NOL and SS Benefits

[taxlady1976]

I am working on a return in Proseries Professional that includes a net operating loss from a prior year.  The client also has SS benefits.  Correct me if I'm wrong, but don't we need to recalculate the taxable SS benefits without the NOL in order to determine the amount of the NOL used up for 2020 and the remaining amount to be carried over to 2021?  I've been reading pub 536 as well as reviewing the prior return prepared by another firm and this looks to be how it should be done; however, I don't see where Proseries is making this calculation.  Do we have to do this manually or am I completely misunderstanding how this is to be done?

[dkh]

I don't know the answer but do want to comment.  Also this will push your question to top of the forum again so maybe someone who does know will see it.

1)  I never assume another firm has done something correctly especially if it's a tax situation I'm not familiar with.   I don't know the experience level  of the former preparer.

2) I never assume my or the former preparer's software is doing everything correctly.  

[IRonMaN]

I don't recall coming across the issue before either, but if I did something every time I saw that something done by another preparer, I would probably be in jail by now.  Some prior preparers know a lot more than me and some prior preparers are dumber than a box of rocks.

[BobKamman]

You are correct in reading Pub 536 and it's not improbable that the computation is beyond the capability of the program.  What are you looking at from the 2019 return?  There is no requirement that it show the carryover.  So what you have is something that the software used by last year's preparer was able to generate.  I don't know if there's any way to determine whether it's an Intuit product -- or whether you are cooking with margarine but need the high-priced spread(sheet).  

[TaxGuyBill]

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@taxlady1976 wrote:

don't we need to recalculate the taxable SS benefits without the NOL in order to determine the amount of the NOL used up for 2020 and the remaining amount to be carried over to 2021?

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Due to the Unemployment Exclusion, ProSeries basically disabled the Social Security worksheet for this year so it could do that part correctly.  So even IF ProSeries was doing it correctly in prior years, it would not surprise me that they screwed it up this year because of the way they handled the Social Security worksheet this year.

[taxlady1976]

Thank you for the response. I'm definitely not assuming anything, which is why I looked to the pub 536 for my answer. It appears that the prior preparer was doing it correctly, but my software is not so I wanted to clarify with others to see if someone else had seen this issue with proseries or in case there was something I was completely misunderstanding.

[taxlady1976]

I'm looking at the NOL worksheet included with the prior return.  Also, the NOL worksheet in Proseries looks a little different from the NOL worksheet shown in pub 536 and doesn't include the line for recalculation of SS benefits.  I'm still a little confused, but going to keep chugging along until I figure this out.