TurboTax 2020 rounded each trade from my 1099-B upload. The cost basis/proceeds do not match my 1099-B by a difference of $18. Is this normal?

[mjrengaw]

@DaveF1006 

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!

[DaveF1006]

@mjrengaw. This rounding issue you bring up is not relevant. You are trying to make a semantical argument that is a non-issue because the difference is not going to be an issue with the IRS.

If it is an issue and there is an IRS examination, Turbo Tax does have a tax accuracy guarantee that if the calculations are incorrect, they will pay all penalties and interest because of the miscalculations. Also, if a client feels uncomfortable with this process, they can request max benefits, which we will represent them in an audit. Either way, we have your back. 

[DJG]

Actually, @DaveF1006 , it is not semantics and it most certainly is relevant--all this unnecessary rounding is going to cost some of us hundreds of dollars in extra tax vs. what what the tax should be if calculated properly (and how it was calculated using TurboTax 2019 and prior).  As for your suggestion that this rounding is an IRS requirement, give me a break -- the IRS has not changed its rounding "requirements" since 2019, has it?  Or are you suggesting that TurboTax software was out of compliance with IRS requirements last year (and all previous years)?  Which is it, Dave?   

You obviously have tons of irate customers here who will never buy your software again unless you guys fix this idiotic transaction-level rounding, or at least gives users the ability to opt out of it.  Smarmy comments about "semantics" aren't going to help you retain customers, Dave.  Do your **bleep** job. 

[mjrengaw]

@DaveF1006  It’s not semantics at all. The IRS instructions are clear and unambiguous:

"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."

...and the rounding at the individual transaction level to the cost basis and proceeds numbers prior to doing the calculation is NEW behavior that just started with TT this year. It was never done this way in the prior twenty plus years I have used TT. NOTHING has changed with the IRS guidelines or instructions. It is now inaccurate and the totals are now off by much more than just a few dollars and do not match the 1099-B data my broker sends to the IRS.

Honestly this should be a simple fix and it is beyond ridiculous that TT seems to be unwilling to fix it. Hopefully everyone that is effected will exercise the TT “accuracy guarantee” and get a refund of the purchase price. With this change TT is no longer accurate.

[mjrengaw]

@DaveF1006 

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 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, and I have been using TT for well over 20 years. Nothing has changed in the IRS recommendations or instruction in this specific case between last year and this year. Why is this so hard for the TT folks to understand. Just stop making excuses and fix it.

[jimbakeron]

Couple of points:

1) other have pointed out that the IRS guidance does not say to round the details.

2) even if the IRS will not have an issue with the rounding of the details, users do.  It will report more capital gains in my case than I really had.  So, maximum refund will NOT be the case.

Called and they said it would be fixed by mid-month.  Will hold them to that.

[sethaadams]

Wouldn't it be nice for the powers that be at Intuit to actually post that they will be fixing this (by mid-month or whenever)?  At this point, they have yet to acknowledge here that this is even an issue or concern.

[DJG]

I just sent Intuit's CEO the following email.  I think everyone should bombard his inbox until we get a satisfactory response:  sasan_goodarzi at intuit.com

Dear Mr. Goodarzi,

I am writing to call your attention to a major problem with this year's edition of TurboTax, which is causing tremendous frustration and anger among many users.  For weeks, we have been receiving unsatisfactory and often contradictory responses from members of your customer service team--both by phone and on the community message boards--and we still do not have a clear answer as to whether the engineering team is working on a fix for this tax season or when it will be ready.  

Briefly, the problem is that on Form 8949, this year's software is for some inexplicable reason rounding the cost basis and proceeds for each transaction BEFORE adding them up, rather than just rounding the final totals as per IRS instructions (and as your software did correctly in all previous years).  This is causing TurboTax to calculate a capital gains figure that does not tie to our 1099-Bs -- for those of us with hundreds or even thousands of 1099-B transactions, TurboTax's number can be off by hundreds of dollars!  This level of imprecision is unacceptable, and frankly it defies logic and common sense.  

For more details, you may wish to refer to some of the many threads about this topic on the community message boards, e.g. this one, this one or this one. 

After so many incorrect, contradictory, and even downright insulting responses from your customer service team, we would appreciate having someone with knowledge and authority get back to us to let us know definitively if TurboTax recognizes the problem, if the software engineers intend to fix the problem for this tax season, and when we can expect that fix.  Without such a fix, TurboTax software is essentially useless to us.  

Thank you for your time.

Sincerely, 

[tshearing]

TurboTax has calculated my capital gains as $80 higher than on my 1099B.  What do you suggest I do?  Obviously I don't want to pay taxes on gains I don't have and I don't want to be flagged for any kind of audit.

[DJG · Accepted solution]

Some good news!  Intuit's CEO actually responded to my email yesterday, within 10 minutes on a Sunday afternoon no less. He apologized and said that someone from the office of the president would reach out to me about this, and also that he had asked the head of Intuit's Consumer Group to have his team look into the rounding issue. He cc'ed the EVP and General Manager of the Consumer Group and also Intuit's Chief Customer Success Officer.

The proof will be in the pudding, of course, but I take this as a good indication that Intuit will finally be giving this issue its due attention and that someone will be getting back to us with.  I will update this thread with any further news.

In the meantime, I think appropriate to call off the dogs.  No need to keep bombarding the CEO's inbox now that we have their attention.   

[gamer_jedi]

Great news!  Hopefully they can fix this soon, since there's only a month before the IRS due date (not really interested in filing an extension and paying estimated taxes due to this issue).  

[DJG]

Here is the final, definitive response from TurboTax:

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. 

FYI, I discussed this with the CPA who wrote it.  In summary, 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.

Of course, this whole thing does beg the Q of why would I ever pay for TT Premier again?  But that's neither here nor there.

[DJG · Accepted solution]

Here is the final, definitive response from TurboTax:

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. 

FYI, I discussed this with the CPA who wrote it.  In summary, 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.

Of course, this whole thing does beg the Q of why would I ever pay for TT Premier again?  But that's neither here nor there...

[gamer_jedi]

Horrible decision there to not err on the side of accuracy, or let the users decide whether or not to round.  The summary method is pretty much the only way to go if you have large number of transactions, and if not having the "attach PDF" feature in the Desktop version means having to paper file, it will mean incredible delays in having returns accepted and receiving refunds because of the huge backlog at the IRS.  Extremely disappointed in their decision here.  

[jimbakeron]

Clearly they still do not get it.  I, and I assume others, use turbotax to make doing my taxes easier.  So, they cause me to have higher capital gains as a result of them rounding the details.  Rather than fix the issue, and having bought the desktop version their answer is: print the return  and mail it???

  So much for caring about the user.  After over 10 years, I will clearly look at the other tax prep programs to see if they do this.   Maybe they do as the claim is turbotax did this to be consistent with "industry standards".

  We will see.  Agree with prior post.  Horrible decision to do this in the first place and terrible response to the issue.