Turbo Tax annoyances

[explanade]

1) If you have a bond fund with holdings in more than one state and you choose more than one state in TT, it makes all the dividends from that fund taxable, at least for CA.

But actually, after doing some research, it appears that CA will tax all the dividends from a multi-state bond fund (such as VWIUX) unless at least 50% of that bond fund's holdings are from CA bonds.

So it may have calculated it correctly but TT should tell you the CA law/rule.

2) TT tells you that you will get a bigger tax benefit if you use the foreign taxes paid by funds as a tax credit rather than a tax deduction but the default appears to be to apply them to Schedule A as itemized deductions rather than tax credits.

Only later, it shows the option and the advice to take the credit.

3) The way it treats nondeductible IRA is ridiculous.

First the interview asks about the IRA basis as of 12/31/2012. Then it asks for your 2013 contributions.

In my case, I contributed in Feb 2013 for TY 2012 and contributed again in Dec 2013 for TY 2013 (followed by conversion of the tIRA to Roth about a week later).

Well TT thinks I have $6000 excess contribution for 2013.

They really need to have a table to enter your contributions each year, with the date of the contribution (to validate that it was made in time).

Googling around, I've seen other complaints on the turbotax.intuit.com site about how it handles this, particularly in cases where people are converting to ROTH.

One of the questions it asks is your tIRA balance on 12/31/2013. Well if you converted to ROTH in a given tax year, it's likely to be zero at the end of the year. Not sure how it uses this figure but it has a worksheet which should have more transparent fields for entering data. Like I said, I had to enter the two contributions that I made in CY 2013 in a single field (though it lets you break up the figure you enter).

 

[FIREd]

TT can definitely be quirky. To address point#3: did you use TT last year to file for 2012? Did you include the non-deductible IRA contribution made in 2013 for TY 2012 on that return (make sure you filed form 8606 last year)? And if so, did you import last year's TT return to get started with this year's return?

 

[rbmrtn]

One thing I ran into is that TurboTax Free is not the same product as TurboTax Freedom edition. I hit this when doing my mothers tax return, I used it last year as she meets the qualifications. So this year I logged in and started it and they didn't have one of the forms she needed ( had it last year ) ? OK I was in a big rush and switched to another product and had to pay for the state efile. Later I find out I was using the wrong product even though I logged into her account which had been created using the "Freedom Edition" last year. There was no info or link on intuit for the Freedom edition, to get to it have to go through links from IRS. My fault I guess for being in a rush but annoying that it was not presented as an option when accessing the previous account. I ended up paying for something that didn't need to be payed for.

https://ttlc.intuit.com/questions/1...tax-free-edition-and-turbotax-freedom-edition

I'm a long time TaxAct user, I don't like Intuit!

 

[nash031]

You should try having to file state taxes in two states, one for me, one for DW. I have to do both MFJ and MFS every year: MFJ Federal and CA, MFS for IL. Sucks the life out of me for a day or two, but saves us several thousand dollars. Seems like something TT would be able to fix fairly easily since all the data I enter is the same on each return. I've never understood why you couldn't enter the data, including whose interest, dividends, cap gains, etc. are whose, and then have it run both MFJ and MFS, and pull state taxes based on those two returns. I don't get why I need to enter the same stuff twice... oh well, still easier than pencil and paper.

 

[explanade]

TT can definitely be quirky. To address point#3: did you use TT last year to file for 2012? Did you include the non-deductible IRA contribution made in 2013 for TY 2012 on that return (make sure you filed form 8606 last year)? And if so, did you import last year's TT return to get started with this year's return?

I did use TT last year and did import, though the import process this year was different, had me open it (in TT 2013) and then had to save it.

I probably entered the data incorrectly in previous returns, not really caring about how it handled the IRA contributions because I knew I couldn't deduct.

So It had my IRA base as $6000 when it should have been $12000 by 12/31/2012. (I had covered a previous tIRA account to ROTH in 2010).

But the way it handled my two contributions in 2013 (for both TY2012 in February and for TY2013 in December) was where the problem was.

 

[GrayHare]

Now you got me started. TurboTax's UI has never recovered from the product's transition to Windows. The nag screens are wearisome: "Enter your registration info" then "Continue without entering your info?" Then there's the repeated "Guide me" or "Let me choose the sections I want to work on" decision. Or, the "Do you want to import this data from your broker?" which you must say no to 3 times before it displays a checkbox that lets you bypass that nag... for this session only. The foreground/background color scheme remains stubbornly non-configurable: "The '80s called and they want their unfriendly UI back."

 

[meierlde]

I avoid most of that by ignoring the interview, and going to the forms section and just filling in the forms. (There are a number of worksheets that exist at that level to help out) For example there are 1099 Int and Div forms that you just copy the info from the one you get in the mail, forms about state taxes etc.

