What Is Form 1045: Application for Tentative Refund?
Let me explain Form 1045 directly: it's the IRS form you use as an individual, estate, or trust to apply for a quick tax refund. You need to base your request on one of four specific reasons, as outlined in the form's instructions.
These reasons include carrying back a net operating loss (NOL), an unused general business credit, a net section 1256 contracts loss, or an overpayment due to a claim of right adjustment under section 1341(b)(1). The instructions detail exactly what qualifies as a loss, so check them carefully.
Key Takeaways on Form 1045
Thanks to the Tax Cuts and Jobs Act (TCJA), if you're dealing with net operating losses from tax years after 2017, you can generally only carry them forward to later years. Remember, the NOL carryback amount won't exceed $250,000 if you're a single taxpayer or $500,000 for married filing jointly.
Be cautious when carrying back an NOL to a prior year—it could lead to an alternative minimum tax (AMT) obligation, so calculate that out before proceeding.
Who Can File Form 1045: Application for Tentative Refund?
You can file Form 1045 if you're an individual, estate, or trust, opting for it over Form 1040-X for individuals or Form 1041 for estates and trusts. The big advantage is speed: Form 1045 gets you a quick refund, with the IRS required to process it within 90 days, but you must file it within one year of the NOL or other qualifying event.
In comparison, Forms 1040-X and 1041 allow up to three years for filing, but the IRS can take up to six months to process them. Keep in mind that Form 1045 provides a tentative refund, which means the IRS or you could dispute it later. If you prioritize speed over final accuracy, this is your form; otherwise, stick with the slower but more definitive options.
Important Note on Filing
Here's a key point: you don't attach Form 1045 to your income tax return. File it separately or mail it in its own envelope. You can find the form on the IRS website.
How to File Form 1045: Application for Tentative Refund
You must file Form 1045 within one year after the end of the year when the triggering event occurred, such as an NOL, unused credit, net section 1256 loss, or claim of right adjustment.
Start with your personal details like name, address, and Social Security number. Then, answer questions about the carryback type. Next, calculate the tax decrease from the carryback for each relevant prior year. Finally, sign and date the form, and have your tax preparer do the same if you're using one.
Other Relevant Forms
Although you file Form 1045 separately from your main tax return, include the first two pages of Form 1040, any Form 4952, and all Schedules K-1 with it.
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