How to file a Net Operating Loss (NOL) from my LLC in 2022

Thanks for the info, that helps a lot. So just to make sure I'm understanding correctly - I don't need to file anything special for 2022 other than my Schedule C showing the loss? And then when I do my 2023 taxes, that's when I'll use Form 1045 Schedule A? Also, is there any limit to how much of the NOL I can use in 2023? Like, if my business makes $10,000 in 2023, can I apply the entire $4,800 loss from 2022?

You've got it right - for 2022, just file your regular Schedule C showing the business loss. No special forms needed at this point. The NOL carries forward automatically. For 2023, you'll use Form 1045 Schedule A to calculate your NOL, but you'll actually claim it on Schedule 1 of your Form 1040. As for limits, you can generally use the entire NOL to offset your 2023 income. If your business makes $10,000 in 2023, you can apply the entire $4,800 loss from 2022, reducing your taxable business income to $5,200. If you don't use the entire NOL in 2023, you can carry the remaining portion forward to future years.

How exactly does the tool work? Does it actually fill out the forms for you or just tell you which ones you need? My CPA charges me $$$$ for every little thing and I'm trying to handle some of this stuff myself.

I'm always skeptical of tax tools. How can it possibly interpret the documents correctly? The IRS guidelines for NOLs are complex and change almost yearly. Does it stay updated with current tax code?

The tool works by analyzing your tax documents and identifying specific situations like NOLs. It doesn't fill out the forms for you, but it provides detailed guidance on which forms you need, how to complete them, and explains each step in plain English. It basically translates your specific tax situation into a clear action plan. The system is continuously updated with current tax code changes. That's actually one of the most valuable aspects - it caught several recent NOL rule changes that affected my situation. It references specific IRS publications and code sections so you can verify everything. I found it much more reliable than generic tax advice online.

Wait, how is this even possible? The IRS phone system is notoriously impossible to navigate. How does this service get through when nobody else can? Sounds a bit like magic or maybe something sketchy.

I've tried EVERYTHING to get through to the IRS about a business loss issue. Called at different times, different days, always the same result - disconnected after hours on hold. How much does this service cost? Seems too good to be true.

It's not magic, just clever technology. They've created a system that navigates the IRS phone tree and waits on hold in your place. When a representative finally answers, the system calls you and connects you to the IRS agent. It's completely legitimate - they're just automating the painful waiting process. The service is worth every penny considering the time saved and stress avoided. I spent 3 hours on multiple attempts before giving up, then Claimyr got me through in under 30 minutes. They don't bypass any systems - they just handle the waiting game for you. It's basically like having someone wait in a physical line for you.

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.

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.