TaxAct: Calculation Accuracy

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chris319
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Joined: Thu Jan 28, 2021 6:04 pm

TaxAct: Calculation Accuracy

Post by chris319 »

I'm having a little trouble with TaxAct.

I downloaded my Gainskeeper records from my brokerage, converted them to a csv file and imported them into TaxAct per instructions. According to TaxAct the import went successfully. The Gainskeeper file totals my ST and LT gains and the arithmetic is correct (I checked it myself). The problem is that the totals that appear in TaxAct's Schedule D do not match the totals for LT and ST gains in Gainskeeper. They're off by only a few dollars, but the question is, why are they off at all? TaxAct should be able to get the correct total of a series of numbers — it's simple arithmetic. It calls into question the accuracy of all of TaxAct's calculations.

The "actionable" aspect of this post is, has anyone else noticed accuracy problems in their tax software? Would I be any better off with another program such as HR Block or TurboTax? Any ideas why the totals might differ between Gainskeeper and TaxAct?

Thank you.
The only person you have to please in life is yourself.
EdNorton
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Re: TaxAct: Calculation Accuracy

Post by EdNorton »

Rounding.
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Topic Author
chris319
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Re: TaxAct: Calculation Accuracy

Post by chris319 »

EdNorton wrote: Wed Jan 12, 2022 9:43 am Rounding.
I considered that and did a few tests with Excel. It seems to me the error is a bit large for it to be attributable to rounding error. I can see rounding the totals to the nearest whole dollar and the totals would then be a lot closer to the unrounded totals.
The only person you have to please in life is yourself.
HootingSloth
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Re: TaxAct: Calculation Accuracy

Post by HootingSloth »

You will find many posts on here about this feature in all different kinds of tax software. E.g.,: My advice is to not worry about it.
Global Market Portfolio + modest tilt towards volatility (80/20->60/40 as approach FI) + modest tilt away from exchange rate risk (80% global+20% U.S. stocks; currency-hedge bonds) + tax optimization
Topic Author
chris319
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Re: TaxAct: Calculation Accuracy

Post by chris319 »

Thanks for posting those links. I will read them all anon.

Last year I had even worse problems. I imported my txns directly from my brokerage and in my haste, filed my return. Then I drilled down and discovered major errors worse than mere rounding error: the import process from my brokerage had not gone smoothly and had actually skipped entire txns. The cure was to not download directly from the brokerage but to download an xls file from Gainskeeper, convert the xls file to csv and import the csv file. This resulted in all of the txns being imported correctly but also necessitated filing a 1040-X amended return. Here is the exact explanation I gave on 1040-X under penalty of perjury:
Error in TaxAct program importing 1099-B data from brokerage.
I had to file an amended state return as well, a total of four filings rather than two (fed and state). Not my idea of fun. By and by the refunds all came in and I am now square with both fed and state. This is why I am being extree vigilant wrt the importation of CG data. The rounding error bugs me and is bad programming as far as I'm concerned but if it's common to all tax programs and the IRS considers it Kosher then I'll live with it.

Still and all I like TaxAct. My goals this year are 1) to file electronically, and 2) no amended returns, given how mired and backlogged the IRS is. Now I'm just waiting for my W2's to come in.
The only person you have to please in life is yourself.
HootingSloth
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Re: TaxAct: Calculation Accuracy

Post by HootingSloth »

chris319 wrote: Wed Jan 12, 2022 10:52 am Thanks for posting those links. I will read them all anon.

Last year I had even worse problems. I imported my txns directly from my brokerage and in my haste, filed my return. Then I drilled down and discovered major errors worse than mere rounding error: the import process from my brokerage had not gone smoothly and had actually skipped entire txns. The cure was to not download directly from the brokerage but to download an xls file from Gainskeeper, convert the xls file to csv and import the csv file. This resulted in all of the txns being imported correctly but also necessitated filing a 1040-X amended return. Here is the exact explanation I gave on 1040-X under penalty of perjury:
Error in TaxAct program importing 1099-B data from brokerage.
I had to file an amended state return as well, a total of four filings rather than two (fed and state). Not my idea of fun. By and by the refunds all came in and I am now square with both fed and state. This is why I am being extree vigilant wrt the importation of CG data. The rounding error bugs me and is bad programming as far as I'm concerned but if it's common to all tax programs and the IRS considers it Kosher then I'll live with it.

Still and all I like TaxAct. My goals this year are 1) to file electronically, and 2) no amended returns, given how mired and backlogged the IRS is. Now I'm just waiting for my W2's to come in.
My guess is that the rounding in these programs is actually done the way the IRS tells them to do it, either directly (because there is some communication between the IRS and the major tax software providers) or indirectly (because they change things over time to minimize automated matching errors between what their software does and what the IRS computers spit out). I think this is why all of the major programs seem to do slightly odd things with rounding.

I also like and use TaxAct, despite a hiccup or two in the past. Good luck with a smooth filing season this year.
Global Market Portfolio + modest tilt towards volatility (80/20->60/40 as approach FI) + modest tilt away from exchange rate risk (80% global+20% U.S. stocks; currency-hedge bonds) + tax optimization
Topic Author
chris319
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Re: TaxAct: Calculation Accuracy

Post by chris319 »

Out of curiosity I got a copy of the H&R Block software (I'm retired so I've got the time).

Compared to TaxAct, the H&R Block user interface and interview process just feel clunkier than TaxAct. TaxAct's ability to do direct entry into tax forms is a boon. If you try to override a calculated field it will gracefully offer to open the supporting form. It also does a good job of importing previous years' data including carryforwards, so I'm sticking with TaxAct.

I'm going to pass on TurboTax. For one thing, I fund Intuit's use of lobbyists to influence the IRS objectionable.
The only person you have to please in life is yourself.
talzara
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Re: TaxAct: Calculation Accuracy

Post by talzara »

chris319 wrote: Wed Jan 12, 2022 12:01 pm Compared to TaxAct, the H&R Block user interface and interview process just feel clunkier than TaxAct. TaxAct's ability to do direct entry into tax forms is a boon. If you try to override a calculated field it will gracefully offer to open the supporting form. It also does a good job of importing previous years' data including carryforwards, so I'm sticking with TaxAct.
H&R Block has direct forms entry as well, but it's not integrated as well as TaxAct. You can stay in the interview or stay in the forms, but it's not as easy to jump between the interview and the forms.

TaxAct was founded by a software developer whose tax program was discontinued after it was acquired by Intuit. He didn't want to work on TurboTax, so he quit and started over. It is better than TurboTax in many ways, but many people are scared of the forms and prefer TurboTax's interview approach.
Topic Author
chris319
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Re: TaxAct: Calculation Accuracy

Post by chris319 »

IRS says "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."
You can override the amount on Schedule D but TaxAct gives the ominous warning that you will not be able to e-file the return. Given how backlogged the IRS is, filing a paper return does not seem like an attractive option.
The only person you have to please in life is yourself.
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