finding the error in my federal tax return

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legio XX
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finding the error in my federal tax return

Post by legio XX » Mon Aug 27, 2018 9:01 am

I do my taxes by hand and until 2017 no problem - the one gaffe I can recall, they sent a larger refund. The feds want an extra couple of hundred for 2017, and they are probably right, but I want to find where I loused up, and they don't tell you that part.

I don't file online, but I have no objection to using an electronic helper so long as I don't have to enter identifiable personal info. I just need the numbers checked so I can see where the error is.

The disagreement is over the amount of tax owed - we agree within a couple of dollars on total income and taxable income - so the error is probably on the worksheet for calculating tax due for those who file sched D and have qualified dividends. Since there is agreement about taxable income, I assume I got the taxable % of SS right ( :annoyed ). Before I start redoing the return can anyone suggest a site where I can just check my figs?

I used the estimator suggested in another thread, and my result was not far off the estimate. Any suggestions as to how to check my numbers before I sharpen the pencils again?

Vic

kaneohe
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Re: finding the error in my federal tax return

Post by kaneohe » Mon Aug 27, 2018 9:15 am

none of the tax calculators require personal info. google for the HR Block tax calculator, Taxcaster, the mortgage calculator 1040 (2017) . Try all 3 to see if they agree.

RudyS
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Re: finding the error in my federal tax return

Post by RudyS » Mon Aug 27, 2018 1:30 pm

That situation might be the same as what I had happen a few years ago. Did you have any capital gains OTHER THAN the qualified dividends or CG distribvutions? There is worksheet that gets filed instead of the usual Schedule D calculation. IRS did not use the worksheet (TurbotaxDID) so they asked me for more money via CP2000. I explained this, and then it was all OK. If that is your situation, here's the response I sent to IRS:

The proposed adjustment in your notice CP2000 for tax year 2011, of August 5, 2013 is in error, and I disagree with it.
You state that the “corrected” tax on line 44 should be $XXXX. This is not correct.
The amount reported on my return, $YYYY is indeed correct. It was calculated using the Qualified Dividends and Capital Gain Tax Worksheet.
My return was prepared using TurboTax and I am enclosing the worksheet showing the correct calculation. I have spoken with TurboTax and they assured me that the calculation as provided on my return is correct since I did have qualifying dividends as well as capital gain distributions.

kaneohe
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Re: finding the error in my federal tax return

Post by kaneohe » Mon Aug 27, 2018 3:12 pm

RudyS wrote:
Mon Aug 27, 2018 1:30 pm
That situation might be the same as what I had happen a few years ago. Did you have any capital gains OTHER THAN the qualified dividends or CG distribvutions? There is worksheet that gets filed instead of the usual Schedule D calculation. ......................................
Rudy.........can you explain what the usual Sch D calculation is? I have always ended up using the QDIV/CG wksht that you mentioned but have no idea what the "usual Sch D calculation is.

RudyS
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Re: finding the error in my federal tax return

Post by RudyS » Mon Aug 27, 2018 3:43 pm

kaneohe wrote:
Mon Aug 27, 2018 3:12 pm
RudyS wrote:
Mon Aug 27, 2018 1:30 pm
That situation might be the same as what I had happen a few years ago. Did you have any capital gains OTHER THAN the qualified dividends or CG distribvutions? There is worksheet that gets filed instead of the usual Schedule D calculation. ......................................
Rudy.........can you explain what the usual Sch D calculation is? I have always ended up using the QDIV/CG wksht that you mentioned but have no idea what the "usual Sch D calculation is.
I use TurboTax. You usually start with entering sales on form 8949. That information flows to Schedule D ("Capital Gains and Losses"). That is what I referred to as the usual schedule D calculation. If you don't have any sales, you (actually TurboTax) get sent to the "Qualified Dividends and Capital Gain Tax Worksheet". If that's your situation, then there was a check box on page 1 of 1040 that shows "schedule D not required." I think TurboxTax just checked it for me. If you actually sold stock that year, none of this is relevant.

