Tax prep software - check my cpa's numbers

Ronstar

Ronstar

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Picked up my tax returns and MIL's. Surprised to see that I owed the state 5 times as much as in previous years, and MIL owes the feds about 5 times as much as in previous years.

I want to check these returns. I've used turbotax before, and don't mind using it again, but I want something that I could do a state and fed return check for MIL and us. I don't want to file anything - just run a check. I'm not sure if I can use TT without filing the end product.

Anyone have any ideas?
 
yes, TT lets you view tax forms with your numbers without you submitting a return, it's sort of like a print preview
 
Try TaxHawk. Simple federal is free and you can enter your state info, but not follow through. You can see the filled in forms with a watermark. I think another one is AmTax.
 
Can’t you just put this years return next to last years return and see what the difference is? That’s what I would do. Then, if the difference isn’t something you understand or agree with, go back to your tax preparer and get clarification. With the magnitude of differences you describe, the difference should be obvious. I’m surprised the preparer didn’t go over this with you, assuming they did the returns last year. Unless you’re paying them by the hour, you probably should just start by asking the preparer what happened. They might have a year to year comparison they can go over with you. Turbo Tax had a high level year over year comparison that would help in this situation, their software probably does too.
 
TurboTax has both an online and desktop product. You have to pay before you can see the finished returns.

FreeTaxUSA will let you see the returns without having to pay for them.

I do agree with Jerry1 though. If you have paper copies from both years, just lay them side by side and see what's different. Your tax preparer certainly used software, so he didn't make a math error. He may have made typos though, and those should be more obvious if you just compare them line by line.
 
cathy63 said:
TurboTax has both an online and desktop product. You have to pay before you can see the finished returns.
Click to expand...
Just to clarify, you have to pay for the desktop version, but then you can see and print the final forms without any additional payment. With the online version, similarly, you have to pay in order to see the final forms.
 
Jerry1 said:
Can’t you just put this years return next to last years return and see what the difference is? That’s what I would do. Then, if the difference isn’t something you understand or agree with, go back to your tax preparer and get clarification. With the magnitude of differences you describe, the difference should be obvious. I’m surprised the preparer didn’t go over this with you, assuming they did the returns last year. Unless you’re paying them by the hour, you probably should just start by asking the preparer what happened. They might have a year to year comparison they can go over with you. Turbo Tax had a high level year over year comparison that would help in this situation, their software probably does too.
Click to expand...
Just went through MIL's return comparisons for the past 5 years. Huge, huge increase in capital gains in 2024.

I'm fairly certain I'll find the same in our return. We have ss, DW's pension, my annuity (static year to year), and a taxable account. We live in Illinois, so the only place where tax can come from is from the taxable account. And since we didn't buy or sell anything from the taxable account, then the difference has to be due to capital gains.

But in my side by side comparison, my 2023 state numbers on my 2023 return differ from the previous year's numbers on my 2024 return. Odd.

II think the comparison is enough to explain the tax increases from last year. But I'd like to do the math just to give me an understanding.
 
You only incur capital gains tax if you sell something in a taxable account and have a capital gain.
 
aja8888 said:
You only incur capital gains tax if you sell something in a taxable account and have a capital gain.
Click to expand...
True - I should have been more clear - my account is with an FA - so the buy/sells of the underlying issues in the mutual funds created the capital gains. I didn't buy or sell any individual issues.
 
Ronstar said:
Just went through MIL's return comparisons for the past 5 years. Huge, huge increase in capital gains in 2024.
Click to expand...

aja8888 said:
You only incur capital gains tax if you sell something in a taxable account and have a capital gain.
Click to expand...
Or have investments that generate large capital gain distributions.

Ronstar, do you have the 1099-DIVs (and any 1099-Bs) from 2023 and 2024? Any striking differences?
 
Have you tried running your numbers thru this calculator. You can enter your 2024 numbers and then change the Dividends or Capital Gains or other numbers by $100 or $1000 to see the effect of additional taxable account distributions.
www.aarp.org

1040 Calculator Estimates Your Federal Taxes

Use this calculator to estimate your total taxes as well as your tax refund or the amount you will owe in taxes.
www.aarp.org www.aarp.org
 
SevenUp said:
Perhaps it's time to cut the cord with the FA....
Click to expand...

Ronstar said:
Had the same thing with Vanguard.
Click to expand...
If you don't pay any FA, and simply don't change your investments, you would
  1. Save the cost of the FA
  2. Save the cost due to churning your accounts
  3. Not have big surprises at tax filing time
But the choice is yours....
 
