Stimulus Package - Get Free Money Now with NOLs! - YouTube

Hey what's up everybody? Welcome, thanks for joining me today. If you're new here

and you haven't done so already, please subscribe to my channel. I'd really

appreciate it and also smash that like button if you enjoyed this video, enjoy

this content. Right now I'm going to be talking about how you as a business

owner can get access to free money up to tens of thousands of dollars. You know, from

hundreds of dollars up to tens of thousands of dollars, up to a hundred

thousands of dollars okay? And I'll show you what in the CARES Act has allowed

this to happen. And also tell you how you can look to see if you qualify for this

kind of "program" okay? So what I'm talking about is net operating loss. If you

haven't heard of it, it just means that your business, or your personal, or your

income tax took a net operating loss rather than showing an income. Your

income is actually a negative number which means you incurred a loss for the

year. Okay, that's called a net operating loss. And

so what happens with that loss is that you can carry it forward indefinitely to

offset future income. Or you can carry it back, up to two years, and offset past

income. Why would you want to do that? Alright so let's talk about the carry

forward first. When you carry it forward, you're taking that loss that you

incurred in this year and you're offsetting future incomes with that loss.

So when you offset future incomes, you basically reduce your tax liability okay?

So that's why that's important. That's why you the carry forward is important. Now

why would you carry it backwards? So if you carry backwards, you're offsetting

past income. Which means that if you had income in the previous two years and you

fully paid off all your taxes, for like you don't owe any tax right now for it,

and you carry back that loss, and you offset that income, that means that you

qualify for a refund of your taxes based on how much of the loss has impacted

your net income in prior years. And that's how you're going to be getting

this free money right away, or at least as soon as the IRS processes everything.

You know, if you do qualify, you're going to carry it backwards a couple years

to offset your past income and get that refund. Now if you still are making an

installment agreement payments on your prior your taxes, like

you haven't paid them off yet, then what this will do is actually just reduce

your tax liability so you have to pay less back. So you might not get a refund

but you're going to owe less money. So it's not like an instant gratification thing

but it will help you regardless. So what did the CARES Act do for this net

operating loss? So what they did is they extended the two year carry back rule to

five years. Meaning you can carry your loss back up to five years to offset any

past income which is huge okay? Because some business owners, you

know if you're just starting out, you're likely to have losses for a few years

and you don't have to pay taxes on that. But then that also means you can't

really carry it back for those years because you just have other losses. I

mean you can carry it back, but you're not going to offset any income to get a

refund. So now you can carry it back up to five years, that means that you have

more years to look at, more years that might qualify you for a refund that you

can carry that loss back. The CARES Act has extended this two year to five year

losses for losses incurred after years 2017 only. That means so far,

if you incurred a loss in 2018 or 2019 then you can carry those losses back up

to five years. But if you carried a, if you incurred a loss in 2017 or

earlier, that still falls under the two year rule. I hope you're following with me so

far. So now how do you qualify for this

program? So first of all, you've got to have a loss in 2018 or 2019. If your business took

a loss or your personal income tax took a loss in 2018, 2019 then you're looking

good right now. So if you're an individual, if you file as a sole

proprietor, or if you were part of a partnership, or you're part of a

single or a multi-member LLC, or an S corporation what you want to do is look

on your personal tax return, your 1040. Look for your adjusted gross

income and if that number is negative, that means you have a net operating loss

that you likely would be able to carry back, okay?

If that number is negative on your adjusted gross income. If you are a C

Corporation, since C Corporations pay their own taxes, then what you can do is

just look at your taxable income from your form 1120, that's your corporate tax

return. If your taxable income is negative that means you have a net

operating loss that you can carry back or forward. So the next thing you want to

look for if you do have a loss that qualifies, you want to look at years 2013

through 2017. If you have taxable income in those years and you paid the taxes and

you're all caught up on your taxes, then you will likely get a

refund if you carry that loss back to one of those years. Now again, if you

still owe taxes on those years, and you're still making payments on those,

carrying your loss back will just reduce your tax liability and you'll

have to pay less back. Same thing with corporations look for years 2013 to 2017,

if you had a taxable income in those years and you carry your loss back you

will likely get a refund if you paid off your taxes there. All right, the process

is a little tricky, like there's a couple ways you can claim net operating

loss. But for purpose of the CARES Act it's form 1045, it's a claim for a

tentative refund. That's the form that you want to use. If you're

confused about it definitely contact us, we are a CPA firm and we can help you

with that all right? That's all I've got for today. Thanks for joining me. Again if

you're new here, subscribe to my channel. I'm going to be keeping you guys updated

on how you can take advantage of various stimulus package programs, and

keep you updated on stimulus package news. And also, smash that like button

if you haven't done so already alright? Y'all take care for now and I'll

see you next time.