kaneohe
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Re: finding the error in my federal tax return

Post by kaneohe » Mon Aug 27, 2018 3:59 pm

RudyS wrote:
Mon Aug 27, 2018 3:43 pm
kaneohe wrote:
Mon Aug 27, 2018 3:12 pm
RudyS wrote:
Mon Aug 27, 2018 1:30 pm
That situation might be the same as what I had happen a few years ago. Did you have any capital gains OTHER THAN the qualified dividends or CG distribvutions? There is worksheet that gets filed instead of the usual Schedule D calculation. ......................................
Rudy.........can you explain what the usual Sch D calculation is? I have always ended up using the QDIV/CG wksht that you mentioned but have no idea what the "usual Sch D calculation is.
I use TurboTax. You usually start with entering sales on form 8949. That information flows to Schedule D ("Capital Gains and Losses"). That is what I referred to as the usual schedule D calculation. If you don't have any sales, you (actually TurboTax) get sent to the "Qualified Dividends and Capital Gain Tax Worksheet". If that's your situation, then there was a check box on page 1 of 1040 that shows "schedule D not required." I think TurboxTax just checked it for me. If you actually sold stock that year, none of this is relevant.
I think both end up using the QDCG wksht so it's still a mystery to me what IRS did.....perhaps they treated the CG distrib. as ordinary income ........which would be a bit weird and hard to understand.......
Last edited by kaneohe on Mon Aug 27, 2018 5:07 pm, edited 1 time in total.

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House Blend
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Re: finding the error in my federal tax return

Post by House Blend » Mon Aug 27, 2018 4:57 pm

kaneohe wrote:
Mon Aug 27, 2018 3:59 pm
I think both end up using the QDCG wksht so it's still a mystery to me what IRS did.....perhaps they treated the CG distrib. were ordinary income ........which would be a bit weird and hard to understand.......
The OP filed a paper return, so the transcriber could have omitted the entry on line 9b (qualified dividends).

The first thing I would do in the OP's situation is to check to see if the IRS's view of the tax bill is consistent with treating all of the dividends as non-qualified.

RudyS
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Re: finding the error in my federal tax return

Post by RudyS » Mon Aug 27, 2018 5:03 pm

kaneohe wrote:
Mon Aug 27, 2018 3:59 pm
RudyS wrote:
Mon Aug 27, 2018 3:43 pm
kaneohe wrote:
Mon Aug 27, 2018 3:12 pm
RudyS wrote:
Mon Aug 27, 2018 1:30 pm
That situation might be the same as what I had happen a few years ago. Did you have any capital gains OTHER THAN the qualified dividends or CG distribvutions? There is worksheet that gets filed instead of the usual Schedule D calculation. ......................................
Rudy.........can you explain what the usual Sch D calculation is? I have always ended up using the QDIV/CG wksht that you mentioned but have no idea what the "usual Sch D calculation is.
I use TurboTax. You usually start with entering sales on form 8949. That information flows to Schedule D ("Capital Gains and Losses"). That is what I referred to as the usual schedule D calculation. If you don't have any sales, you (actually TurboTax) get sent to the "Qualified Dividends and Capital Gain Tax Worksheet". If that's your situation, then there was a check box on page 1 of 1040 that shows "schedule D not required." I think TurboxTax just checked it for me. If you actually sold stock that year, none of this is relevant.
I think both end up using the QDCG wksht so it's still a mystery to me what IRS did.....perhaps they treated the CG distrib. were ordinary income ........which would be a bit weird and hard to understand.......
What is not clear to me from all of the above is whether IRS did or did not use the Qualified Dividends and Capital Gains Worksheet. They did not specify in the CP2000 how they got to their idea of tax due. I calculated the tax by hand using the "normal" schedule D, and came up with THEIR number for tax due. So I figured that they did not use the QDCG tax worksheet. Which is what I told them in my letter, and that solved the issue. Let me repeat, that all of this depends on your not having any sales on 8949 which flows to schedule D.

kaneohe
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Re: finding the error in my federal tax return

Post by kaneohe » Mon Aug 27, 2018 5:11 pm

Rudy.....when you got THEIR number, did you just use the Tax Table or perhaps the Tax Rate Schedule to calculate the tax? If so , that would suggest all income was treated as ordinary income.

