Rounding at the individual transaction level on form 8949 is causing a large discrepancy with what is being reported to the IRS on form 1099-B from my broker. This never was the case in any prior year using TT and is completely new behavior. It is not required by the IRS and is causing my tax liability, as calculated by TT, to be different (higher) than what it should be. Accuracy of my reported investment transactions, and my overall tax liability, is one of the primary reasons that I use TT Premier. When will this be fixed?
This is a serious issue and must be fixed ASAP.
Rounding leads to mismatch for more than hundred dollars in my case.
Turbotax, please fix it!
TurboTax, please fix this ASAP!! There is absolutely no good reason to be rounding cost basis and proceeds for every transaction. I sold hundreds of tax lots in 2020, many of which were just partial shares from dividend reinvestments, and all the transaction-level rounding is creating a $70 discrepancy on Form 8949 vs. what my 1099-B shows. Unacceptable, and frankly unfathomable why you would have made this change. Please change it back.
@DJG You are correct,, TurboTax rounds transactions on form 8949.
Rest assured though, your tax return is backed by a 100% accuracy guarantee.
The rounding is done in accordance with IRS regulations
Here it is from their website (under "Computations": https://www.irs.gov/publications/p17/ch01.html
Computations
The following information may be useful in making the return easier to complete.
Rounding off dollars.
You can round off cents to whole dollars on your return and schedules. If you do round to whole dollars, you must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3.
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.
@ReneeM7122 Wow, this is classic TurboTax. Can you explain then why on this other thread, Employee Tax Expert WendyN2 said a fix was anticipated by March 15? Is she mistaken or are you? It would be nice to have a decisive answer on this. Thx.
My recent findings:
I tried to see how HR Block and CreditKarma work with 1099-B forms and how they deal with this issue.
Both round each line and then calculate total amount. Therefore, It seems similar problem is everywhere and maybe it's even fine but I wouldn't like to deal with IRS and explain the difference in 1099-B and 8949.
Currently I see the only one way here:
Do not import 1099-B forms, choose Enter Manually, Select 4+ transactions. In this case Turbotax proposes to enter total amounts, broker names, EIN, etc. Amounts will be rounded but it's ok here since it's total only. And then Turbotax will ask to attach PDF file with the 1099-B form, which can be attached. And Then it can be e-filed, I hope. But It may not work for everyone. https://www.irs.gov/instructions/i8949
Exception 2.
Instead of reporting each of your transactions on a separate row of Part I or II, you can report them on an attached statement containing all the same information as Parts I and II and in a similar format (that is, description of property, dates of acquisition and disposition, proceeds, basis, adjustment and code(s), and gain or (loss)). Use as many attached statements as you need. Enter the combined totals from all your attached statements on Parts I and II with the appropriate box checked.
For example, report on Part I with box B checked all short-term gains and losses from transactions your broker reported to you on a statement showing basis wasn't reported to the IRS. Enter the name of the broker followed by the words "see attached statement" in column (a). Leave columns (b) and (c) blank. Enter "M" in column (f). If other codes also apply, enter all of them in column (f). Enter the totals that apply in columns (d), (e), (g), and (h). If you have statements from more than one broker, report the totals from each broker on a separate row.
Don't enter "Available upon request" and summary totals in lieu of reporting the details of each transaction on Part I or II or attached statements.
.
Exception 2 is not available for the election to defer eligible gain by investing in a QOF. Taxpayers who elect to defer eligible gain must report the details of each investment in a QOF on Form 8949 in the manner described under How To Report an Election To Defer Tax on Eligible Gain Invested in a QOF, later.
@ReneeM7122 With all due respect, does everyone at TT have some sort of cognizant dissonance? Why do you all seem to want to ignore the specific paragraph in the IRS instructions that you quote that is actually relevant to the problem that we are describing which is this -
"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."
This is what TT is not doing correctly in this specific case and what needs to be fixed. TT is rounding the two numbers, proceeds and cost basis, PRIOR to doing the calculation. What TT should be doing, and per the IRS instructions quoted above, is to include the cents in the two numbers, proceeds and cost basis, when doing the calculation and then round the result. That is what TT did in every year prior to this year. Why is this so hard for the TT folks to understand. Honestly I'm getting tired of trying to explain it!
