NOL and Taxable Social Security

Forum|Forum|2 years ago
March 4, 2024
3 replies
51 views

Taxpayer receives social security benefits and has a farming loss for 2023 as well as a 2022 farming loss carryforward. My challenge is that Lacerte calculates taxable income before the NOL to be minimal with no taxable SS, however, when I enter the override to limit to 80%, then part of the social security becomes taxable and it becomes a vicious cycle that doesn't end with the same number twice.

Any guidance on how to calculate the NOL limitation when taxable social security has not been hit the limit of 50% or 85%?

George4Tacks

Level 15

Generally bad things happen in Lacerte when you enter an override. What did you override. You use the phrase "taxable income" for net of farm loss and Social Security. Must be a lot of SS income.

Get rid of the override and look at the worksheets Lacerte creates. My guess is Lacerte is doing it correctly.

P.S. This is not support. This a forum supported by other users. You can call Lacerte and they can maybe help you figure this out. OR come back here with more information. We can not see your work.

Answers are easy. Questions are hard!

G

GolfCPA22Author

Level 2

I agree bad things happen with overrides, however, the NOL is from 2022 so it's limited to 80%, therefore, I am required to enter an override because Lacerte does not calculate the limitation.

It's been hit and miss with the phone support, so I thought I'd reach out to the community first to see if some other professional has encountered a similar issue.

D

DWayneB

Level 2

I have the same issue. As much as we pay for Lacerte, you would think the system would perform the calculation.

S

SDennard

Level 2

I'm curious what you decided to do. I have the same issue. The taxable social security changes when I enter the amount of NOL that was calculated with "taxable income without regard to the NOL".

I decided to enter "O" NOL and let Lacerte calculate the taxable income (which calculated the taxable social security without the NOL deduction which would be the "taxable income without the NOL"). Then I manually calculated the 80% limit of NOL using that taxable income and entered it into the data. Then let it recalculate the return, which recalculated the taxable social security. I couldn't find any IRS insight into this situation with SS and NOL in same return for clarification. I hope this is what was intended.

K

Kappy

Level 3

@SDennard I do it the same way that you do it.

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