For anyone doing their taxes via software, double-check the forms and worksheets

[statsman]

I just submitted our taxes (federal and CA) this afternoon, and the returns have already been approved. The problem is when I went to save the forms and worksheets in PDF (TurboTax), I noticed one of the worksheets had some additional numbers that shouldn't have been there.

The error deals with the basis calculation of the house we sold last year. My mistake was looking back at the house we sold in 1995 and the deferred capital gains when we purchased the latter house we sold in 2018. For some reason, while going through the various menus in TurboTax, I entered in a couple of closing fees and the title insurance we paid in the sale of the house in 1995. The problem is those costs (~$800) are already accounted for in the basis adjustment when I filed Form 2119 in 1995.

So, now I need to file amended tax returns, something I've never had to do in 40 years of tax filings. But, if I understand correctly, I can't amend the returns until the payments to federal and CA are processed. I did set those up for later this month, rather than near April 15. I guess I was paranoid about this year's returns, which also included a part-year return in CA since we moved to TX in October 2018.

Just a reminder to look closely at the forms *and* worksheets rather than rely on the step-by-step process with TurboTax or any other tax preparation software. Ugh.

 

[AS2019]

Yes. Go through the final return line by line. Last year I managed to import my TDAmeritrade data to TurboTax twice, resulting in a $3,000 overpayment. I'm not sure how I did that, or why TurboTax didn't catch it. Definitely user error on my part, but I've become accustomed to software that warns you "hey, you already imported that data. Are you sure you want to import it again?"

That said, for my relatively simple tax return, I still think TurboTax does an excellent job.

 

[Tree-dweller]

While I have not knowingly had an issue with tax software (yet), I’ve wondered if the fact that the software is still periodically updating between January and April suggests it’s wise to wait to file closer to the deadline. (Not that I do...)

 

[statsman]

I'm certain the issue was with myself and not TurboTax. It's just that when you are filling out a section of the forms you haven't done before and/or are dealing with a lot of information, it is easy to overlook something.

 

[statsman]

I'm an idiot. Well, not really. But I've determined what I entered into TurboTax and e-filed was indeed correct. My confusion stems from the fact that I was dealing with two house sales, the first house which sold in 1995 and had capital gains deferred, and the second house which sold last year.

The various costs for title insurance, recording fees, legal fees, etc. were identical for the sale of the first house and the purchase of the second house back in 1995. I was mixing the two up and assumed what I had entered were the costs from the sale of the first house, which were already accounted for in Form 2119.

What I had entered were indeed these costs in the purchase of the second house in 1995. Note: Usually the seller paid those costs in 1995, but they accepted our underbid on the second house with the agreement we would pay them.

In short, no amended return is needed (as of now!).

 

[SecondCor521]

I check things over probably four or five times and several different ways before I file. Even after doing that, I sometimes find an error a year or two later.

I DIY with Free Fillable Forms. My tax return is about 11-12 pages long, so it's of moderate complexity. But I'm cheap, so I like the price, and I don't like having to wade through the interviews and irrelevant questions when I know (or think I know) I just need to put this dollar amount on line 12 of Schedule D or whatever.

ETA: My Dad had a tax return prepared by a highly regarded local CPA firm last year. Even though I provided them with all of the documentation and data, I discovered this year that they failed to take a deduction that would have saved a hundred or two hundred dollars on the trust's state income tax bill. My point here is that even highly paid CPAs make obvious errors.

 

[BOBOT]

I too use Free Fillable Forms. A bit cumbersome but no big deal. This year required a little more attention as the tax "reform" changed the format of the 1040 & the associated forms & schedules.

 

[CardsFan]

I use Turbotax. I will complete the return as early as possible (when brokerage statements are available), then sit on it for a few weeks. Already done for 2018. Then I go back and look at everything and file. I seldom find a correction, but have on occasion. I will probably file next week. A few hundred back from the feds, and I owe a little more than that to the state.

On a side note, I find it humorous that this forum has a thread to "Blow that dough", at the same time folks are trying to save $10-$20 on tax software. And sometimes its the same people.

 

[SecondCor521]

On a side note, I find it humorous that this forum has a thread to "Blow that dough", at the same time folks are trying to save $10-$20 on tax software. And sometimes its the same people.

I'm trying to Blow the Dough, but it's hard for me. I still feel more comfort, and even possibly more happiness, in saving money. Either way, it's all good.

 

[CardsFan]

I'm trying to Blow the Dough, but it's hard for me. I still feel more comfort, and even possibly more happiness, in saving money. Either way, it's all good.

I was not meaning to target you, just a general observation. And I too have been known to shop "frugally". A hard habit to break.

 

[Jerry1]

When they do tests of software and preparation firms, the taxes rarely come out the same from one to the other. Point is, there’s all kinds of issues with taxes, including many errors. Turbo Tax handles amendments just fine. Wait until April 15th and send in your amendment. You might get a corrected 1099 between now and then anyway. Most important is to relax and not to worry if you get a call from the IRS about sending the police to your door.

 

[Jerry1]

On a side note, I find it humorous that this forum has a thread to "Blow that dough", at the same time folks are trying to save $10-$20 on tax software. And sometimes its the same people.

Completely consistent behavior. Willing to spend money where there is perceived value even if that is a vacation, new car, whatever. Tax software is close to being a utility. No perceived value there. Also consistent because the behavior of saving a few buck here, lets one blow a few bucks there.

My dad paid for the cruise when we went to Hawaii. His wife and me and DW. He turned 80 and I turned 50. He and his wife kept getting caught trying to sneak wine onto the ship. He was okay with dropping around $20k for a cruise but not $5 (or whatever it was) a glass for wine. Yep, totally reasonable

 

[audreyh1]

On a side note, I find it humorous that this forum has a thread to "Blow that dough", at the same time folks are trying to save $10-$20 on tax software. And sometimes its the same people.

It’s not contradictory. Just because you decide you’ll spring for first class doesn’t mean you aren’t going to try to get deals on stuff.

 

[Marc]

I use TaxAct Online. I have used it for a number of years without an issue. This year I decided to use an automatic import from Fidelity. I have no idea if my error or software error but I also ended up with duplicate entries. I removed all the auto imports and just inputted from the Fidelity statements.

Marc

 

[pb4uski]

Yes. I have a spreadsheet for planning that has a reasonably detailed tax calculation andI reconcile that to my return before I file... the process also informs improvements in the spreadsheet.