TurboTax Software Update – Now More Errors

Prior to the TurboTax software update on Thursday, 03/18/21, I was only waiting for programming corrections on one form.  That form was Federal Form 2210, Part IV.  There are already various threads on this board discussing what is wrong with that form.  The errors were first reported on February 26.  TurboTax is aware of the issue although corrections have yet to be made.  The rest of my federal tax return was tied out and ready to go.  Just waiting for Form 2210.

However, when I opened my return after the software update, the first thing I noticed was my refund had jumped from $573 to $1,631.  But $573 is what the correct refund should be.  After investigating I found the following:

One of the tax documents I have to enter is a CSF 1099-R Survivor Annuity.  Line 1 on the form is the “Gross distribution” and has an amount shown on the line.  However, Line 2a, taxable amount, is blank.  Since there are “Total Employee Contributions” on Line 9b, the “Simplified Method” must be used to determine how much of the “gross distribution” is taxable and how much is simply a distribution of the employee’s own contributions and therefore, tax-free.  This calculation had worked flawlessly since this annuity began in 2002.  And it worked this year up until this last software update.  Now TurboTax says that the entire gross distribution on Line 1 is not taxable.  Thus, the higher refund I was seeing.  This is not correct.  I tried deleting the CSF 1099-R and then reentering it but no luck.  Same wrong answer.  No matter what I seem to do, I cannot get TurboTax to calculate and apply the “Simplified Method” to this pension annuity like it used to.

So, after the latest TurboTax software update, I am no longer waiting for one tax form to be corrected.  I am now waiting for two items to be fixed.  I don’t know.  It sure seems like things are going in the wrong direction.  I had everything entered into my tax returned and tied out before the end of January.  First, I had to wait until 2/12 to even try to e-file (IRS issue), then had to wait for Form 2210 to be released (again an IRS issue) and then when TurboTax finally made that form available on 2/25, it had errors in Part IV that still haven’t been fixed.  And now an error with this annuity that used to be OK.  It feels like I’m trying to swim upstream as hard as I can but I’m losing ground. And Niagara Falls, the filing deadline, is directly behind me.

TurboTax needs to get more system resources involved here and quickly.  A company can always get additional quality people if they are willing to pay their asking price.  So maybe hiring additional system people to get over this crisis will cause TurboTax to have a bad year.  Maybe company profits will be down for the year.  Frankly, at this point, I just don’t have a lot of sympathy.  You know who else had a really bad year.   A lot of us taxpayers.

TurboTax knew that tax year 2020 would be an unusual year.  A lot more programming changes would have made than in a typical year.  And a lot of those changes may have to be reversed for 2021.  And yet it seems as if they did not gear up, did not correctly anticipate what would be required.  Time grows short.  TurboTax needs to show us that they are committed to providing their customers with the correct, accurate returns we were promised when we paid for their product.  Or else we are all going to fall off that precipice.