All Posts

What is the code in box 7 of the 1099-R?   Normally you should enter the 1099-R from the IRA as is.  Turbotax will say something like, "this distribution is taxable. Let's ask about some situations that might reduce your tax."  The next screen should have options like rollover and conversion.  

I have been receiving 1099Q’s for distributions for education expenses for over a decade and they have NEVER had an amount for box 2 and 3. In the fall I had to roll one over because my son was turning 30. I researched with Vanguard for hours, and the final answer is they don’t keep track of basis or earnings. All my funds (4 kids) basis’ are calculated on our tax return and forwarded to the next year’s return. The calculation is taken from publication 970 and factors in expenses + taxable amount. There is no way the financial institution would have access to your basis without you annually notifying them. That is why my 1099Q’s box 2 and 3 have always been blank. After rolling over ESA, I had to write a letter to give them my basis from my taxes. Turbo Tax needs to remove the mandatory input for boxes 2 & 3 because I can’t proceed without inputting. I thought I could probably figure out since I’ve been doing my taxes for years, but that’s why I buy Turbo Tax, so they can do the calculations. I’m a little concerned to put in an amount that isn’t on my 1099Q.  

Don't worry, this is correct in both calculation and method. Since your calculation result (35,145) uses the 24% tax rate, and the TurboTax Line 22 result (35,158) are so close, I assumed that they were off by 1 bracket, and that math works out: (206,045 x 0.22) - 10,172 = 35,157.9 (rounded for tax reporting), and for purposes of the Qualified Dividends and Capital Gain Tax Worksheet, that's the rate to use (based on the numbers you've provided).   While the first column in the Tax Computation Worksheet is labeled "Taxable income. If Line 15 is--" which refers to the amounts on Form 1040, you don't pull the 1040 Line 15 amount over. Pub 17 states: Note: If you’re required to use this worksheet to figure the tax on an amount from another form or worksheet, such as the Qualified Dividends and Capital Gain Tax Worksheet, the Schedule D Tax Worksheet, Schedule J, Form 8615, or the Foreign Earned Income Tax Worksheet, enter the amount from that form or worksheet in column (a) of the row that applies to the amount you’re looking up.   Since the amount you're looking up is "At least $100,000 but not over $206,700" (206,045), then you'd use the first row, at a rate of 22%, to figure the tax.   Good work reviewing and double-checking your tax forms before filing! 

The TIN (taxpayer identification number) for a business will always be 9 digits with a dash between 2 and 3. XX-XXXXXXX.  If you only enter the numbers, turbotax will automatically put the dash in the right place.  If the 1099-R has the dash in a different spot, it is wrong and you should just enter the numbers.   You might be looking at an account number, instead of the TIN.  The account number can be any format the bank likes, and entering it is optional.  If you want to include the account number and Turbotax doesn't like dashes, just enter the numbers.  

It looks as though the desktop version would be the best for working with the issues that you're having.  The sale of a rental property should not be that difficult to enter.  But the missing depreciation is only do-able in the desk top version.   Here is how to switch to the desktop version from online.   The rules about depreciating the wrong value are not as much fun.  TurboTax will not let you simply "change the basis to what it should have been" because that is not how the IRS rules work.  As far as the IRS is concerned if you missed the depreciation that you should have taken because you made a mistake 29 years ago then you adjust the current figures to show that you DID take the depreciation.  You need to include "catch-up depreciation" on your current return and send a request to the IRS for a change in accounting method.   Unless the adjustment was totally in the value of the land - the non-depreciable portion of the sale.  In that case it would just be added to the land basis.   You're going to need to file form 3115 to add the depreciation in for this year as part of the sale.  Here is a good discussion on why and how to use form 3115.     @kdclaiborne

You have the option to report the sale separately from the retiring the assets.   Report that you stopped using all the assets on the day in 2024 when the property was no longer used as a rental. You need to edit each asset to enter the date. Report that you didn't rent the property at all in 2025. You should see a warning note that TurboTax will delete all information about the property, and you will need to save your records should you sell it in the future. Report the sale of the property under Investment Sales (Form 1099-S, even if you didn't receive that form). Basically, you report the sales proceeds and selling expenses, then use your adjusted basis (cost less accumulated depreciation) to determine the capital gain or loss on the sale.   Note that if you have another Rental Property, you can add the carryover losses to the sold property from the "Situations" page by checking the box for "I have passive activity real estate losses carried over from a prior year."

@AmyC  said: If the parent qualifies for AOTC and claiming dependent: What you should enter to get the credit. Enter the 1098-T box 1 $4000 box 5 zero   What the student should enter: Box 1 amount was $8300 but parent took $4000 this leaves $4300. Student will enter $4300 box 1 Box 5 full scholarship amount of $19000   I concur with that advice.  If the student has some book and computer expenses, those can be entered to reduce the taxable amount.  But it isn't necessary, in your case, as the current taxable amount $14,700 (19,000 - $4300 = 14,700)  is less than the $15,750 filing requirement.  Technically, he does not need to file a tax return.  Some experts recommend that he do so, anyway, to document the reporting of the taxable scholarship amount that frees up the tuition that allows the parent to claim the tuition credit. 

If the return has already been filed and accepted, you won't be able to make any changes.    Otherwise, If you haven't filed your return yet, you must change your refund method to standard direct deposit.   In your Intuit account, click in the "File" section. Select the option detailing your refund method and click "Remove" or change from the "Up to 5 days early" option to standard direct deposit. Even though the early fee is already presented as an option, you can just click the “No thanks” box.

Yes and yes. Your son has 1098-T with an empty box 1 for tuition and box 5 has a $16,000 scholarship.  The 1098-T will not go on your return since there are no educational expenses to claim for a credit.  Instead, your son will file a tax return and enter the 1098-T. Line 5 scholarship not used for educational expenses is taxable income.  The scholarship income also counts as income for the kiddie tax. See What is the Kiddie Tax? @alve87

The correct response to Schedule Q is "yes". While you are correct that the LLC is a "disregarded entity" for Federal purposes (meaning its income flows directly to your Schedule C), Kentucky law requires a single-member LLC (SMLLC) to file its own Form 725 to pay the Limited Liability Entity Tax (LLET).    If you answer "Yes" on Schedule Q, Kentucky requires you to attach Schedule DE. Since your Federal return shows income under your SSN, but your Kentucky LLET return shows income under the LLC's FEIN, Schedule DE tells the state exactly which individual "claims" that disregarded entity's activity.     Although this may feel unnecessary, the state sees this differently. From the state's perspective:   Form 725 calculates the LLET (the tax for the privilege of doing business in KY). Schedule DE connects that LLET-paying entity to the Form 740 (Individual Income Tax) return you file as a natural person