There is an issue when entering 1099-Q information where the program returns and "out of balance" error claiming that boxes 1, 2, and 3 do not add up correctly. However, this is because the system is not allowing users to enter in decimal numbers, only whole numbers.
If I round up, then the total amount add up to $1 more than distribution. Can TurboTax please fix this and allow cents to be added in order to avoid incorrect tax return documents? Unfortunately it appears many other community users have had this same issue and the advice has been to round everything to whole numbers which is not accurate.
Has anyone else found any solutions besides rounding incorrectly?
Same issue nearly a year later. One would think this would be easy enough to fix....
The IRS requires all software programs to round the numbers before sending them to the IRS.
For taxpayer entry, the IRS offers:
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.
This doesn't address the question. The problem is that TurboTax expects the rounded values on Form 1099Q Box 2 and Box 3 to add up to the rounded value in Box 1 - you can potentially be off by a dollar. The question is where to fudge the dollar, recognizing that turbotax will then have a value that doesn't match a value reported to the IRS on the tax form.
By way of example, here's my 1099-Q this year (only using ending digits for privacy):
Box 1 Gross Distribution: $9.61
Box 2 Earnings: $4.34
Box 3 Basis: $5.27
I enter those values. Turbotax then rounds each of them into
Box 1: $10
Box 2: $4
Box 3: $5
and yells at you that it's out of balance as Box 1 should equal the sum of Boxes 2 and 3.
In order to make it balance, one of those boxes needs to get changed to something which will be $1 off from the rounded value reported to the IRS. Which is the least bad option?