I absolutely agree. If you look at the turbotax 2019 or 2018, The cents were entered, and rounded after the subtraction. This will give the result that is reported on the 1099-B, otherwise the only other option is to manually adjust the result using the other adjustment code 0to force a correct result. The issue need to be fixed otherwise I'm getting audited.
TurboTax automatically rounds capital gains and losses from 1099-Bs. This is to reduce the chance of audits and miscalculations. The IRS allows rounded numbers. https://www.irs.gov/instructions/i8949
It is rounding before subtracting. Every other year it worked correctly. This year not so much. for example : If I have a sale of 2,345.67 and a cost basis of 1,234.45 = 1,111.22 or rounded 1,111 . TT is taking the numbers as follows 2,346 - 1,234 =1,112. Resulting in a $1 dollar difference - this occurs repeatedly and the final totals are off significantly. So I don't know what to tell you besides fix the program. I grow tired of hearing that the IRS allows the number to be rounded. Allow and requires are two different things, and I prefer my taxes to be correct to the dollar.
@NashayLO Before you take the time to respond you should take the time to read the many threads on this subject to get a background on the discussion. The specific paragraph in the IRS instructions that is relevant to the problem that we are describing is this -
“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."
This is what TT is not doing correctly in this specific case and what needs to be fixed. TT is rounding the two numbers, proceeds and cost basis, on form 8949 PRIOR to doing the calculation. What TT should be doing, and per the IRS instructions quoted above, is to include the cents in the two numbers, proceeds and cost basis on form 8949 when doing the calculation and then round the result. That is what TT did in every year prior to this year.
We appreciate your willingness to help but you need to catch up to the many weeks of discussions that have already transpired to effectively contribute.
Please note: In fact, 8949 instructions are missing the Schedule D instructions under heading "Specific Instructions - Rounding Off to Whole Dollars" that 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)
Thank you for your attention.
Oh lovely, another thread on this where Intuit employees fail to acknowledge the actual issue
I see there is a TurboTax update (of course Intuit stopped posting release notes so we have no idea what changed) - anybody see any differences?
FWIW, I'm not seeing any differences on my 8949 - but who knows, maybe you have to reimport to get it fixed?
If you summarize (recommended),
you only need to supply details of 1099-B covered transactions with adjustments that are not listed on your e-Filed Form 8949. and all non-covered transactions not listed there.
in other words, for active investors, generally this is a list of the Wash Sales.
Note: turboTax may suppress some covered transactions without adjustments. For those, no mailing is required !
--
If you have two pages (for example) of Wash Sales,
use Adobe Reader to print those two pages. That's all you have to mail to the IRS, given that those wash sales are not on your e-Filed form 8949 already.
(you might enter them manually if they are few in number.)
If you were wise enough to avoid wash sales, you won't have to list or mail anything.
Maybe we should all just email Intuit's CEO and call this problem directly to his attention: sasan_goodarzi at intuit.com
Will Turbo Tax also pay for my time just trying to correct the problem that Turbo Tax caused!
Last time I attempted to contact the IRS to correct a tax worksheet calculation I spent weeks just trying to find the right person to talk to then they could not even see my tax return.
Turned out it was their mistake but wasted over 10 hours of my time and a lot of frustration.
I am seeing the same rounding error others have posted. This is causing a significant (to me) error in my transaction reporting. Please fix as soon as possible. I'm now questioning my 20+ years of TT loyalty.
I reached out last night to the office of the President, and they have been extremely responsive. The office of the president phoned me this morning, and I sent them my tax return for their review. A CPA called me this afternoon, and understands the problem. He is going to see what he can find-out over the next two days, but he has seen this in the past with other forms / other years, and TT was able to resolve. I am cautiously optimistic.
Here is the response I received from TT. Based on this information, I'm going to file as is with the rounded numbers reported on form 8949. It won't match my 1099-B exacly, but will be close enough.
Hi Scot,
Thanks for taking the time today - we appreciate your input and I hope this brings some clarity to the issue you described.
