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

[mjrengaw]

That is correct. Again, if you read back thru the threads on this issue TT changed the way they rounded starting with the 2020 tax year. Again, AFAICT it has been changed back and is now correct for the current tax year, 2021.

I'm going to bow out of this discussion now since for this current tax year, 2021, my imported 1099-B totals and sub totals in TT match exactly to what my broker 1099-B totals and sub totals are. That was not the case for TT for 2020 which is what started this entire discussion.

[mjrengaw]

Many folks here did reference and supply IRS written instructions that say exactly the opposite - that when two or more numbers are used in a calculation they SHOULD NOT be rounded prior to the calculation and that only the result should be rounded. That evidence is here in these threads from last tax season (2021). You can go back and read thru them yourself. Of course folks on both sides insisted, and I suspect still do, that they are right...LOL.

Since, unlike last tax filing season, this tax filing season the totals and subtotals in TT after importing my 1099-B match exactly the totals and sub totals on my broker 1099-B (unlike last tax seasons. 2020, when they did not match) AFAIKT the problem in TT has been resolved so I'll bow out of this discussion. Good luck.

[marmil]

two points- as was noted by another commenter, this is a relatively new change in turbotax-- so it has NOT been around a long time and thoroughly worked out

SECOND-- there is a difference between "MAY use rounding" and "MUST use rounding" -  where does Turbotax get off DICTATING that all users now suddenly MUST use rounding?????? That is a big part of this issue. Particluarly for small business owners, who are linking to business records, and often have numerous 1099s of various types for their revenue - and who actually use accounting principles and REAL NUMBERS in their bookkeeping, this mandated use of rounding is  a nightmare to reconcile with business accounts.........

And while some of you may be perfectly fine with giving the government extra taxes that you do not really owe, those of us who are right on the edge of triggering thresholds that might affect other things- like an increase for a full year in our monthly charge for medicare......or a disqualification for some other benefit...........the REAL NUMBERS MATTER - and it is not TURBOTAX's role to remove that decision from us -- plus this change to force rounding was not well communicated to anyone -- we found it in the middle of doing the tax returns.........

there should be a way to turn off rounding so we can use the real numbers- since it is now clear that TT does not care about fixing this, I will not use it again for the next cycle.........long time TT user, but am fed up

[JillS56]

IRS has required rounding for as long as I have professionally been preparing tax returns and that is more than 15 years.   Every tax program I have ever worked on has automatically rounded the amounts entered.    This is not something that TurboTax is requiring, this is required by the IRS.  

[taxes oh my]

Why hasn’t this been fixed for 2021?  Ugh… my capital gains from TurboTax are not matching those reported to irs on 1099 form, even though I imported from Fidelity!

[NigelTex]

Mine was a mess last year but all was fine this year. I imported from 3 different brokerage firms. Got a refund in 6 days too which amazed me. 

[PlotinusRedux]

Since last year I just decided either TT is doing it a legally optional way or enough people will have done it wrong the IRS will go after TT rather than us.

So the only question left is--when you compare your 1040 line to your actual 1099-B's, did the rounding result in you paying more or less than what your 1099-B's said?

In my case it was a couple of hundred less, so I just filed it--I'm not going to keep fighting to pay more taxes.  If it's *more* by enough to matter, I'd request a refund from TT and use some other software.

[Willzy75]

I can say that with the new crypto reporting requirements, the software is definitely still not fixed. It even seems that the situation is worse than has been reported, the algorithm is actually rounding the COST (or other basis) DOWN and rounding the PROCEEDS UP. Example:

From brokerage:

Actual Cost: $3.34, Actual Proceeds: $2.01, Gain or loss: -$1.14

As reported on my taxes by TT:

Actual Cost: $2, Actual Proceeds: $3, Gain or loss: +$1

When there are a ton of transactions each one is chiseling away at my return. I pay a premium to use this service and I expect it to produce accurate returns and even find value to add to my return, not whittle it down through bad rounding algorithms.

Once again, I'm posting here because this needs to be addressed and use DOLLARS and CENTS to accurately report my numbers.

[BrittanyS]

The rounding algorithms in the software are set for rounding down if the value is $0.49 or below and rounding up for $0.50 or above.  It should not be rounding cost down and proceeds up.  If you are seeing this on your return, we would like to look into it.  We can review what is happening if you provide a "token" for your return.  A token is a number entered into a TurboTax database where a "sanitized" version of your return is put. Sanitized means that all personally identifiable information is removed, so we see your numbers but not your name, Social Security, business name, etc.

To send us a token, please do the following: 

TurboTax Online:  

Click Tax Tools in the menu to the left.

Click Tools, and then.

Click Share my file with Agent.

A pop-up message will appear. Click OK to send the sanitized diagnostic copy to us.

Provide the token number that is generated onto this thread.

TurboTax Desktop:

Select the Online menu if the customer is using Windows. Select “Help” if using a Mac.

Select Send Tax File to Agent.

A pop-up message will appear, and the customer will select, Send. If using Mac, "Send Tax File to TurboTax Agent." 

Note: Desktop will save a file to your computer unless you uncheck the box.

Another message will appear. 

Reply to this thread and provide the token number that is generated.

At the bottom of your reply (with the token), add @bstanley so I will be notified.

@Willzy75 

[ersh]

I'm having a similar issue caused by premature rounding. Premature rounding means that Turbotax is reporting I have $1 of excess 401k contributions when, in fact, I was careful to hit the cap exactly. I just generated a token 1101744. @bstanley @BrittanyS 

[CatinaT1]

You can adjust your contribution manually to round it down, so you do not have the $1 of excess contribution.

This issue does not require a token.

@ersh 

[bob_brown]

@mjrengaw it was not fixed on my version of TT for tax year 2022

[bob_brown]

@marmil yes I agree rounding is ok at the end but when TT rounds each entry for gains and losses it turns into a disaster.  I cannot believe this happening......when you sum numbers you always round at the end or it is complete chaos.  If the difference is only $1-$50 it will probably fly with the IRS.  But some people have 100 entries on their 1099 and it can be the difference of hundreds and maybe thousands which would probably not fly with the IRS.  Seriously people if your delta is anything over $100 which would make a difference of $25+ taxes owed I would delay your tax return and go use an accountant.