does anyone know what carryover or carryback on taxes means?

Question

form nol-85

Answer 1

If you have loss this year and had a gain last year, you can sometimes carry your loss back and reduce last year's taxes. Or, you can carry it forward, meaning if you have a gain next year, you can use this year's loss to lower your gain. This will lower your taxes next year.

How long losses can be carried forward or back depends on the entity and type of loss. Carry forwards are usually longer than carry backs.

Answer 2

Carryback refers to certain business tax credits.

A carryover refers to a situation where you have items such as capital losses or charitable contributions or investment interest that exceed the amount deductible for the current year. You still report them for the current year, but the amount that would have been deductible if you were not over the annual limit can be "carried over" to future years and deducted then if you don't exceed the limits also in those future years.

This happens most commonly with capital losses. You can only deduct $3000 per year of capital loss against ordinary income, so if your net c loss for the year is over that, you can "carry it over" to the next year, take $3000 then, and then if there's still some left, to the next year and so on.

Answer 3

If you have a Net Operating Loss (NOL) in a particular tax year, you have to choose to either carry the loss backward to ONE specific tax year (and amend that return), or carry the loss forward over the next several years.

If you carry the loss back, be sure to choose a tax year in which you had nex taxable income. Certain credits are disallowed for this purpose. You will be able to deduct the NOL from your taxable income, and re-base your tax owed on the new amount, and usually get a refund on that amount.

This is a confusing issue. I usually do my own taxes, but when I encountered this same issue after closing a business, I had to consult a tax professional. H & R Block resolved this for me for a very reasonable fee.

Answer 4

Carryover means that you own a business and you losses in the current year and you want to use those losses to offset your future income. eg if you have $5,000 income in your 2008 return, and have losses from your business, known as net operating losses (NOL) in 2006, you could carry forward those losses to cancel your $5,000 income in 2008 and have zero income in 2008, thus not owe any taxes.
Carryback is if you have losses in your current return and want take them back to a previous year that you had income and had to pay taxes. This carryback will cancel your previous income and therefore get a refund. You will have to ammend the previous year's return for this refund.

Answer 5

never heard...