 

[Options]

My first time using it, so I wanted TT to guide me. It failed to "guide me" to include 1099's or ask me about carryover capital losses. Had to find the forms, upload, and do it myself. Odd.

 

[explanade]

The guided setup works for me but I also go back and forth to the forms to double check.

They will prompt you to import your 1099s and I find it's easier. I can double-check the values before saving the imports.

 

[samclem]

I'm using TT again this year. The state version (Alabama) definitely is a step below the federal version when it comes to handholding/assistance. For example, for "miscellaneous deductions" and "deductions subject to the 2% of AGI threshold" there were virtually no prompts at all, just a blank form for entering them. Which expenses are allowed in AL and not in the federal form? Which ones are subject to the 2% threshold? There's not a clue in TurboTax.

On the federal "Form F" the program said I'd marked some field labelled "CYEXP" as "tentative", but it wouldn;t show me where this was. I finally just re-entered everything on Form F and the glitch went away.

Anyway, I still think the program is very good, but it's not excellent, and not without its problems.

 

[jebmke]

I avoid most of that by ignoring the interview, and going to the forms section and just filling in the forms. (There are a number of worksheets that exist at that level to help out) For example there are 1099 Int and Div forms that you just copy the info from the one you get in the mail, forms about state taxes etc.

Interview mode can become a crutch. It encourages the preparer to not learn the tax laws that pertain to him/her. Often the questions aren't very clear. When you pick up a tax document (like a W2, 1099 etc) you should already know what line of the 1040 each of the numbers on the form will end up on and how it will get there (e.g. which schedule like A, B, C, D) will feed the beast (1040). Then when you enter in the data you can look at the 1040 and confirm that it made it to the right place.

We prepare 400-500 returns a year at my center. I don't allow preparers to use the interview mode in our software. In addition to the crutch factor, working in forms mode is much faster.

 

[bUU]

My biggest beef this year with TurboTax has to do with how it is handling 1099-Bs, in the light of the new "reported to IRS" versus "not reported to IRS" dichotomy. Previously, you could enter sales information, and have TurboTax help you determine the cost basis. For inherited holdings this has been very useful, since the cost basis of the holdings on the day you receive then is not the cost basis you are obligated to use. TurboTax lets you put in the date, and it figures out the cost basis, factoring in mergers, acquisitions, splits, and reinvested dividends. The problem is that it assumes whatever you put in includes reinvested dividends right up to the present. The reality is that 1099-Bs now separate out reinvested dividend lots (really: all lots) purchased since the beginning of 2012 (the "Box A" portion of the 1099-B). So TurboTax is now incorrect with regard to its allocation of the unreported ("Box E") portion of the 1099-B between long-term and short-term. (It's all long-term, because the short-term portion is all in "Box A" now.)

What one has to do is [a] enter the full sale as if you didn't get a 1099-B throwing in the whole reported vs. not reported nonsense; confirm that what TurboTax figures as the short-term portion of the sale matches what the 1099-B says is reported/short-term ("Box A"); [c] take down all the data from the worksheet related to the long-term portion of the sale (acquisition dates, number of shares, purchase price, etc.); [d] delete the sale from TurboTax and re-enter it as two separate sales, entering the long-term portion of the sale manually from the data you noted down. What a pita.

 

[friar1610]

You should try having to file state taxes in two states, one for me, one for DW. I have to do both MFJ and MFS every year: MFJ Federal and CA, MFS for IL. Sucks the life out of me for a day or two, but saves us several thousand dollars. Seems like something TT would be able to fix fairly easily since all the data I enter is the same on each return. I've never understood why you couldn't enter the data, including whose interest, dividends, cap gains, etc. are whose, and then have it run both MFJ and MFS, and pull state taxes based on those two returns. I don't get why I need to enter the same stuff twice... oh well, still easier than pencil and paper.

I moved mid-year and, in addition, took some capital gains to help buy the house in the new state. Some of the CGs were realized in VT; others in MA. Due to some of the quirks in TT, I ended up doing paper returns for both states after having done my Federal on TT quite happily. Next year, with only one state in which to file, I should be able to do both Fed and State more easily through TT.

 

[explanade]

So I got through my 2013 return, filed the federal return electronically.

Was not going to pay $20 for the state e-file, though it printed out 27 pages for the CA return so I may re-think that -- but I'm going to have to mail in a check anyways.

And after that, it showed a screen about the ACA. But I went back to the E-file section to save my state return as PDF to print out later.

Now I can't find the ACA screen again. Seems like all it will do is ask if you have health insurance of some kind but it would be nice if it took the data from your return and calculated whether I'd be eligible for subsidies.

Maybe next year.

 

[pb4uski]

I usually use forms only. If there is something that I can't figure out how to do on forms then I revert to interview. For example, yesterday I was doing Auntie's return and Uncle transferred his IRA to another provider indirectly and I was having trouble figuring our how to report the rollover using forms but I reverted to interview and it was pretty intuitive.