RudyS
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Re: finding the error in my federal tax return

Post by RudyS » Mon Aug 27, 2018 5:21 pm

kaneohe wrote:
Mon Aug 27, 2018 5:11 pm
Rudy.....when you got THEIR number, did you just use the Tax Table or perhaps the Tax Rate Schedule to calculate the tax? If so , that would suggest all income was treated as ordinary income.
This was a few years ago. Hard to remember. But, as I think about it, by not using the QDCG worksheet, all income must have been considered ordinary income, which is what you are suggesting. Also, what HouseBlend suggested above.
Last edited by RudyS on Mon Aug 27, 2018 5:22 pm, edited 1 time in total.

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FiveK
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Re: finding the error in my federal tax return

Post by FiveK » Mon Aug 27, 2018 5:22 pm

legio XX wrote:
Mon Aug 27, 2018 9:01 am
I don't file online, but I have no objection to using an electronic helper so long as I don't have to enter identifiable personal info. I just need the numbers checked so I can see where the error is.
If you don't mind spreadsheets, see either of

https://sites.google.com/site/excel1040/ (Prettier formatting)
or
https://drive.google.com/file/d/1Kxk0_A ... sp=sharing (lets you see the formulas).

On another topic, there are both Schedule D and Qualified Dividends and Capital Gain Tax Worksheets.

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legio XX
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Re: finding the error in my federal tax return

Post by legio XX » Mon Aug 27, 2018 5:50 pm

Folks,

Thanks. Just to let you know that I am following up on some of the suggestions. I had a lot more capital gains this year - consider it a kind of rebalancing - and expected a bit of a hit. But, I am pretty far down the income scale so it was more than I expected. The increased SS liability was part of it. But, I thought I had it right- making a calc, checking it thrice - and was surprised that the Feds came back to me.

I was hoping to avoid wasting a day or more getting reacquainted with the forms and essentially doing it all over, but I may have to. If anything can save me from that, I O ya.

Vic

kaneohe
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Re: finding the error in my federal tax return

Post by kaneohe » Tue Aug 28, 2018 7:51 am

legio XX wrote:
Mon Aug 27, 2018 5:50 pm
..............................................................................

I was hoping to avoid wasting a day or more getting reacquainted with the forms and essentially doing it all over, but I may have to. If anything can save me from that, I O ya.

Vic
Before you do the forms reacquaintance thing, seems like you'd like to know which was the right answer. You mentioned that you and IRS agreed within a few bucks on total income and taxable income. The tax calculators should give you the tax answer within a few minutes..........then you can determine if you have to do any forms reacquaintance or just tell IRS they are wrong.

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legio XX
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Re: finding the error in my federal tax return

Post by legio XX » Sun Sep 09, 2018 6:13 pm

FiveK wrote:
Mon Aug 27, 2018 5:22 pm
If you don't mind spreadsheets, see either of
https://sites.google.com/site/excel1040/ (Prettier formatting) . . .
This looks good, but it won't let me actually enter any information, not even the basic stuff like line 7. I get messages that the cell is protected, etc.
And I can't unprotect the file without a password. ?? Am I missing something? Haven't used Excel for an age, and someone else set it up for me for simple sales/costs tracking.

BTW, I redid the return manually, and if there's a mistake I can't find it. Sent a nice letter with a bunch of copies, including the QDCG Worksheet. We'll see.

