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Old 04-14-2013, 12:06 AM
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NOL carryover..was Single, now Married

I need some help because my NOL happened in 2009 and hasn't been used up yet. Problem is that I filed Single in 2010 and 2011 but got married and filing MFJ for 2012. Pub 536 says I have to separate the NOL out and only use it on my own income. Prob is we both have SE income and I had a small W-2. Putting it on Line 21 takes both amounts from both people and reduces them (still to a negative amount for total income though). How do I physically separate the NOL out so it only affects "my" income?



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Old 04-14-2013, 02:01 AM
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“ . . . my NOL happened in 2009 and hasn't been used up yet.”=============> You have 3 years from the date that the 2009 return is filed to file an amended return to carryback the NOL. For example, if you are a calendar year taxpayer and filed your 2009 return by the April 15, 2010 due date, you must file a claim for refund of 2007 tax because of an NOL carryback from 2009 by April 15, 2013. If the 2009 was properly extended until 10/15/10, you can amend 2013 by 10/15/2013. If it was not, I believe you are out of luck.


Did you waive your carryback period and use all your losses going forward for up to 20 years???????????


Last edited by Wnhough : 04-14-2013 at 02:19 AM.


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Old 04-14-2013, 06:38 PM
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“Ah, no, I elected to forego the carryback and carry it forward and I have been carrying it forward the last couple of years on Line 21. “===========>Ok I got you; correct. You list your NOL deduction as a negative figure line 21of Form 1040 other income.
“However, since I got married in 2012, Pub 536 says I'm supposed to only apply the carryforward to my income, not my spouses. Pub 536:"If you and your spouse were not married to each other in all years involved in figuring NOL carrybacks and carryovers, only the spouse who had the loss can take the NOL deduction. If you file a joint return, the NOL deduction is limited to the income of that spouse. When I put the NOL deduction amount (90k) on line 21 it reduces both of our incomes (but that makes us both have negative total income). I guess it is only supposed to reduce mine?”=========> As you were not married in the NOL year, 2009,and in the carryforward year, 2012, you were married and filed a joint return, your NOL refund for the overpaid joint tax may be limited. ONLY you carrying the NOL may take the loss deduction on your separate return. You can claim a refund for the difference between your share of the refigured tax and your contribution toward the tax paid on the joint return. The refund cannot be more than the joint overpayment. You need to attach a statement showing how you figured your refund. Do not use Form 1045, Sch B, for a carryforward year. If you had an NOL deduction carried forward from a year prior to 2012 that resulted in your having taxable income on your 2012 return of zero , you need to complete Table 1, Worksheet for NOL Carryover From 2012 to 2013. If your 2012 NOL deduction includes amounts for more than one loss year,you ned to complete the worksheet only for one loss year. To determine which year, you should start with your earliest NOL and subtract each NOL separately from your taxable income figured without the NOL deduction. Also complete this worksheet for the earliest NOL that results in your having taxable income below zero. Your NOL carryover to 2013 is the total of the amount on line 10 of the worksheet and all later NOL amounts.


“If so, how and where is that calculation supposed to be shown?”============> Your NOL refund would be the difference between the refigured tax and your contribution to the tax originally paid on the joint return. Your portion of the refigured tax would be determined by calculating the original tax for both you and your spouse as if you had filed separately, and then taking your proportion of the sum of these amounts and multiplying by the refigured tax after applying the net operating loss. Your contribution to the total tax paid for that year, unless you have an agreement with your spouse stating otherwise, would be the amount of tax withheld from your pay and from your other income for that year, plus your share of any estimated tax payments that were made, less your share of the tax refund or plus your share of the tax paid with your joint return for that year.You need to figure your share of the refigured joint tax liabilityon your MFJ return; first, 1. you need to figure your total tax as though you had filed as married filing separately.2. Also, figure your spouse's total tax as though your spouse had also filed as married filing separately. 3.And add the amounts in 1 and 2. 4. And you need to divide the amount in 1 by the amount in 3. And multiply the refigured tax on your joint return by the amount figured in 4. This is your share of the joint tax liability. Your NOL refund cannot be more than the joint overpayment.



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Old 04-14-2013, 08:32 PM
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Total income (line 22) is negative due to the NOL carryover. The only thing we owe for is SE Tax. We are ending up paying because we didn't send in estimated tax payments. The VERY small amt deducted on my W-2 is way small and my wife only had SE income so I assume nothing crazy needs to be done this year? Only next year?....I'm getting it, I think. The calculation worksheet I have from 2011 shows the calculations done as an individual. I would take this year's NOL and shove the numbers on that sheet --a 2012-2013 sheet (using my numbers only--MFS numbers) and calculate so that her "income" does not reduce my NOL. This actually works in my favor correct? Therefore the new NOL carryover number calculated for 2013 would only be based on figures from that sheet, not from BOTH of our incomes? Essentially this year, because of the numbers on my return...nothing needs to be done except entering the NOL carryforward on line 21, correct? Since the calculations on the carryforward were done in 2011 using my numbers as a Single filer. If this is right, then I actually think I get IT!!!


Last edited by trwguy99 : 04-14-2013 at 09:06 PM.


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Old 04-14-2013, 09:39 PM
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“Total income (line 22) is negative due to the NOL carryover. The only thing we owe for is SE Tax. We are ending up paying because we didn't send in estimated tax payments. The VERY small amt deducted on my W-2 is way small and my wife only had SE income so I assume nothing crazy needs to be done this year? “=========>Then I guess so; as the number on 1040 line 22 is negative, you can’t claim the number on line27.And also as the number on line 61 is larger than the number on line 62/72, you ‘ve got the balance on line 76. As you did not make estimated tax payments, then you must complete IRS Form 2210 to determine if you owe a penalty. Attach Form 2210 to the income tax return you file with the IRS. When you do not pay enough tax during the year, the IRS imposes an underpayment penalty. The IRS expects that you will pay at least 90 percent of your tax bill for the current year between Jan 1 and Dec 31. This means that you need to have paid 22.5 percent of your tax owed by the postmark deadline each quarter -- April 15, June 15, Sep 15 and January 15. The underpayment penalty is a percentage of tax owed, and calculated for each day you did not pay. If you have a penalty, the IRS will usually calculate it for you and send you a bill -- a good option, as the calculation can be complicated. The underpayment rate varies from year to year, but was 3 percent at the beginning of 2013.




“Only next year....I'm getting it, I think. The calculation worksheet I have from 2011 shows the calculations done as an individual. I would take this year's NOL and shove the numbers on that sheet --a 2012-2013 sheet (using my numbers only--MFS numbers) and calculate so that her "income" does not reduce my NOL. This actually works in my favor correct?”=========>Correct; as you carry forward a NOL, and it reduces your taxable income below zero for the year, you will have a NOL carryover. In order to determine how much of the NOL will be used up that year, and how much can be carried forward to the following year, you will need to make certain adjustments to your taxable income. These adjustments are for NOL purposes and do not affect the items as they should be reported on your return for that year..SO, since you carry forward an NOL deduction from a prior year to the current year, 2012,and this NOL deduction reduces your taxable income for this year to a negative amount, you should use the worksheet in Table I of IRS Pub 536 to calculate the amount to be carried over to the following year.



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Old 04-14-2013, 09:56 PM
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Copy that. Hey, thanks a million...and for being fast at deadline time too. Whoever you are, you saved my canister. Didn't sleep last night wondering who and where on April 15th I was going to find advice for this one item without them wanting (and charging me) to do the whole return, which would have been ridiculous.



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Old 04-14-2013, 10:01 PM
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No problem, good luck bud~~



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