TaxACT AutoFilling Nontaxable part of IRA box for sales tax?

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PGR
Posts: 225
Joined: Thu Apr 10, 2008 6:25 pm

TaxACT AutoFilling Nontaxable part of IRA box for sales tax?

Post by PGR » Thu Mar 13, 2014 12:08 am

When completing the section on State Sales Tax using the calculated table amount - TaxACT is 'auto filling' one field called "Nontaxable part of IRA, pension, or annuity (do not include rollovers)" with an amount I cannot figure out (where it's coming from or how it's calculated). Any insight here?

To navigate: When using TaxACT 2012 (or 2013) I select
1) "Federal Q&A" tab
2) "Deductions" tab
3) "Itemized deductions Taxes you paid" <Review>
4) <Continue> (to Itemized Deductions - Optional State Sales Tax)
4) <Yes> to "Optional State Sales Tax"
6) Calculation Method <Table Amount>
5) "Table Amount"

On the 7th line down on the screen:
"Nontaxable part of IRA, pension, or annuity (do not include rollovers)"
The field is editable but automatically filled out by TaxACT. Unless I put a zero in, it always autofills the with a non-zero dollar amount.

I have been looking for a while and I cannot figure out where TaxACT is extracting or adding up this figure from. Any ideas?

For 2013 it appears to be the sum of 2 1099Rs. For 2012 it does not sum up the entered 1099Rs.

I'm looking for a way to 'reverse engineer' this # and validate (or just understand) exactly where it's coming from and how it's calculated.

Thanks

(I can post some exact figures and/or screenshots later if that helps)

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damjam
Posts: 837
Joined: Thu Mar 25, 2010 7:46 am

Re: TaxACT AutoFilling Nontaxable part of IRA box for sales

Post by damjam » Thu Mar 13, 2014 2:35 am

I'm not 100% sure, but it probably depends on the code in box 7 of the 1099Rs and any amount in box 2a, box 5 or box 9b.
I do taxes for AARP Tax-Aide, and the software that we use has a similar line.
"Nontaxable part of IRA, pension, or annuity (do not include rollovers)" - that would usually be any income you could have spent but did not pay tax on.
In other words if you had some stream of non-taxable income (say workman's comp) you would have that income to spend throughout the year, even if you did not have to pay income tax on it. So any guesstimate of your general sales tax paid based on income must take into account all income you had available for the year - including non-taxable income.

So I think the answer to your mystery is what were the transactions those 1099Rs were reporting? Were they Roth distributions? Annuity or pension distributions that had a non-taxable portion?

PGR
Posts: 225
Joined: Thu Apr 10, 2008 6:25 pm

Re: TaxACT AutoFilling Nontaxable part of IRA box for sales

Post by PGR » Thu Mar 13, 2014 8:53 pm

Thanks!

Yes, for our 2013 return: She had a recharacterization of a 2013 Roth contribution as a Traditional (deductible) IRA contribution. She had some sort of 1 time pension distribution that was rolled into her Roth. These 2 amounts (noted in 1099-Rs) added up precisely to the amount TaxACT 2013 auto fills the "Nontaxable part of IRA" field.

But... For TaxACT 2012 it is waaaay off by 1000s and I can't explain it.

For 2012 She had 2 1099-Rs and He had 2 1099-Rs. No permutation of the amounts from these 4 forms adds up to the amount TaxACT 2012 is computing and putting in that box... hmmmm.

PGR
Posts: 225
Joined: Thu Apr 10, 2008 6:25 pm

Re: TaxACT AutoFilling Nontaxable part of IRA box for sales

Post by PGR » Thu Mar 13, 2014 9:42 pm

I think I figured it out!

I had:
2 1099Rs were non taxable
2 1099Rs were taxable (partially)
+ there was a carry forward of that special 2010 Roth conversion w/ half taxed in 2012.

So you add the two taxable 1099Rs together for line 15a
You figure out the taxable portion for 15b
Carry forward half of 2010 Roth conversion
Subtract 15b & 2010 1/2 Roth conversion from 15a and add that difference to the other 2 non-taxable 1099Rs
Voila - that was the amount TaxACT 2012 was computing to add in for calculating sales tax. I wish there was a way to reverse the components out of this calculation in TaxACT - I kinda stumbled across this while playing around with the various amounts and noting a difference that I had seen somewhere earlier... it was kinda like putting together an arithmetic jigsaw puzzle until I found something that fit and then looking at where the #s came from - it made sense.

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