Net operating loss (NOL) is a term used in the United States tax code to refer to a business or individual with more deductions than income in a given tax year. When this occurs, the company or individual is said to have an “NOL” for that year. An NOL can be created by several things, including business expenses, personal losses, and charitable contributions. Once an NOL is created, it can be used to offset taxes owed in future years. This can be helpful for businesses and individuals who have sporadic income or who experience losses in some years but not others. There are some restrictions on how an NOL can be used. For example, an NOL can only be used to offset taxes owed in future years, not taxes owed for the year in which the NOL was created. Additionally, an NOL can only be used to offset a certain amount of taxes owed; any excess NOL will generally be carried forward to future years.