8949/1099b question

[taxquestioner85]

Hello,

I am working on tax year 2020 taxes on TT and I uploaded my 1099b forms from the brokerage that TT does for you and there is a discrepancy on 8949 that TT completed and the total on my 1099b. It looks like they rounded everything on the form which is different than TT did on the 2019 edition. The difference is 8 dollars..question is this normal and allowed, will the IRS flag this 8 dollar difference between 1099b and 8949?

Thank You

[JoannaB2]

The amount of income and expenses may be entered as is but will be rounded off or drop down to the nearest whole dollar amount in Turbo Tax.  For example, $5.45 will be displayed as $5.00 on the income tax return while $5.60 will be displayed as $6.00

The IRS and the State checks all the income tax returns for accuracy.  The difference of the rounding off and dropping down the numbers to the next wole dollar might be acceptable as long as it is reasonable.

[taxquestioner85]

Turbotax software is automatically computing the rounding. I wish they would have stuck with what they did in 2019 and just round the bottom number so it matches 1099b, the only question and issue is whether the IRS is going to accept this discrepancy between what the rounded 8949 and 1099b state.

[MinhT1]

You do not need to worry. The IRS is aware of the rounding rule and will accept your numbers. The rounding discrepancy in dollars can be as much as half the number of lines you are adding up. In your case, a $8 discrepancy is quite acceptable.

[vulpinepuppy]

@MinhT1 

What if the discrepancy is large due to the rounding? Wouldn’t that be not acceptable? What do we do in this instance? I have wash sales so can’t summarize either and not sure how to fix.

[MinhT1]

As long as the discrepancy is due to rounding individual values, the IRS will accept it.

For example, if you add up 300 transactions, the discrepancy could theoretically be as much as $150.

[taxquestioner85]

I think what the issue is with folks commenting on this problem with rounding is that for 2020 TT when you import your documents straight from the brokerage the software is rounding everything instead of not rounding like with 2019 TT. If we can be rest assured by TT personnel that this is legitimate and not an error in code for TT software that would be somewhat reassuring.

[MaxTax00]

@taxquestioner85

We have a big thread discussing this very issue.  The general consensus on the thread is that even if the IRS allows rounding (not requires), Turbotax should not be rounding at the individual transaction level because it makes life more difficult for their customers and creates the need for workarounds that are unnecessary. You are correct, it was not like this in the past and TurboTax ran much smoother. TurboTax is a software company and it is silly for them to do all this rounding at the individual transaction level when it requires no extra effort for software to make this calculation. 

Thread below....

https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/turbotax-early-roundi...