Net operating loss (NOL) deductions can be valuable tax breaks for eligible taxpayers. But the rules are hardly simple, and they’ve fluctuated over the last several years under various tax law changes. An NOL generally arises when business deductions exceed gross income. For pass-through entities, losses flow through to owners who claim NOL deductions on their individual returns. C corporations, on the other hand, deduct NOLs at the entity level. Under current law, most NOLs can’t be carried back, and they can offset only up to 80% of taxable income. However, they may be carried forward indefinitely, so it pays to use them judiciously. Contact us for help optimizing your NOLs.
