Pros/cons of importing vs starting fresh

[maverick]

I've used TurboTax Premium for about 4 year now. Are there pros/cons to importing the previous year's return rather than starting fresh? As far as I can see, the only useful bits of data TT can get from the previous year's return are things like personal info (name, address, dependents, etc.) and the previous year's AGI. The disadvantage is that it also pulls some data like the stuff we imported from financial institutions (1099-INT, 1099-DIV, etc.) but it only imports the line items and not the actual amounts reported in the previous year. This causes the previous year's line items to get a bit mixed up with the current year's line items (after we import the current year's data). So, I feel that, on the whole, it's better to start with a clean slate even if it means you have to type some basic info all over again. Any thoughts/opinions?

[HelenC12 · Accepted solution]

One big advantage to transferring your prior year data versus typing everything from scratch, are your carryover amounts. For example:

• Carryover losses from your investments,
• Carryover charitable contributions,
• Taxation of state income tax refund (if applicable),
• Adoption credit carryover,
• Foreign tax credit,
• Energy Credit.
• If you have a rental or a business, depreciation and/or unallowed losses. 
• It also prompts you for all the information from the prior year so you don't forget to enter something from the current year.  

[maverick]

Agreed. Those are all valid points. Where TT could improve, though, is by highlighting or somehow showing the ones that were carried over from a previous year versus the ones that were imported from the current year. That will allow us to differentiate between them clearly. Today, an line item for, say, TD Ameritrade will look the same for both years.

[mike-mike]

The import is generally has much pros than starting fresh. E.g. it can help you to keep useful information, like IRA contribution tracking, loss carryover, last year Fed payment, state payment information and fill them automatically when needed.

So unless your filing is very simple, say just the W2 and few 1099-INT, importing is preferred.

[VolvoGirl]

If you Transfer from the last year it should also bring over the amounts so you can compare them to this year.  It won't fill them in as this year but on the Summary Pages there is a column for 2020.  Then you can see what you had last year to check if you are missing any items you haven't entered yet.