TurboTax Early Rounding Issues creating LARGE variances between TurboTax Produced Return and Brokerage 1099-B Data

[mjrengaw]

@Jonelle0  Exactly correct! But for some reason the TT folks that post here can’t seem to grasp the concept. And of course there is the fact that TT did it correctly in all prior years!

[fanfare]

Even for Schedule D, which I presume is a schedule, the instructions say to 

'round at the end after all summation"

Schedule D Part 1 was replaced with Form 8949. that instruction didn't carry over.

(That's no excuse.)

[10Kosmo]

Lost $2 in capital loss due to rounding by TT

[10Kosmo]

1099-B is rounded off even if it is downloaded directly from the brokerage site into TT - that's a huge problem!

[10Kosmo]

@MaxTax00 

Schedule D Instructions heading Specific Instructions  
Rounding Off to Whole Dollars clearly states, "If you have to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round off only the total."

2020 Instructions for Schedule D (2020) | Internal Revenue Service (irs.gov)

TT has been claiming that rounding off in 8949 is allowed, but it is missing Schedule D specific instruction. Hope this helps.

[rs74188]

I am a Schwab customer. I started entering my stock buy and sale transactions and TT asked "covered" or not "covered" on all transactions. What is TT asking for , is rounding up the figures? 

[Geoffl10]

Dear TurboTax,

April 15th is rapidly approaching.  Just a friendly reminder. If a fix is coming, it should come soon.  

Geoff

[seedpearls]

@mjrengaw  I agree, I don't think they would admit any errors.

How do you fix it manually?  I mean, do you fix it line by line?  or do you make a one line adjustment?  If you fix it line by line, do you change proceeds or cost basis?   Trying to figure out the best way to do this. 

[sophieluu1606]

Fixing each line doesn't help because Turbotax already got the right number to the cent for each line but they still rounding it and thus creating the large difference at the total (which is the current issue). Well unless you can figure a way to round them on line level and still get the total correct at the end then you can try correcting by line.

The only viable solution I have seen so far is to skip individual sale and just put the summary line totaling all cost, proceed, and gain/loss, then attach form 1099-B (which you have to mail in separately).

[seedpearls]

@sophieluu1606   

Thank you for the suggestion.  Do you mean bypassing Form 8949?   Correct me if I'm wrong, but I don't think I have this option as I have to adjust certain cost basis for espp and stock option. I also have some wash sales.

[sophieluu1606]

You can look up Exception 2 for Form 8949 on IRS website. Technically the requirement is to report sales with adjustment on "an attached statement containing all the same information as Parts I and II and in a similar format" as form 8949, but 1099-B seems to work. When you elected to only put in summary of sales instead of importing/typing individual sales, Turbotax will give you instruction to print form 8453 and mail it with your 1099-B - doesn't seem like Turbotax support attaching 1099-B electronically yet.

[vpeppen]

If you do not want to mail stuff to the IRS, you have to enter some data manually. To see what you have to enter you should run a dummy return, where you do not enter any data; only download 1099-B(s) from brokerage(s).

Then go to Forms and look at (and print) Sched D and the 8949s the program generated. The 8949s will only show the transactions that have adjustments (Wash sales, A or D will be checked), and transactions where the cost is not reported to the IRS (B or E will be checked). The other transactions are lumped on line 1a and line 8a of Schedule D. The IRS does not require that the transactions on line 1a and line 8a are transmitted with e-filing and that is why you do not have to enter them individually: You just report the total of these transactions. All the other transactions have to be entered manually (All these entered amounts will be rounded), but most likely there will not be that many transactions to enter. To get the not-rounded total for short-term transactions, add the non-rounded proceeds and cost of the short-term items that are not on line 1a and subtract them from the total proceeds and cost for the short-term transactions. Do the same for long-term transactions. Now start the real return and arriving at the 1099-B,  use the step-by-step mode, with "I type it myself". First use "I'll enter a summary for each sales category" and enter the 1a total proceeds and cost (Category A). Do the same for the 8a items (Category D). To enter the other transactions, choose "I'll enter one sale at the time" with the right category and enter each transaction as shown on the dummy 8949.

I used this method and it reduced the rounding error from $76 to $2. For the Box B and Box E category, you can choose to round up or round down the cost (which is not reported to the IRS) to achieve an even more accurate total for the gain.

[mjrengaw]

@vpeppen And then after you go thru all those manual gyrations to produce an actually accurate return exercise the TT 100% Accuracy Guarantee and get your money back from TT! If they don’t fix their error I will be doing exactly that....oh and if they try to wiggle out of that guarantee you can use their max refund guarantee instead which guarantees that the program will ensure you don’t pay $1 more or less than what you should. As TT currently exists my tax liability is MORE than it should be if TT was doing the calculations accurately.

[PlotinusRedux]

I agree completely with @mjrengaw -- if TurboTax cannot produce an accurate return and I have to manually work-around by mailing in my 1099-B's, it is nigh useless, and I will be asking for a refund.

As far as I'm aware TurboTax itself has not even acknowledged this problem much less committed to fixing it.

This is an unacceptable bug in a what purports to be an accurate means of calculating and electronically submitting tax returns, and it is shocking to me that any company would refuse to even address a bug that affects to many of its users.

Frankly I can never trust this company again, and will recommend to everyone not to use it.

On as side note, it encourages people to let it automatically use OCR to pull information from PDF scans of various forms.  My daughter uploaded her 1099-INT from cashing in a US Savings Bond.  Box 1 "Interest Income" should have been blank--instead it had $1,099.00.  Fortunately my daughter caught it--it literally read Form 1099-INT to mean $1,099--and this is a US gvt form mailed to everyone that cashed in a US Saving Bond, not some unusual format generated by a private company.

[rushilpatel]

Is this resolved ??

I have tried using both online and desktop versions and I am getting stuck on each. 

Although desktop version did import all my 1099-b transactions but it get stuck on : Investment Income -> Stock, Mutual Fund , Bond other. (needs review)

TT please help