NOL
Business & Finance abbreviation · Tax
| Stands for | Net operating loss |
|---|---|
| Categories | Business & Finance |
NOL stands for Net operating loss, a tax abbreviation.
Tax loss that arises when a business's allowable deductions exceed its income for the year, which can be carried to other years to offset taxable income. Federal NOLs arising after 2017 carry forward indefinitely but can offset only 80% of taxable income in any one year.
Example: The startup has $12 million of NOLs that will shelter its first profitable years.
Usage notes
The 2017 tax law largely ended carrybacks, though the CARES Act temporarily allowed five-year carrybacks for losses from 2018 to 2020. After an ownership change, section 382 limits how much of a company's NOLs can be used each year, a key issue in acquisitions. Individuals can also have NOLs, usually from a sole proprietorship or casualty loss.
Related abbreviations
More tax abbreviations
- MFJ – Married filing jointly
- MFS – Married filing separately
- MTD – Making Tax Digital
- NI – National Insurance
- NIC – National Insurance contributions
- NIIT – Net investment income tax
- OASDI – Old-Age, Survivors, and Disability Insurance
- OIC – Offer in compromise
- OSS – One-Stop Shop
- P11D – Return of expenses and benefits (Form P11D)
- P45 – Details of employee leaving work (Form P45)
- P60 – End of Year Certificate (Form P60)