Interesting Tax Program Comparison

annie1956April 12, 2008

Had Mom's taxes to do this year - she's 82 and uncle had decided to not do them anymore. (He's done them for the past 25+ years - she's widowed). So since I do ours online - what the heck.

She gets SS, 4 1099-r's, 4 1099-int's, 8 1009-div's, no mortgage, has real estate taxes, donates to charities with checks & some medical to deduct (i.e. about $10k worth of deductions) - Think it would be a piece of cake. She has no taxes taken out of anything and pays quarterly estimated taxes. BTW - we're in NJ

So - since uncle used TuboTax -

result #1 owes Federal $587 NJ $0 - since TurboTax makes you pay I thought, I used Taxactonline - I'll try that

result #2 owed Federal $612 NJ owes $149 - wait a minute!!!

Let's try again - H&R Block - they advertise that they FIND you money -guaranteed

result #3 owes Federal $356 NJ $0

So - since she's 82 - I went with H&R Block, if she gets audited, I'll go.

But - can you believe it?

RA

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turnage

Very interesting. Do you know where the differences were? For instance, was the taxable income the same on all three returns?

I hope someone who knows more about this can offer some insight.

The thought of telling my 78 year old mother that maybe she didn't really owe $984 makes me itch!

    Bookmark   April 13, 2008 at 6:17AM
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annie1956

turbo tax
30902 adjusted gross
16922 taxable income
1903 tax
1342 payments
14 penalty
575 tax due (oops - off on my orig post)
taxact
30992 adjusted gross
17019 taxable income
1918 tax
1342 payments
36 penalty
612 tax due
h&r block
28231 adjusted gross
14214 taxable income
1498 tax
1152 payments
356 tax due
Don't know why it's different - I put in the same income the only thing that kept confusing me were her quarterly payments - the way they ask the questions. Actually H&R block was the only one that has you put the dates and amounts in of when the payments were made -so I don't know?
And on the NJ side - I don't know if Taxact (since it came up with her owning $149) doesn't have all of the correct calculations to transer over. My Mom hasn't had to pay in NJ for the past years - so I knew that one wasn't right.
I didn't ours with Taxact - with a refund - and now may "redo" the IRS in H&R Block just for fun.

    Bookmark   April 13, 2008 at 8:14AM
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jlhug

How much were her itemized deductions?

I suggest printing out all 3 returns and doing a line by line comparison. Then adding the 1099INTs to see if they match what is on line for interest, the 1099DIVs to see if they match, the 1099Rs, the estimated payments, etc. to see if they match what is appearing on the tax return. The AGI difference on the Block program makes me think there is a data entry error.

Somewhere there is a difference in how you input the data. The tax programs will not vary if the data is input correctly.

Tax programs have to meet standards set by the IRS. The only way there could be that big of a variation in the balance due is a data entry error.

Email me if I can help. I'll do it by hand if you want.

    Bookmark   April 13, 2008 at 2:20PM
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jlhug

What form is she using?

When you use the term "tax", what line on the form is that number coming from?

Is she claiming any tax credits?

The amount of tax you are giving us is not correct for the taxable income you gave us unless she is claiming some credits.

    Bookmark   April 13, 2008 at 2:34PM
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kframe19

I've used tax act for a number of years now.

For the first couple of years I also did them with Turbo Tax just to figure out if TA was worth what I was paying for it :-)

No difference at all.

    Bookmark   April 13, 2008 at 2:49PM
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annie1956

All of the 1099int's add the same, the 1099div's add the same, the 1 difference is in a 1099r- one of hers has it checked not known tax impact or whatever and nothing in box 2b (?) and I had a battle with H&R block program to let it go through with nothing in that box (it was from when my dad died that she's been getting for 30 yrs ) - which could be the difference in the adjusted gross income.
She used the long form - and "tax" is what her total tax due for the year is. I don't know about "tax credits" except for the quarterly payments she pays. Then I went line by line on all the deductions to make sure they were all the same. (Maybe I should try to do it the old fashioned way - pencil and paper yuck - and see what I get - and they would probably be another answer)

    Bookmark   April 13, 2008 at 7:39PM
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jlhug

I suspect that you have convinced the Block program that nothing is taxable from the inherited pension (Is this an IRA?) which is probably wrong.

I am concerned that the amount of payments is different in the Block program.

I strongly suggest that you find an experienced tax person to review the returns and determine which is right.

    Bookmark   April 13, 2008 at 8:17PM
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Chemocurl zn5b/6a Indiana

I'm curious why 'payments' wouldn't be the exact same thing on all 3. Since she has nothing taken out on anything, it would be the total of her quarterly payments...right?

Good luck!...it's getting down to the wire.

Sue

    Bookmark   April 13, 2008 at 8:23PM
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jlhug

Exactly my concern, Chemocurl.

Doing your own taxes using any of the programs that are available is great, but you have to understand tax laws and understand the questions that are being asked. If you don't understand, you have to be able to recognize that you don't understand and do the research so you do understand.

We have a saying at work - we know what we don't know and aren't afraid to admit it.

    Bookmark   April 13, 2008 at 9:51PM
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annie1956

That is possibly correct about the retirement - however wouldn't it have "assumed" it to be the "common rule method" (?) which is what I guess the otherprograms did? I don't know if it was a 401k or not - to be honest did they have 401k? back in 1970's when he died? - this is the first I ever seen ANYTHING about my mother's finances - ever. (We're not a real open family - and I'm "it"). I'm only going on the statements.
On the payments - the other programs asked tax payments in 2007 and any 2006 payments made in 2007 - which was a yes - that's what I think bumped up the number. H&R didn't ask it that way - just asked the dates of the estimated 2007 payments. $288 a qtr. I have really tried to looked each item up as it comes along to see if I'm doing it correctly which is why I was so surprised when the totals where so different.
Thanks so much for all your input

    Bookmark   April 14, 2008 at 10:41AM
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dockside_gw

Back in the 80's, when the AMT first appeared, I tried to do my tax return, using my prior year's tax return (prepared by a tax preparer) as a guide. There were a few different lines so it didn't make much sense. Called the IRS and they were unable to help and told me to come in and they'd go thru it with me. Nonsense. I spend enough time with tax preparation. Not going to spend more. So, I put in what I thought were the right numbers and decided that, if they weren't, the IRS would let me know. The addl tax I might have to pay was worth the time I saved. Never heard from the IRS.

If something doesn't get entered correctly, the IRS will catch it and let you know. Won't necessarily result in an audit. Just a notice for money due, with interest) or a refund.

    Bookmark   April 20, 2008 at 5:19PM
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