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Subject: Proposal for enhancement to fix the What-If Worksheet so it can actually be used to compare married filing jointly vs. married filing separately
I’m using TurboTax 2018 Premier Desktop for PC. We created a Married Filing Joint (MFJ) return, making sure when we were entering all the numbers that we specified which person (Taxpayer or Spouse) those numbers belonged to (we have separate bank accounts, separate investments, etc.). So each separate item of interest, dividend, and other things was assigned to either the Taxpayer or the Spouse.
After entering everything, we wanted to run a comparison between what that came up with and what would have resulted if we had instead filed Married Filing Separately (MFS). I went to Forms and opened the What-If Worksheet (easy to get to by clicking Open Form and typing in "What" (without the quotes) and selecting What-If Worksheet). I then checked the "MFJ vs MFS: Perform married filing joint versus married filing separate comparison" checkbox.
Unfortunately, that worksheet ignores the information I entered on who "owns" each number. In other words, it doesn’t use that information that it has in its own database file. What it does do is, it ignores the Taxpayer or Spouse designation and just adds the Taxpayer and Spouse numbers together, divides them by 2, and gives each person half. So, in the worksheet, column 3 (Taxpayer MFS) has the same numbers as column 4 (Spouse MFS), which is totally wrong. Here are examples of categories where it just sums everything up and divides by 2:
Taxable interest income
Tax exempt interest income
Taxable income tax refunds
Short-term Capital gains/losses
Long-term Capital gains/losses
Unrecap'd sec 1250
Capital gain or loss
AMT adjustments and preferences
AMT foreign tax credit
Foreign tax credit
Total investment income
Net investment income
Gifts to charity
There are probably other categories it does the same thing with, but I didn’t use them on our return. At any rate, as a result, the numbers calculated for things like total income, itemized deductions, total taxes, and balance due were wrong.
It makes that worksheet useless for doing the comparison it claims to do, since anyone who actually filed MFS would use their own income, interest, dividends, etc., and not half of theirs and half of their spouses.
I even tried overriding the numbers in the worksheet to correct them, such as you can do in many other places, but it wouldn’t let me (the override option was greyed out).
I called TurboTax support, and spoke to a total of four people about this problem. One of them didn’t understand the problem at all, one of them claimed that the numbers on the worksheet were correct, one of them agreed with me but didn’t have a solution (other than the ones in the next paragraph), and one of them agreed with me and suggested I come to this forum and suggest an enhancement request. They said that besides getting feedback from other users, that TurboTax monitors the forum and would see the request.
Most of the suggestions I’ve read about on the internet or had suggested to me by TurboTax support, say the answer is to create two additional returns: one MFS return per person. This requires either (1) creating two brand-new returns from scratch and reimporting or reentering data manually that was already previously imported or entered in the joint return, or (2) making two duplicate copies of the joint return and then changing the filing status to MFS and carefully deleting all data for the "other" person in each of those returns. Obviously, if you create two additional returns, you can get the answer you want, but it just doesn’t make sense to have to do that when all the data is in the joint return already. It takes a lot of additional time and effort, and is error-prone.
I’ve also seen suggestions for using TurboTax’s TaxCaster, but again, everything has to be re-entered and it’s not nearly as complete as an actual return.
If the What-If Worksheet would simply pay attention to who "owns" each item of interest, dividends, etc., and allocate them to the appropriate person’s column, all of that would be unnecessary. Additionally, if you could override any of the numbers in the what-if columns, it would truly function as a what-if tool because you could try any numbers you wanted to see what effect they would have.
So to summarize, my proposal is for TurboTax to fix the What-If Worksheet so it pays attention to the Taxpayer/Spouse designations that were entered by the user and stored in its own database, and allocate those numbers correctly to the appropriate column in the worksheet. Additionally, allow numbers in the What-If Worksheet to be overridden so it can truly be used as a What-If tool.