Thanks for the suggestions,

cas
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Re: finding the error in my federal tax return

Post by cas » Sun Sep 09, 2018 6:34 pm

legio XX wrote:
Mon Aug 27, 2018 9:01 am
I do my taxes by hand and until 2017 no problem ... <skip>

The disagreement is over the amount of tax owed - we agree within a couple of dollars on total income and taxable income - so the error is probably on the worksheet for calculating tax due for those who file sched D and have qualified dividends.

I used the estimator suggested in another thread, and my result was not far off the estimate. Any suggestions as to how to check my numbers before I sharpen the pencils again?

<later post>
BTW, I redid the return manually, and if there's a mistake I can't find it.
Did you check whether it is something like AMT (Alternative Minimum Tax) or NIIT (Net Investment Income Tax) that you've never owed before and therefore didn't think to do the worksheets/schedules? Those taxes are added on *after* the regular tax is calculated, so could explain why you and the IRS agree on taxable income, but disagree on total tax. Or a disagreement between you and the IRS on a credit that comes late in the 1040, like the foreign tax credit?

A decent 2017 tax estimator should pick up that kind of thing, though.

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FiveK
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Re: finding the error in my federal tax return

Post by FiveK » Sun Sep 09, 2018 7:34 pm

legio XX wrote:
Sun Sep 09, 2018 6:13 pm
FiveK wrote:
Mon Aug 27, 2018 5:22 pm
If you don't mind spreadsheets, see either of
https://sites.google.com/site/excel1040/ (Prettier formatting) . . .
This looks good, but it won't let me actually enter any information, not even the basic stuff like line 7. I get messages that the cell is protected, etc.
And I can't unprotect the file without a password. ?? Am I missing something? Haven't used Excel for an age, and someone else set it up for me for simple sales/costs tracking.
That's why I prefer the
"...or https://drive.google.com/file/d/1Kxk0_A ... sp=sharing (lets you see the formulas)" spreadsheet. But everyone has different tastes.

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legio XX
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Re: finding the error in my federal tax return

Post by legio XX » Mon Sep 10, 2018 8:10 am

FiveK wrote:
Sun Sep 09, 2018 7:34 pm
legio XX wrote:
Sun Sep 09, 2018 6:13 pm
FiveK wrote:
Mon Aug 27, 2018 5:22 pm
If you don't mind spreadsheets, see either of
https://sites.google.com/site/excel1040/ (Prettier formatting) . . .
This looks good, but it won't let me actually enter any information, not even the basic stuff like line 7. I get messages that the cell is protected, etc.
And I can't unprotect the file without a password. ?? Am I missing something? Haven't used Excel for an age, and someone else set it up for me for simple sales/costs tracking.
That's why I prefer the
"...or https://drive.google.com/file/d/1Kxk0_A ... sp=sharing (lets you see the formulas)" spreadsheet. But everyone has different tastes.
Thanks again. I did look at that one and after I enabled editing I could enter info, but Excel then said there were major incompatibilities - I think I have Excel '16; it came with the computer - and when I then tried to save as an older format the same messages came up - so I just went back to paper. Besides, this one is much more complex than the version that looks like a tax form. I could spend much of a day just entering info that I would have to look for first. I'm afraid that the compatibility problem might come up again even if I could figure out how to enter the data in the simpler version.
So, this looks like a great tool, but for whatever reason I can't make use of it.

Btw, the small discrepancy in taxable income is due to a keying error on their part, not a disagreement over calculation or a math error on my part, so just sent a polite note asking for a line by line breakdown. We'll see.

Hey, is there a reasonably simple way to work around that incompatibility problem?

