Instructions for Filling Out Form 1045

This document offers comprehensive guidance on completing Form 1045 for 2023, covering its purpose, key terms, filing procedures, and step-by-step instructions for each line and schedules A and B. Form 1045 is utilized by individuals, estates, and trusts to request a prompt tax refund due to various carrybacks or overpayment of tax.

In this article, we'll provide information on Form 1045 and a step-by-step guide on how to fill it out, keeping it straight to the point.

What is Form 1045?

Form 1045 is an application for a quick tax refund from the Internal Revenue Service (IRS) in the United States. It is used by individuals, estates, and trusts to apply for a refund resulting from the carryback of a Net Operating Loss (NOL), the carryback of an unused general business credit, the carryback of a net section 1256 contracts loss, or an overpayment of tax due to a claim of right adjustment under section 1341(b)(1). The purpose of this form is to calculate and report any carrybacks, which are losses or credits from one tax year that can be applied to a previous tax year to reduce tax liability and potentially receive a tax refund.

Who Must File Form 1045?

Form 1045 should be filed by individuals, estates, and trusts that have experienced a net operating loss, have an unused general business credit, a net section 1256 contracts loss, or an overpayment of tax due to a claim of right adjustment under section 1341(b)(1). These taxpayers can use Form 1045 to apply for a quick tax refund resulting from the carryback of these losses or credits.

Form 1045 Tax Filing Deadlines and Due Dates

• Generally, Form 1045 must be filed within 1 year after the end of the year in which an NOL, unused credit, net section 1256 contracts loss, or claim of right adjustment arose.

Form 1045 Late Payment Penalty

As the instructions for Form 1045 do not mention any late payment penalty, it is important to file the form within the specified deadline to avoid any potential issues with the IRS. Remember, Form 1045 must be filed within 1 year after the end of the year in which an NOL, unused credit, net section 1256 contracts loss, or claim of right adjustment arose.

Step-by-Step Instructions for Form 1045

Here are the step-by-step instructions for filling out Form 1045:

1. Address: Enter the correct address. If you have a foreign address, enter the city name on the appropriate line and follow the country's practice for entering the postal code and the name of the province, county, or state.
2. Line 1b—Unused General Business Credit: If you claim a tentative refund based on the carryback of an unused general business credit, attach a detailed computation showing how you figured the credit carryback and a recomputation of the credit after you apply the carryback.
3. Line 1c—Net Section 1256 Contracts Loss: An individual can elect to carry back a net section 1256 contracts loss to each of the 3 tax years preceding the loss year.
4. Line 9: If an NOL or net section 1256 contracts loss carryback eliminates or reduces a prior year foreign tax credit, you can’t use Form 1045 to carry the released foreign tax credits to earlier years.
5. Lines 10 Through 32—Computation of Decrease in Tax: Figure the amount of decrease, from the carryback, in tax previously figured for each tax year before the tax year of the NOL, net capital loss, or unused credit.
6. Line 33—Overpayment of Tax Under Section 1341(b)(1): If you apply for a tentative refund based on an overpayment of tax under section 1341(b)(1), enter it on this line. Also, attach a computation showing the information required by Regulations section 5.6411-1(d).
7. Signature: The form must be signed and dated. If Form 1045 is filed jointly, both spouses must sign.

How to Submit Form 1045

To submit Form 1045, follow these steps:

1. Complete the form with the necessary information, including the computation of the NOL and the amount to be carried back or forward.
2. Attach copies of the required forms and schedules, such as Form 1040, Form 4952, Form 461, Schedules K-1, K-2, and K-3, and any application for extension of time to file your income tax return.
3. File Form 1045 with the Internal Revenue Service Center for the place where you live as shown in the instructions for your income tax return.
4. The IRS will process your application within 90 days from the later of the date you file the complete application or the last day of the month that includes the due date (including extensions) for filing your income tax return.

Need Help with other Finance or Startup Questions?

Choose Pilot for expert bookkeeping, CFO, and tax services, catering to thousands of startups and expanding businesses. We pride ourselves on processing over 10 million transactions and providing top-notch expertise in enhancing business growth. As the leading accounting firm focused on startups in the U.S., our goal is to help you thrive. Get in touch with our sales team or check out our demo for more information!

‍