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Just want to clarify something that nobody has mentioned yet - if your single member LLC elected to be taxed as an S-Corp instead of a disregarded entity, the NOL process is different. In that case, the loss is reported on Form 1120-S, but doesn't directly create an NOL. Instead, it reduces your stock basis, which affects how much you can take out of the business tax-free in the future. S-Corp losses don't generate NOLs that carry forward to your personal return the way Schedule C losses do. Make sure you know how your LLC is classified for tax purposes!
That's a really important distinction. How can you tell if your LLC is being taxed as an S-Corp vs a disregarded entity? I filed paperwork when I started my business but honestly don't remember what I selected.
You can tell by looking at what tax forms you've filed in the past. If you've been filing Schedule C with your personal tax return, then your LLC is being treated as a disregarded entity. If you've been filing Form 1120-S and receiving a K-1 from your business, then you elected S-Corp treatment. If you're still unsure, you should be able to check with the IRS. You would have filed Form 2553 to elect S-Corp status. If you never filed that form, then you're most likely a disregarded entity by default. This distinction is crucial for understanding how losses flow through to your personal taxes.
Has anyone actually carried forward a NOL recently? I had a $7,300 loss in my consulting business last year and tried to use it this year, but TurboTax kept giving me errors about "TCJA limitations" or something. Apparently the rules changed with the Tax Cuts and Jobs Act?
Yes, the rules definitely changed. Starting with tax years after 2020, NOLs can only be carried forward (not back, except for some farming losses). Also, you can only use the NOL to offset up to 80% of your taxable income in any future year. So if you made $10,000 this year, you could only use $8,000 of your NOL, and would have to carry the rest to future years.
Thanks for explaining that! That makes sense why TurboTax was limiting how much I could claim. So I'll have to carry forward part of my loss to next year too. Wish they'd make these tax rules simpler to understand.
11 Hey, international student advisor here! This happens nearly every tax season with our students. While your return will still be processed as others have mentioned, there's one more thing to consider: timing. Returns sent to the correct processing center are typically processed faster. For future reference, nonresident aliens should send their Form 1040-NR to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 But don't worry about this year's return - just note it for next time. The IRS deals with millions of pieces of misdirected mail every year.
7 Is there any negative consequence beyond just delay? Like, would this be considered a filing error that could cause problems for visa renewal or anything? I'm on F1 too and realized I might have made the same mistake.
11 There are no negative consequences for your visa status. This is strictly a processing issue, not a compliance issue. The IRS doesn't report this type of administrative error to USCIS - they simply forward the return to the correct department. Filing your taxes (even if sent to the wrong address) shows you're attempting to comply with U.S. tax laws, which is what matters for immigration purposes. Just make sure you've filed Form 8843 along with your 1040-NR, as that's required for all F1 students regardless of whether you had income or not.
3 Pro tip for future filings: Use USPS Certified Mail with Return Receipt when sending anything important to the IRS. Costs under $10 and gives you proof of delivery. Saved me so much anxiety when I was on F1!
9 Have you tried looking at your previous year's state tax return to compare? Sometimes seeing what was different between last year and this year can help identify the issue. Also, different tax software can give different results based on how questions are asked and how information is entered. It might be worth trying a second software just to compare results.
16 That's a good point about different software. I've actually gotten different results between TurboTax and H&R Block before. Which tax software do you think is most accurate for state returns specifically?
9 I've found that TaxAct and H&R Block are both pretty good for state returns. Each software has its strengths, but the questions they ask can sometimes lead to different deductions being found. As for accuracy, they all use the same tax laws and formulas, so technically they should all give the same result if you enter identical information. The differences usually come from how they guide you through the process and what deductions they help you discover.
21 Make sure you're filing as a resident for the right state! I accidentally filed as a full-year resident for a state I had moved from halfway through the year, and it made my state taxes MUCH higher than they should have been. If you moved during the tax year, you might need to file part-year returns in multiple states.
11 This happened to me too! I moved from California to Arizona and filed full-year for both states accidentally. Ended up paying double taxes until I figured it out and filed amended returns.
Have you tried the IRS2Go app? It's actually way easier to use than the website. You can make payments directly from your bank account or by debit/credit card. I used it to pay my tax bill last month and it took less than 5 minutes.
I didn't even think about using the app! Is it available for both iPhone and Android? And do I need to create an account first or can I just download it and pay?
Yes, it's available for both iPhone and Android. You download it from your app store for free. You don't need to create an account beforehand. You just download the app, go to the "Payments" section, and it will give you options to pay. You'll need basic info like your SSN/ITIN, date of birth, and filing status to verify your identity. For payment you can choose Direct Pay (bank account) or pay by card through a payment processor (which charges a fee).
Tip for anyone paying their tax bill online: SAVE THE CONFIRMATION NUMBER! I paid through the website last year and thought everything was fine, but 3 months later I got a notice saying I hadn't paid. Thankfully I had the confirmation number and was able to prove I'd paid on time. The IRS eventually found the payment but it was stressful.
Good advice! I also take screenshots of the payment confirmation page. Learned that lesson the hard way after a payment "disappeared" from their system a few years ago.
Zainab Mahmoud
This might sound obvious but did you go through ALL of TaxAct's screens? I had almost the exact same issue (said I owed $400 when I should've gotten $600 back). When I looked closer, I noticed there was a "Personal Info" section I thought I completed, but I missed a question about whether I could be claimed as a dependent. The software defaulted to "Yes" which dramatically reduced my standard deduction. Once I fixed that single checkbox, everything calculated correctly. I've used TaxAct for 6 years and this is the first time I've had this problem. Their interface changed this year and it's really easy to miss important questions.
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Esmeralda GΓ³mez
β’You're a genius! I just went back and found I had the exact same issue. There was a checkbox in the Personal Info section about being claimed as a dependent that somehow got set to "Yes" even though I definitely can't be claimed by anyone. As soon as I fixed that one setting, my refund jumped from owing $372 to getting back $570, exactly what my calculations showed. It's crazy how one checkbox could completely throw off the standard deduction calculation. Has TaxAct always been this finicky? I've used them for years but never ran into this problem before.
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Zainab Mahmoud
β’TaxAct definitely changed their interface this year, and I think they're having some issues with it. In previous years, that dependent question was much more prominently displayed and clearly explained. This year it's buried in a series of personal information screens that are easy to click through without carefully reading. I've heard similar stories from several people using TaxAct this year. The good news is once you find and fix that setting, the calculations should be completely accurate. Always a good idea to double-check your final 1040 form before filing to make sure the standard deduction amount ($13,850 for single filers in 2024) appears correctly on the form.
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Ava Williams
Just a tip - most tax software lets you view your actual Form 1040 before filing. If you look at line 12 on your 1040, it should show your standard deduction amount. If that line shows $0 or some reduced amount instead of $13,850 (assuming you're filing single), that confirms the standard deduction isn't being applied correctly. I always check my actual tax forms in the preview/print section before submitting anything. It's saved me from tons of errors over the years!
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Esmeralda GΓ³mez
β’Thanks for this! I just checked my Form 1040 preview and line 12 was showing only $500 instead of $13,850. After fixing the dependent checkbox issue others mentioned, it now shows the full $13,850. Checking the actual tax forms is definitely going to be my new practice before submitting anything. Would've caught this issue immediately if I'd done that first!
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