What IRS Form 1045 (2017) Is For
IRS Form 1045 (2017) allows taxpayers to apply for a tentative refund claim based on specific tax adjustments. It is primarily used to claim refunds for net operating losses (NOLs), unused credits, and other qualifying adjustments. The form expedites the refund process, allowing taxpayers to receive their refunds faster than they would through the typical amended return process.
Form 1045 is especially helpful for taxpayers facing financial challenges or needing a quick tax refund to address cash flow issues. Filing this form allows taxpayers to adjust their tax liability from previous years and expedite their refund.
When You’d Use IRS Form 1045 (2017)
IRS Form 1045 is used to apply for a tentative refund claim when taxpayers incur a net operating loss (NOL) or need to carry back unused credits from previous years. Most taxpayers who qualify must file Form 1045 within a one-year window after the taxable year ending to adjust their total tax liability. Filing this form allows taxpayers to quickly claim a refund for overpaid taxes during the carryback years, avoiding the slower amended form process.
The IRS provides detailed instructions for Form 1045 on its website, outlining the steps for calculating the carryback or carryforward year. Taxpayers may choose either form depending on the situation. A six-month extension may be granted in certain cases, though it does not apply to all taxpayers.
Key Rules or Details for 2017
The 2017 tax year introduced specific rules for handling net operating losses (NOLs), including a two-year carryback period for most NOLs arising in that year. Taxpayers may also carry these losses forward to future years, allowing them to adjust their income tax liability for the years affected. The IRS website provides detailed instructions for Form 1045 to help taxpayers navigate these rules effectively.
Certain special categories, including farming losses, permit an extended five-year carryback period. If taxpayers miss the one-year filing window for Form 1045, they must use an amended form to claim their refund. These procedures ensure that NOLs arising in 2017 are handled accurately under the law.
Step-by-Step (High Level)
Filing Form 1045 involves several key steps to ensure accuracy. These steps should be followed to ensure proper submission:
- Calculate Net Operating Loss: Begin by calculating your net operating loss (NOL) using your income tax return. Adjust your gross income for the applicable year.
- Identify Carryback Years: Review the taxable years beginning and determine where the NOL will be applied. The carryback or carryforward rules must be followed as required.
- Complete Form 1045 Application: Fill out the 1045 application for a tentative refund. Be sure to include your Social Security number and any forms required for the relevant years.
Following these steps will help ensure the correct filing of Form 1045 and speed up the refund process.
Common Mistakes and How to Avoid Them
When filing Form 1045, ensuring accuracy is crucial to avoid delays. The table below lists common mistakes and provides clear solutions for avoiding them:
Common Mistakes and How to Avoid Them
1. Filing Before the Original Return
- How to Avoid It: Always file your income tax return before submitting Form 1045 to prevent processing delays.
2. Incorrect NOL Calculation
- How to Avoid It: Carefully adjust your taxable income to ensure the Net Operating Loss (NOL) is calculated correctly for the appropriate tax year.
3. Missing Carryback or Carryforward
- How to Avoid It: Double-check the applicable carryback and carryforward periods to ensure you are selecting the correct tax years.
4. Incomplete Documentation
- How to Avoid It: Include all required forms and supporting documents for each relevant tax year to avoid delays or rejection.
5. Failing to Meet the Deadline
- How to Avoid It: File Form 1045 within the one-year limit; otherwise, you may be forced to use the slower amended return process.
By avoiding these mistakes, taxpayers can enhance their chances of a smooth and timely refund process.
What Happens After You File
After filing Form 1045, the IRS processes it within 90 days. After submission, you may receive a refund request if your claim is approved. It is important to ensure all relevant forms are included, as missing documentation could delay the process.
If the IRS finds any issues with the form, they may contact you for additional information or clarification. In some cases, they may require a proper adjustment to your tax years beginning or the fiscal year in question. If any discrepancies are found, you will be notified of the required steps to correct the information.
It is essential to track your submission to ensure timely processing. Form 1045 expedites the refund process, but proper filing is essential to avoid delays. Taxpayers who want a central reference point can use the IRS Form Help Center and browse the federal fillable tax forms for related documents.
FAQs
Can I file IRS Form 1045 electronically for 2017?
No, Form 1045 must be filed on paper for the 2017 tax year. The IRS does not accept electronic submissions for this form. Taxpayers must mail the completed Form 1045 application along with the necessary supporting documentation to the correct IRS address.
What is the difference between NOL carrybacks and NOL carryovers?
NOL carrybacks allow you to apply a net operating loss (NOL) to prior tax years, reducing your taxable income for those years. NOL carryovers, on the other hand, allow you to apply the net loss to future tax years, reducing your tax liability over multiple years. The CARES Act provides extended rules for carrybacks, particularly for losses arising in tax years 2018–2020.
How does the Jobs Act affect NOLs?
The Tax Cuts and Jobs Act (TCJA) changed the treatment of NOLs arising in tax years after 2017. The act eliminates the ability to carry NOLs back to prior years, though NOL carryovers are allowed. These NOLs can be carried forward indefinitely, subject to certain limitations.
What is the five-year carryback period for certain NOLs?
Certain farming losses qualify for an extended five-year carryback period, which allows taxpayers to apply their NOLs arising from farming operations to tax years up to five years earlier. This special rule benefits many taxpayers in the agricultural industry by offering a longer period to offset taxable income.
Do I need to file a corporation application for NOLs?
Yes, corporations seeking to apply for NOL carryback or carryover may need to submit a corporation application using Form 1139. This form is specifically for corporate taxpayers and differs from Form 1045, which is typically used by individual taxpayers and those married filing jointly.
Filers can use Federal Fillable Tax Forms to confirm which additional filings may support the tentative refund request.
