TurboTax flaw

[COcheesehead]

I had the same issue with Form 2210 - I started with the 85% waiver language attached, then it went through two more checkmarks on the form. I went and filled out the form directly in Turbotax and it still sent me errors. I had a refund coming from overpaying estimated taxes. I finally printed out my tax form and sent that in and received my tax rebate this week. This was the first year I've ever had to deal with that form - hope it doesn't happen in 2019.

I just ended up mailing mine too. I got my refund in about 3 weeks. Hope this was a one year glitch.

 

[audreyh1]

This sucks. I hope we can override and eFile.

The 85% thing only applies for 2018, so it should not happen next year.

 

[RetMD21]

TT is annoying. I don't like reentering my routing and account number every year.

 

[audreyh1]

TT is annoying. I don't like reentering my routing and account number every year.

They don't have that information from us as we use EFTPS.

But frankly I'm glad they don't save that sensitive information and require you to reenter it.

 

[RE2Boys]

Hot from the IRS and another software change:

1. IRS Expands Penalty Relief for Taxpayers Whose Payments Fell Short in 2018
The IRS provided additional expanded penalty relief to taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year by lowering to 80 percent the threshold required to qualify for this relief. The IRS is now waiving the estimated tax penalty for any taxpayer who paid at least 80 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two.

The revised waiver computation will be integrated into commercially-available tax software and reflected in the forthcoming revision of the instructions for Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts. The IRS urges everyone to take a Paycheck Checkup and review their withholding for 2019. Additionally, the updated Withholding Calculator is now available on IRS.gov.

 

[audreyh1]

We haven’t tried submitting our return as we aren’t quite finished, but I reviewed the instructions for the 2210 and they say to check all reasons that apply for not owing or reducing a penalty. So we have both the 85% waiver and the uneven income cases checked. It should submit the full 2210 including the 2210 AI, so I’m thinking that it should go through OK and we won’t get an error due to incomplete 2210.

Or at least I’m hoping.

 

[cathy63]

TTax included form 2210 in my Mom's return. She had the 85% waiver box checked and it attached a text statement saying that it was requesting the 85% waiver. Her return was e-filed and she already got her refund.

The entire 2210 was not needed, because TTax should have been able to figure out that she didn't owe a penalty based on the dates for her estimated payments, but the IRS didn't seem to object to her filing it anyway.

 

[audreyh1]

TTax included form 2210 in my Mom's return. She had the 85% waiver box checked and it attached a text statement saying that it was requesting the 85% waiver. Her return was e-filed and she already got her refund.

The entire 2210 was not needed, because TTax should have been able to figure out that she didn't owe a penalty based on the dates for her estimated payments, but the IRS didn't seem to object to her filing it anyway.

Thanks, good to know.

 

[zesty]

As an extreme example, if you earned a lot of money in Q1 2018 and created a tax liability of $10,000, and then sent in an estimated tax payment of $10,001 in Q4 2018, then your estimated tax payments would exceed your liability but you still might owe an underpayment penalty.

Is this something that the IRS can realistically determine apart from an audit?

 

[SecondCor521]

Is this something that the IRS can realistically determine apart from an audit?

It would depend on the nature of the income. If it was from stock sales, then in theory they could calculate at least that part of the tax liability. But I doubt they do.

 

[audreyh1]

I believe it is still possible to have an underpayment penalty even if the total of one's estimated tax payments exceeds the tax liability. This is because estimated tax payments are treated differently from withholding. Withholding at any point in the year can cover an income tax liability created at any point in the year. But with estimated tax payments, the timing of receipt by the IRS in relation to the creation of the income tax liability can affect whether an underpayment situation exists.

As an extreme example, if you earned a lot of money in Q1 2018 and created a tax liability of $10,000, and then sent in an estimated tax payment of $10,001 in Q4 2018, then your estimated tax payments would exceed your liability but you still might owe an underpayment penalty.

MichaelB, I'm guessing that the total of federal income taxes withheld was less than your tax liability? If so, TurboTax was probably correct in filling out Form 2210. Although there are other options on Form 2210 besides requesting a waiver, so it should have asked you about that.

Not for 2018. All the timing issues for estimated taxes have been waived for 2018 as long as you paid 85% of the taxes owed by Jan 15, 2019.

 

[audreyh1]

Is this something that the IRS can realistically determine apart from an audit?

Not really, so you need to save documents that support your income timing.

But not for 2018 .

 

[COcheesehead]

TT is annoying. I don't like reentering my routing and account number every year.

Would you really want them to retain that...
#wirefraud #forgotyouchangedaccounts

 

[audreyh1]

Would you really want them to retain that...
#wirefraud #forgotyouchangedaccounts

Agreed!

 

[SecondCor521]

Not for 2018. All the timing issues for estimated taxes have been waived for 2018 as long as you paid 85% of the taxes owed by Jan 15, 2019.

Interesting. I knew about the lower threshold percentage (which was further lowered to 80% just a few days ago), but I understood that to be just for the threshold amount and the timing of income would still matter. But it seems you are correct.

https://www.irs.gov/newsroom/irs-ex...t-in-2018-key-threshold-lowered-to-80-percent

"This means that the IRS is now waiving the estimated tax penalty for any taxpayer who paid at least 80 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two."

 

[RunningBum]

Is this something that the IRS can realistically determine apart from an audit?

IIRC, Turbo Tax figured it out for me one year, so I presume the IRS could as well.

 

[audreyh1]

Interesting. I knew about the lower threshold percentage (which was further lowered to 80% just a few days ago), but I understood that to be just for the threshold amount and the timing of income would still matter. But it seems you are correct.

https://www.irs.gov/newsroom/irs-ex...t-in-2018-key-threshold-lowered-to-80-percent

"This means that the IRS is now waiving the estimated tax penalty for any taxpayer who paid at least 80 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two."

Yes, the 85% waiver test is very simple and ignores timing before Jab 15, 2019.

 

[audreyh1]

We’re going to try to eFile tonight and hoping that we can beat the update for the 80% waiver case which apparently will require a paper filing.

This is pretty messy - not being able to opt out of these 85%/80% waivers.

 

[audreyh1]

OK - we'll see if it is accepted!

Edited to add: Just got the return was accepted by the IRS email from Turbotax!


Less than an hour! 27 mins to be precise.

 

[Texas Proud]

I was looking for the H&R block flaw thread but my search skills are lacking...




SOOO, the problem I have is that H&R block will not electronically file if you have a business credit carry forward. You have to have 2 3800s and it will only handle 1. Also, it will NOT fill out the second one leaving it up to you to do.


I have just printed out the return and will be signing and sending in tomorrow or the next day on paper. It has been at least 10 years since I have actually sent in a paper return.

 

[RetMD21]

They don't have that information from us as we use EFTPS.

But frankly I'm glad they don't save that sensitive information and require you to reenter it.

but they do (in a file on my pc.) The worst part was having to reenter for printing the state taxes for mailing 10 minutes after e filing the federal. I chalk that up to punishment for not paying to efile state