SevenUp said:
Or have investments that generate large capital gain distributions.

Ronstar, do you have the 1099-DIVs (and any 1099-Bs) from 2023 and 2024? Any striking differences?
Click to expand...
Significant differences in MIL'S account. 2024 cap gains are triple of 2023. Not so much in ours. I need to talk to FA again (same FA for us and MIL). My thought a few months ago was that MIL's portfolio needed to be made less risky. Some replies here (that made sense) was to have part of the investment mix geared toward the risk tolerance of the heirs. And that's the general thoughts of the FA.
 
SevenUp said:
If you don't pay any FA, and simply don't change your investments, you would
  1. Save the cost of the FA
  2. Save the cost due to churning your accounts
  3. Not have big surprises at tax filing time
But the choice is yours....
Click to expand...
1. Well DW is more comfortable with the FA as we get older (in case of my demise), so I switched to the FA after 40+ years of managing things myself.

2. Churning accounts happens in vanguard index mutual funds similar to FA's mutual funds.

3. Vanguard still had a surprise capital gains at tax time.

I had mutual funds at Vanguard, mutual funds through the FA. Both have/had surprising capital gains at times. The only advantage I had at Vanguard over the FA is the fees. And if the FA makes DW happy, so be it.
 
We have some Vanguard funds, which ones had large taxable gains?
We do have Wellington, in a taxable account :facepalm: and need to sell it and buy it in the Roth instead.
Hate getting those surprises.
 
The 5 times increase in amount "owned" and FA might not be that big of deal. It is not clear if "owed" means total tax, or increase in the size of the check written to Fed/State. If the check to be written is 5 times larger, say $250 vs $50, then it is likely not a big deal. Even if "owed" means the total taxes paid for the year, the amount of increase matters. For example, If the total taxes paid in 2023 were $300 and $1,500 in 2024, then again it is likely not that big of deal. I suspect your IL taxes are minimal, since I believe they don't tax most retirement income, which may mean interest and CG are it. Also, remember you might have made a lot more interest in 2024 due to the higher rates(?).
 
Mark1 said:
The 5 times increase in amount "owned" and FA might not be that big of deal. It is not clear if "owed" means total tax, or increase in the size of the check written to Fed/State. If the check to be written is 5 times larger, say $250 vs $50, then it is likely not a big deal. Even if "owed" means the total taxes paid for the year, the amount of increase matters. For example, If the total taxes paid in 2023 were $300 and $1,500 in 2024, then again it is likely not that big of deal. I suspect your IL taxes are minimal, since I believe they don't tax most retirement income, which may mean interest and CG are it. Also, remember you might have made a lot more interest in 2024 due to the higher rates(?).
Click to expand...
MIL had about $1k tax owed in previous years returns. Now $5k. Not much to most people, but a lot to her.

Ours is not that bad after looking at comparisons year to year.
 
Does you MIL owe feds 5x more, but not owe the state 5x more? That seems odd. Big cap gains should be taxed by both....
 
Ronstar said:
Picked up my tax returns and MIL's. Surprised to see that I owed the state 5 times as much as in previous years, and MIL owes the feds about 5 times as much as in previous years.

I want to check these returns. I've used turbotax before, and don't mind using it again, but I want something that I could do a state and fed return check for MIL and us. I don't want to file anything - just run a check. I'm not sure if I can use TT without filing the end product.

Anyone have any ideas?
Click to expand...
Are you saying your total tax is five times as much as last year?
Or are you saying you owed $50 additional last year and $250 additional this year?
People sometimes confuse the two.

For example, my total Federal income tax for 2024 was around $35,000 and I got a small refund.
I expect my income to grow a few percent during 2025, but if my total income tax for this year was 5x as much ($175,000) then I would say something is seriously wrong...
 
Last edited:
^^ No - the amount due on upcoming 4/15 is 5 times what she paid on 4/15 last year.

As for total tax:
Total 2024 state tax is 2.2 times as much as 2023 tax.
Total 2024 fed tax is 2.9 times as much as 2023 tax.

All due to higher capital gains in 2024 compared to 2023, resulting in an increase of 80% in AGI.

So maybe a 2-3% increase in tax is ok on a 80% increase in AGI.
 
I’m confused. Did neither of you pay estimated taxes? Compare the total tax, not what is remaining to pay on 4/15.
 
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