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TP had a $35K NOL for 2018 on Sch. C. No tax was due. New Covid rules say we can now carry back 5 years starting with 2018 NOLs.
In 2016 TP had wages of $67K with tax Liability of $7,289. No Schedule C income or SE tax.
In 2017 TP had $35K Sch.C income and 7K Wages. Income Tax liability was $4K and SE Tax was $5K.
Do I start with tax year 2016 or 2017? It will get used up either way. Seems to have more value in 2016 since NOLs cannot offset SE Tax.
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You state " $35K NOL for 2018 on Sch. C". Was there really a NOL? Even with a negative Schedule C, there may not be an NOL.
"In 2016 TP had wages of $67K with tax Liability of $7,289. No Schedule C income or SE tax." says you really don't understand NOL, but if there really was a NOL in 2018, then you really need to go back 5 years. 1=2017, 2=2016, 3= 2015, 4= 2014, 5 = 2013 so start in 2013.
"Do I start with tax year 2016 or 2017? It will get used up either way. Seems to have more value in 2016 since NOLs cannot offset SE Tax. " shows that you would like to pick and choose, but that is NOT an option.
Start by reading this in your spare time https://www.irs.gov/pub/irs-pdf/p536.pdf
Answers are easy. Questions are hard!
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@pvilarreal wrote:Do I start with tax year 2016 or 2017?
How about 2013?
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You are correct. I did not understand NOL's. I am still a rookie. Thank you for your help! I need to learn as much as possible.