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FiveK
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Re: finding the error in my federal tax return

Post by FiveK » Mon Sep 10, 2018 11:49 am

legio XX wrote:
Mon Sep 10, 2018 8:10 am
FiveK wrote:
Sun Sep 09, 2018 7:34 pm
legio XX wrote:
Sun Sep 09, 2018 6:13 pm
FiveK wrote:
Mon Aug 27, 2018 5:22 pm
If you don't mind spreadsheets, see either of
https://sites.google.com/site/excel1040/ (Prettier formatting) . . .
This looks good, but it won't let me actually enter any information, not even the basic stuff like line 7. I get messages that the cell is protected, etc.
And I can't unprotect the file without a password. ?? Am I missing something? Haven't used Excel for an age, and someone else set it up for me for simple sales/costs tracking.
That's why I prefer the
"...or https://drive.google.com/file/d/1Kxk0_A ... sp=sharing (lets you see the formulas)" spreadsheet. But everyone has different tastes.
Thanks again. I did look at that one and after I enabled editing I could enter info, but Excel then said there were major incompatibilities - I think I have Excel '16; it came with the computer - and when I then tried to save as an older format the same messages came up - so I just went back to paper. Besides, this one is much more complex than the version that looks like a tax form. I could spend much of a day just entering info that I would have to look for first. I'm afraid that the compatibility problem might come up again even if I could figure out how to enter the data in the simpler version.
So, this looks like a great tool, but for whatever reason I can't make use of it.

Btw, the small discrepancy in taxable income is due to a keying error on their part, not a disagreement over calculation or a math error on my part, so just sent a polite note asking for a line by line breakdown. We'll see.

Hey, is there a reasonably simple way to work around that incompatibility problem?
If you are talking about the following message, it's actually not a problem but rather an overzealous Microsoft error checker:
Image

See The warning is incorrect, there is no loss of functionality.

The link to that spreadsheet was to the 2017 version, as that is what applies to this thread. For the most recent version, see this thread.

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legio XX
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Re: finding the error in my federal tax return

Post by legio XX » Mon Sep 10, 2018 6:21 pm

Yep, that's the message. Thanks, will go back and try again. While I wait for the IRS to tell me all the paper I just sent them should have been submitted to my non-existent online acc't . . . .

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legio XX
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Re: finding the error in my federal tax return

Post by legio XX » Fri Dec 07, 2018 1:50 pm

Whew! Got another form letter from the IRS. Short version: amount due $0.00. Nice to know I can still add.
Total cost: about an hour of phone/wait time plus two certified/return receipt mailings.
No idea what caused the problem . . . they didn't tell me that part.
Thanks for the links.

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celia
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Re: finding the error in my federal tax return

Post by celia » Fri Dec 07, 2018 1:59 pm

legio XX wrote:
Fri Dec 07, 2018 1:50 pm
Whew! Got another form letter from the IRS. Short version: amount due $0.00. Nice to know I can still add.
Total cost: about an hour of phone/wait time plus two certified/return receipt mailings.
No idea what caused the problem . . . they didn't tell me that part.
Thanks for the links.
Hurray for legio XX !

You'll never know and it probably doesn't matter. But my bet is that someone else's income was added to yours by mistake. (One digit wrong in the SSN will do it.) Your phone call likely had them checking their work and they found THEIR error.

MarkNYC
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Re: finding the error in my federal tax return

Post by MarkNYC » Fri Dec 07, 2018 2:48 pm

celia wrote:
Fri Dec 07, 2018 1:59 pm
legio XX wrote:
Fri Dec 07, 2018 1:50 pm
Whew! Got another form letter from the IRS. Short version: amount due $0.00. Nice to know I can still add.
Total cost: about an hour of phone/wait time plus two certified/return receipt mailings.
No idea what caused the problem . . . they didn't tell me that part.
Thanks for the links.
Hurray for legio XX !

You'll never know and it probably doesn't matter. But my bet is that someone else's income was added to yours by mistake. (One digit wrong in the SSN will do it.).
Celia -- I don't think that's a good bet, since the taxpayer and IRS "agree within a couple of dollars on total income and taxable income."

Much more likely the IRS did not properly take into account qualified dividends and/or long-term gains when calculating the tax.

You're right that it probably doesn't matter, and when the IRS corrects an error on their part, they generally will not explain what caused their error.

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