Carryover loss

[lawman]

When tax losses are greater than gains you can carry over the excess loss and deduct $3000.00 each year until you have claimed it all. So if I take my taxes to a different c.p.a how will he/she know about previous unclaimed losses..Same question if I use Turbo Tax..

 

[pb4uski]

The amount that carries forward from the prior year is easily computed using the prior year Schedule D. TT does it all automatically, but the first time that you use TT you would have to enter it from your last year's Schedule D.

 

[lawman]

The amount that carries forward from the prior year is easily computed using the prior year Schedule D. TT does it all automatically, but the first time that you use TT you would have to enter it from your last year's Schedule D.

So if I used another c.p.a. they would not know about it unless I told them..Is that correcc?

 

[Jerry1]

So if I used another c.p.a. they would not know about it unless I told them..Is that correcc?

As long as you gave them your previous year tax return, they would have the number.

 

[RunningBum]

So if I used another c.p.a. they would not know about it unless I told them..Is that correcc?

Right, but why wouldn't you show them last year's return? I've never had my taxes done by someone else, but I would think they would ask to see it if you don't give it to them.

 

[pb4uski]

So if I used another c.p.a. they would not know about it unless I told them..Is that correcc?

The new CPA will have no way of knowing the loss carryforward other than from prior tax returns. They won't just take your word for it.

They will ask for and expect you to provide them with some prior year tax returns, the immediate past year at a minimum. If you won't provide them with last year's return then they'll likely show you the door. I would.

 

[SecondCor521]

Any tax preparer worth their salt is going to ask you about carry forward information if they didn't prepare your previous returns.

There's a bunch of stuff that falls into this category: capital loss carry forwards, payments applied to next year's return, business depreciation, AOTC number of years claimed, energy credits, IRA basis, and probably more.

Frequently, this information can be found in all the extra worksheets and pages that a CPA-prepared tax return includes in the paperwork they give you after finishing your return. That's why the posters above have said that a new CPA would typically ask to see your prior return; they're looking at those extra worksheets and pages (and the tax return itself for some things).

Turbotax and other software probably have ways for you to enter that data in, but I'd guess it's not in the main part of the software because carry forwards aren't particularly frequent.

 

[Midpack]

Turbotax and other software probably have ways for you to enter that data in, but I'd guess it's not in the main part of the software because carry forwards aren't particularly frequent.

+1. TurboTax does transfer everything pertinent*** from last years return into your current return, that’s one of the main reasons I’ve used TT for 20 years or so, VERY helpful. Of course I keep a pdf copy of all my forms and worksheets (TT does that automatically), so I could go another route any time.

*** e.g. in my case CG excess loss carryovers, FTC & AMT carryovers, IRA non-deductible basis, names & CUSIP of all my holdings, HSA, all personal info, etc.

 

[lawman]

+1. TurboTax does transfer everything pertinent*** from last years return into your current return, that’s one of the main reasons I’ve used TT for 20 years or so, VERY helpful. Of course I keep a pdf copy of all my forms and worksheets (TT does that automatically), so I could go another route any time.

*** e.g. in my case CG excess loss carryovers, FTC & AMT carryovers, IRA non-deductible basis, names & CUSIP of all my holdings, HSA, all personal info, etc.

So I did a practice run on TT to see how it compared with my 2021 c.p.a. prepared return..I ended up with the same bottom line but I did not pay for it. When I do my own return next year on TT will it retain the information from my practice 2021 return?

 

[donheff]

So I did a practice run on TT to see how it compared with my 2021 c.p.a. prepared return..I ended up with the same bottom line but I did not pay for it. When I do my own return next year on TT will it retain the information from my practice 2021 return?

Yes. TT carries over personal details and items needed for the following year, and prompts you on things you input before (W2s, 1099s, deductions, etc.) to make sure you are not forgetting something. I did the same thing as you about 10 years ago. I used our regular CPA for the official filing and then did a test version myself on TT to compare. I was close but made a few minor mistakes that I found by comparing my return with the CPA's filing. I have been doing it myself ever since.

 

[pb4uski]

So I did a practice run on TT to see how it compared with my 2021 c.p.a. prepared return..I ended up with the same bottom line but I did not pay for it. When I do my own return next year on TT will it retain the information from my practice 2021 return?

Yes. TT will "assume" that you printed and filed your return and has no way of knowing that you never printed and mailed it.

BTW, one neat feature in TT is the What-If Worksheet. If you go to Forms view and go to the add a form in the upper left and type in What if should appear on a list and then just click on it to add the sheet.

 

[cathy63]

So I did a practice run on TT to see how it compared with my 2021 c.p.a. prepared return..I ended up with the same bottom line but I did not pay for it. When I do my own return next year on TT will it retain the information from my practice 2021 return?

TT has two different types of programs, desktop (downloaded) and online. I think you did a return in the online software since you say you couldn't see it without paying for it.

The desktop software would definitely save your return and allow you to import it next year, even if you never filed it. I am not as certain about the online product.

Regarding the carryover loss entry, it's on the main income screen in TTax, second line under Investment Income, right after sale of stocks and mutual funds. When you click on it, it asks if you want to use the carryover amounts it imported or not. If you say no or if you didn't import a prior year's return, it asks if you know the amounts or want help figuring them. If you say you want help, it asks you to type in several numbers from last year's Schedule D and does the calculation for you.

 

[COcheesehead]

Carryovers, IRA basis and all those little details that could get lost to time are stored in TurboTax and are available to import from the previous year(s).

 

[fh2000]

Turbo Tax also tracks the accumulated total for Roth contribution and Non Deductible IRA total cost base, which are nice.

I wish TT could also track the accumulated total of HSA contribution since California taxes HSA withdrawal just like any other brokerage account. I have to track my own total cost base for that.