Author Topic: TaxAct curiosity - higher tax due compared to case study spreadsheet  (Read 2739 times)

secondcor521

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In the following situation, TaxAct calculates tax owed at $1,393, but the case study spreadsheet and my hand calculations using the Qualified Dividends and Capital Gains worksheet come up with $782.  What gives?

Form 1040 data:

Line 1:  Filing Single
Line 9b:  $1,700
Line 43:  $17,078

Schedule D data:

Line 15:  $7,558
Line 16:  $7,558
Line 18:  $0
Line 19:  $0

Not filing Form 4952 or any other advanced things.

Any ideas why TaxAct would be higher?  I was hoping to use TaxAct to file this year because it has worked and been cheap in the past, but this discrepancy gives me pause.

I've looked around in TaxAct and it is opaque about how it comes up with the $1,393 figure, so I can't really troubleshoot it.  I could ask TaxAct I suppose, but I am *assuming* they can't chase down everyone's silly question and for such a basic situation they will surely think that it is operator error (and it may well be).

I could plug all of the data into TurboTax I suppose and see what it says.  Haven't done that yet.

Proud Foot

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Re: TaxAct curiosity - higher tax due compared to case study spreadsheet
« Reply #1 on: December 13, 2016, 02:57:02 PM »
What version of TaxAct are you using? Within your return you should be able to open the Federal tab and select the Summary which will give you a summary of your different numbers and you can look there to see if you can find the difference. Or are you using their Tax Calculator?

secondcor521

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Re: TaxAct curiosity - higher tax due compared to case study spreadsheet
« Reply #2 on: December 13, 2016, 04:18:34 PM »
I'm using their online tax prep and filing tool at http://www.taxact.com.

The numbers are the same (as far as I can tell) between TaxAct and the spreadsheet - what I did was copy the info from the TaxAct 1040 into the spreadsheet.  The only difference is the tax owed.

Thanks for the reply!

MDM

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Re: TaxAct curiosity - higher tax due compared to case study spreadsheet
« Reply #3 on: December 14, 2016, 08:55:44 PM »
$782 is what I get also.  Interested to hear what you find....

secondcor521

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Re: TaxAct curiosity - higher tax due compared to case study spreadsheet
« Reply #4 on: December 14, 2016, 10:45:06 PM »
Thanks for the double-check!  I submitted a support ticket to TaxAct...will reply if they do.


secondcor521

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Re: TaxAct curiosity - higher tax due compared to case study spreadsheet
« Reply #5 on: December 15, 2016, 01:30:23 PM »
TaxAct replied!

It's still a little opaque because the instructions they gave were vague and/or didn't match the online user interface.  And now I can't log in to my return.  But there were enough hints in their email that I now understand in general what happened.

Because it's before the first of the year and because I haven't paid them yet because it is just a practice return for tax planning, they won't let me see the whole tax return, just the main 1040.  So the Schedule D entries in my OP were what I thought would be on Schedule D.  It turns out I was wrong.

Line 18 of Schedule D in this case is not $0, but a few thousand dollars ($3,840 I think - not sure because I can't access my return at the moment).  This is because I have a 75% section 1202 capital gains tax exclusion this year.  I mistakenly thought that this meant that 75% of this particular capital gain was excluded from income, but that is not entirely correct.  I apparently still must pay some additional income tax on the excluded amount - this is according to both my reading of section 1202 of the tax code, articles on the web, and TaxAct's behavior.

Because line 18 is not zero, the taxes must be calculated with the Schedule D Tax Worksheet located in the Schedule D Instructions, not the Qualified Dividends and Capital Gains Worksheet that I was using and which is in the case study.

The Schedule D Tax Worksheet is a page and a half, and I don't have the patience to try to work through it now, but it seems plausible to me that this would result in the higher tax owing that TaxAct is calculating.

 

Wow, a phone plan for fifteen bucks!