Rounding

[KathrynF]

This is an attempt to pass on information to the software developers. With Turbotax, Estimated tax payments are entered separately and then each payment is rounded by the software then added together and entered on Form 1040. The IRS adds the payments together and then rounds the result. Sometimes this is not an issue, but it caused a difference of $1.25 owed on my most recent return and the IRS sent me a note and someday when they get around to it a bill. $1.25 is no big deal, but it's scary and annoying to get any IRS mail (and waiting for them to decide when to post it and give you an actual total due... with interest) and also annoying wasting a stamp, check and time to pay them $1.25 or maybe $1.26 (that dang interest!). So if the turbotax software can add and round the same way the IRS does it, that would be great. Thanks. 

[VolvoGirl]

Did you send in estimated payments with cents on them?  You didn't send in whole dollar amounts?  Or could it be for the Estimated tax penalty on line 38?  

In the future just pay in whole dollars and avoid the rounding issues.  

[NCperson]

you peaked my interest

1) are you using online or desktop version of TT?

2) what are the 4 estimated payments you made in 2021 (just need to see x.xx - don't need to know the entire  number)

3) in the desktop version, you can only enter whole dollar figures into the estimated payment field.... so I can't umderstanw how what you are describing could occur.

maybe I am not following. 

[KathrynF]

I used Turbotax premium online.

Yes, I made very exact payments - which means dollars and cents. And yes the program allowed me to enter cents. I will not do that in the future. Considering there are cents on W2's I figured it wasn't a weird thing to do. Actually the IRS didn't round at all, so they have me paying $xxxxx.75 and turbotax definitely rounded each of the estimated payments - I tried to change the end number on turbotax because it was higher than the TOTAL calculated in my Form 1040-ES/V record but it wouldn't allow a correction. And I probably should have fudged the individual entries to outsmart the software, but honestly I shouldn't have to outsmart the software. The software should be able to add and then round at the end which would have gotten me closer at least if it doesn't deal with cents.

I'm not sure the IRS will go after $1.25, but they asked me to send them $5.40 before so I am guessing I will be getting a bill here soon or why send a letter.  If turbotax rounded at the end, it would have only been a 25 cent difference.  

[NCperson]

as stated, the windows desktop version will not permit cents to be entered; it has to be to the hearest dollar.

Also, save yourself the stamp (and envelope) ....pay directly at the IRS website.....

[KathrynF]

@NCperson 

$X.60

$x.81

$x.81

$x.53 

- yep all rounded up, so $1.25 more than I actually paid. Smack my head. 

[NCperson]

since these are ESTIMATED payments, I normally round mine to the nearest $100..... it's "close enough" for an estimate. 

[KathrynF]

@NCperson 

sounds good. I only posted here because when I contacted turbotax the "Tax expert" later sent me an email saying "the best way to get this to the developers is the use the following link." I feel like it's just a regular old forum, but what the hell, I tried.

And I got some good general advice and will adjust since the software and the IRS can't do that as easily. 

[Mike9241]

some taxpayers don't know that every amount they enter can be rounded to whole $s. 50 or more up to the next whole dollar.  less than $ .50 cents. every CPA firm that I ever worked for only uses whole $s except in the rare case where the return requires the use of cents. there are good reasons.  many returns are billed based on time spent + computer costs.  entering cents ups the time without significantly affecting the taxes due.  others are billed a flat fee which means the firm nets less when it has to pay employees or independent contractors by the time spent. 

the IRS would be stupid to go after $1.25.   it does cost them money to send out the notice (paper and postage) then they have to open the reply and separate the notice from the check (manual labor) and see if they agree.  then the check goes one place to be endorsed and deposited while the notice goes somewhere else to be entered in its computer system that payment has been made.  (or some similar process)   

yes the USPS does bill the IRS for poasyage. so by the time the IRS gets through with that $1.25 notice they've probably lost $1.25

[Critter-3]

I never heard of anyone making estimated payments with cents on them ... so please stick to whole numbers in the future for your own sake and sanity. 

[NCperson]

@Critter-3 - it does sound like there is a missing control in the mac version as it permits you to enter to the penny, but then rounds to the nearest dollar "behind the scenes".  I wonder why the control is evident in the windows version, but not the mac version. 

[Pookie84]

My tax return was sent to Austin Texas January 28, 2022.  Never received.  Sent by mail and then get a letter from IRS in Memphis, TN? stating NO RECORD of receiving.  SO where do I mail it?

Carol 

[NCperson]

depents where you live...

https://www.irs.gov/filing/where-to-file-paper-tax-returns-with-or-without-a-payment