How do I report a business loss or carryover from my K-1? (2024)

When you prepare your tax return with TurboTax, the software automatically tracks and carries over your QBI business losses to the next year’s tax return.

The QBI deduction is based on net income, so if your business had a net loss, you don't qualify for the QBI deduction for that year. A net loss gets carried over to the next year’s QBI calculation, and is used to offset any future year's QBI income for your K-1 business.

In other words, when the QBI deduction is calculated, your current year’s QBI is reduced by any losses from the previous year. This is called a loss carryover.

If you are preparing your return for the first time in TurboTax, you’ll need to indicate that you have carryovers from the prior year, and manually enter those amounts.

Sign in to your TurboTax Online account and continue to your return
In the section Wages & Income, enter the carryover amount under Other Business Situations
Select Start next to Net Operating Loss/QBI Carryforward Loss

For TurboTax Desktop - Premier

Sign in to your TurboTax Desktop Premier account and continue to your return
Enter the carryover amounts in the Wages & Income section, under Business Items
Select Start next to Business Deductions & Credits, then select Business Loss Carryovers (NOL,QBI)

Sign in to your TurboTax Desktop Home & Business account and continue to your return
Enter the carryover amounts in the Business Income & Expenses section
Under Less Common Business Situations, select Start next to Net Operating Loss/QBI Carryforward Loss