Form 8949 Rounding
The 2020 TurboTax software has been modified to conform to the IRS instructions/guidance and industry guidelines. Publication 17, 2020 Tax Guide for Individuals (on P. 13) provides that:
Rounding off dollars. You can round off cents to whole dollars on your return and schedules. If you do round to whole dollars, you must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3.
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.
The TurboTax program, beginning in 2020, now rounds the individual entries for sales price and cost basis and then computes the gain/loss based on these rounded numbers. While we recognize that this may cause differences from the actual totals reported on Form 1099-B. The rounding differences are well within the IRS built-in tolerances for rounding discrepancies.
When entering specific individual amounts from Form 1099-B such as Sales Proceeds and Cost Basis, the second paragraph above does not apply - as the entries are not considered by the IRS to be “two or more amounts to figure the amount to enter on a line”.
As an alternative, TurboTax provides the ability to report Form 1099-B transactions as “summary transactions”. If a detailed Form 8949 is required, then the TurboTax online program also has a new feature that will allow you to upload a pdf copy of Form 1099-B that will be transmitted to the IRS with the tax return (in many cases, this will not be required if you have only A or D transactions with no basis adjustments, which are not required to be reported on Form 8949). TurboTax Desktop does not have the ability to include PDF documents in electronic filing. If you choose to use the summary reporting method on TurboTax Desktop, you may need to mail the detailed information about your sales to the IRS using Form 8453.
Pub 17, 2020 Tax Guide for Individuals, along with the Instructions for Schedule D and Form 8949 are consistent with the above.
I'm waiting on an update - that sounds like a really dumb explanation and it doesn't really make sense why they would potentially risk being off when we are talking about 2 decimal points of precision - which has always been the case
I don't think they factored in people having hundreds of transactions which could cause a bigger delta
That and the inability for TurboTax Desktop (I do *not* want to use their online app) can't submit the PDF of the 1099...yeah, I'll wait for them to fix the bug
FYI, I received precisely the same response/explanation as @Scotca did, and I discussed it with the CPA who wrote it. To be clear, there is no "fix" coming, so don't wait for one. They made the switch to transaction-level rounding intentionally and do not view it as a bug, so they will not be updating their software to "fix" it. The guy I spoke with left open the possibility that they'll revisit the issue for next year based on the feedback they're receiving, but he made even that sound pretty unlikely. He said they made the change to be more consistent with IRS instructions about rounding and to be more in line with the "industry standard" approach.
Although this obviously wasn't the answer we were hoping for, I do feel satisfied that we now have the official, decisive response from Intuit on this question, so we can now all go about finishing our taxes. I am satisfied that any discrepancy between our 1099-B and TT's calculated capital gain will be acceptable to the IRS and will not trigger an audit. So really it's up to each of us whether you want to file with the discrepancy or use the workaround of reporting summary transactions and then mailing your 1099-B to the IRS w/form 8453. Personally, I will be using the workaround because all the rounding results in a capital gain calculation that is significantly higher than my actual capital gain. If the discrepancy were in my favor, I'd probably just go along with it.
I agree - TT is not classifying this as a bug. Based on my interactions, I don't expect any "fix"
There's too many threads on this or like this ...and it seems that people are also getting different answers:
* https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/re-imported-1099-b-creates-capital-gain-loss-adjustments-worksheet-for-each-transaction/01/2083346#M67566
At the bare minimum, there is clearly a bug with the ESPP transactions in TurboTax Windows Desktop - one of the flows is absolutely not working - I think I have the correct numbers and the delta just isn't worth me spending hours trying to get Intuit to confirm a bug - I'll give it another couple of weeks to see if any updates come out and if not, file - my risk of audit should be extremely low (unless of course the IRS is verifying 1099s numbers)
It seems the issue with rounding has been fixed recently. After deleting and importing 1099-B forms again numbers in Totals look fine.
I am done with turbo tax. This rounding of each entry will cause paying taxes on more than i should. I have used TT for years but now I plan to just print the forms I need from IRS and do it myself. It is sad that I can do it myself more accurately!!! Will not purchase TT again!