What IRS Form 1045 (2015) Is For
IRS Form 1045 (2015) is a specialized form that allows individuals, estates, and trusts to request a quick refund from the IRS. This form is primarily used when taxpayers experience a net operating loss (NOL) or have unused business credits from previous years. Filing Form 1045 allows taxpayers to carry back losses or unused credits to offset taxable income from earlier years, which may result in a refund.
In contrast to the amended return, Form 1045 offers a faster refund process, typically completed within 90 days. This makes it an essential tool for individuals and businesses seeking to recover taxes paid in prior years, particularly when experiencing financial setbacks from losses or reduced income.
When You’d Use IRS Form 1045 (2015)
IRS Form 1045 is primarily used when a taxpayer incurs net operating losses (NOLs) or holds unused credits from prior years that can be carried back to earlier tax years. This application for a tentative refund is beneficial for individuals and businesses that need to quickly recover taxes paid in previous years due to these losses. If the loss occurs in a tax year, the taxpayer can apply the loss to prior years to offset their taxable income.
Form 1045 can also be used in cases involving certain modifications, such as farming losses or unused credits. It is essential for those who need a faster process than the amended return option, as it provides a quicker resolution. Note that Schedule B may be required in certain cases, depending on the situation.
Key Rules or Details for 2015
Filing IRS Form 1045 requires understanding key rules to ensure eligibility and proper timing. These rules are crucial for taxpayers seeking a tentative refund for net operating losses (NOLs) or unused credits. The IRS guidelines for Form 1045 help ensure the claim is processed correctly.
The carryback period allows taxpayers to carry back losses to taxable years beginning before 2015. Typically, this period extends two years, although exceptions apply for special cases, such as farming losses or specific business modifications.
The form must be filed within one year after the taxable year beginning in which the loss occurred. If the deadline is missed, the taxpayer must file an amended return. Additionally, Schedule B must be completed, along with all necessary documentation for the taxable years. These rules ensure taxpayers meet requirements for a smooth refund process.
Step-by-Step (High Level)
- Begin by filing Form 1040 for the previous year as your first step in filing your income tax return. You must complete this before submitting Form 1045.
- Use Schedule A to calculate the NOL carryover. Be sure to include adjustments for casualty losses or farming losses.
- Apply the carryback provision to determine the carryback years and carry the NOL to prior years. This generally covers two years, though certain farming losses may extend the period.
- Gather the necessary documents, including Schedule B, the NOL carryover documentation, and any other required forms for your application.
Following these steps ensures that the application for a tentative refund is properly filed.
Common Mistakes and How to Avoid Them
When filing Form 1045, it's important to check all details carefully to avoid delays or disqualification. The following table outlines common mistakes and provides actionable solutions to prevent them.
1. Missing Required Attachments
- How to Avoid It: Make sure all necessary documents—such as Schedule B and Schedule A—are included with your submission.
2. Incorrect NOL Calculation
- How to Avoid It: Accurately calculate the NOL by applying all required adjustments, including farming losses and other eligible items.
3. Filing After the Deadline
- How to Avoid It: Submit Form 1045 within one year of the end of the NOL year to meet the filing deadline.
4. Using Incorrect Carryback Years
- How to Avoid It: Verify that you’ve selected the correct tax-year beginnings based on the applicable carryback rules.
5. Combining Returns
- How to Avoid It: File Form 1045 separately from other filings—such as Form 1040—to avoid delays in processing.
Preventing these mistakes ensures smooth processing and faster resolution of your tentative refund.
What Happens After You File
Once you file Form 1045, the IRS will begin processing your claim for a tentative refund. The IRS has 90 days from the filing date or the last day of the month in which the return is due to process the claim. This timeframe ensures that the IRS has sufficient time to review the NOL carryback or unused business credits claimed.
If the IRS determines that your claim is valid, it will issue a tentative adjustment to your refund. However, this tentative refund does not guarantee acceptance of the claim. The IRS may contact you to request additional information or clarification before issuing the final refund.
A successful filing ensures that tax planning for the following years is not delayed. Understanding these steps helps ensure a smooth and efficient refund process. Access the IRS Form Help Center for related form instructions.
FAQs
Can I use Form 1045 to claim a refund for a net operating loss (NOL)?
Yes, Form 1045 allows individuals, estates, and trusts to claim a tentative refund for net operating losses (NOLs) arising in a specific tax year. The NOL can be carried back to prior years to offset taxable income, resulting in a faster refund. This form is particularly useful when you need a refund faster than filing an amended return.
How does the Alternative Minimum Tax (AMT) affect my refund?
When applying for a tentative refund through Form 1045, the Alternative Minimum Tax (AMT) may impact your tax liability. AMT calculations might adjust your gross income, affecting the total tax liability from prior years. This ensures that taxpayers with itemized deductions or qualified business income receive the correct refund amount.
What if my NOLs arise in tax years beginning after 2017?
For NOLs arising in tax years after 2017, they can be carried forward indefinitely, thanks to the Tax Cuts and Jobs Act (TCJA). These losses will offset future tax liability, allowing taxpayers to reduce their total tax liability in subsequent years. Taxpayers can also apply any unused general business credits to future years or carry forward these credits.
Can I file Form 1045 if I have qualified small business stock (QSBS)?
Yes, if you have qualified small business stock (QSBS), you can file Form 1045 to claim a tentative refund. The net section of your tax return will reflect any credits or adjustments, including those related to QSBS. If applicable, you can also waive carryback and apply NOL carryovers to future years.
What happens if I file Form 1045 after the due date?
If Form 1045 is filed after the due date, you may still be able to receive a refund, but you could face delays. The IRS requires that Form 1045 be submitted within one year of the NOL year to claim a tentative carryback adjustment. Filing Form 1045 separately from other tax forms is essential to avoid processing delays at the federal level.
Further federal form options can be found in our Federal Fillable Tax Forms section.
