which I believe qualifies as a Net Operating Loss (NOL) carryforward. Do I need to manually enter that NOL on the following year's return (e.g., 2023), or does FreeTaxUSA (or other tax software) automatically carry it forward?

Specifically:

Should I be entering it on Schedule 1, Line 8a for my 2022 Loss on my 2023 Tax Return.

Also since I have filed extesnion for my 2024 return, I should print out the new Form 172 and mail in my tax return, is this correct?

Thanks in Advance!

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Comments

  • MatthewD
    MatthewD FreeTaxUSA Team Posts: 607

    Hi Wency,

    Although we support entering an NOL in our software, we do not support all the calculations or Form 172.

    The first step to determining if you have an NOL is to complete Form 172, Net Operating Loss (NOLs). When you enter the NOL in the software it will be placed on Schedule 1, Line 8a. And yes, if you have an NOL for 2022, then the carryover will go on the next year. In your case your NOL from 2022 will go on 2023.

    Keep in mind that you must complete a Form 172 each year to recalculate the NOL carryover.

    You may e-file your return with the NOL. Keep the Form 172 in your records with a copy of your return.

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