TaxAct problems? Anyone have success with a return which includes "backdoor" Roth reporting?

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panhead
Posts: 340
Joined: Fri Feb 22, 2013 10:53 am

Re: TaxAct problems? Anyone have success with a return which includes "backdoor" Roth reporting?

Post by panhead » Thu Feb 07, 2019 1:41 pm

Are any of you using the downloadable version, or is everyone using the online one?

bling
Posts: 360
Joined: Sat Jan 21, 2012 12:49 pm

Re: TaxAct problems? Anyone have success with a return which includes "backdoor" Roth reporting?

Post by bling » Fri Feb 08, 2019 8:46 pm

i'm a past user of taxact, and they sent me a targeted promo for $5 federal, $5 state, so i signed up.

this is definitely not fixed across the board yet.

gophermobile
Posts: 25
Joined: Tue Jan 27, 2015 7:10 pm

Re: TaxAct problems? Anyone have success with a return which includes "backdoor" Roth reporting?

Post by gophermobile » Sat Feb 09, 2019 2:23 am

Hah...I should have known to check here when I started filling out my return on TaxAct. Had the same problem and was driving me crazy too. I narrowed it down specifically to the "IRA / SEP / SIMPLE" box on the 1099R - and only on my return, not my wife's. I called up TaxAct (around 2/4/19) and walked the support staff through it and they had the same problem. They eventually said they would open a support case for it - and by 2/6/19 the form was saving correctly with that box checked and not counting that ROTH conversion as a taxable distribution.

I've also been thinking about ditching TaxAct...I find it's gotten more confusing with the help it tries to provide. It's mostly inertia that keeps me - seeing past returns right next to my current one helps me remember what needs to get filled out and where there might be errors.

Small Savanna
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Joined: Sat Feb 09, 2019 2:27 am

Re: TaxAct problems? Anyone have success with a return which includes "backdoor" Roth reporting?

Post by Small Savanna » Sat Feb 09, 2019 2:38 am

I had the same problem - entering a non-deductible IRA contribution crashes the program. I've never loved TaxAct, but stayed with it for the last few years due to inertia. This was frustrating enough to make me relook at all of the on-line options and in the end I switched to FreeTaxUSA. I spent about 2 hours reentering all my data, but I actually find it more intuitive than TaxAct. the federal return is free and state is $12.50. Leaving is the best revenge...

gophermobile
Posts: 25
Joined: Tue Jan 27, 2015 7:10 pm

Re: TaxAct problems? Anyone have success with a return which includes "backdoor" Roth reporting?

Post by gophermobile » Sun Feb 10, 2019 11:37 pm

Not to sound like an advertisement, but I also checked out FreeTaxUSA after hearing a few other mention. It has an option to import a PDF of last year's return from TaxAct so I did that. Took about 40 minutes to do the rest of it afterwards. TheFinanceBuff also listed how to do the backdoor Roth as well https://thefinancebuff.com/how-to-backd ... axusa.html

I'll echo what others mentioned that I found the interface less confusing than what TaxAct has turned into over the past few years. So that plus being cheaper seems like a win.
Last edited by gophermobile on Mon Feb 11, 2019 11:16 pm, edited 1 time in total.

letsgobobby
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Re: TaxAct problems? Anyone have success with a return which includes "backdoor" Roth reporting?

Post by letsgobobby » Mon Feb 11, 2019 2:51 am

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Last edited by letsgobobby on Thu Apr 18, 2019 1:53 am, edited 1 time in total.

DarkHelmetII
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Joined: Mon Jul 24, 2017 12:25 pm

Re: TaxAct problems? Anyone have success with a return which includes "backdoor" Roth reporting?

Post by DarkHelmetII » Mon Feb 11, 2019 5:23 am

gophermobile wrote:
Sun Feb 10, 2019 11:37 pm
Not to sound like an advertisement, but I also checked out FreeTaxUSA after hearing a few other mention.
Does FreeTaxUSA support rental property?

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neurosphere
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Re: TaxAct problems? Anyone have success with a return which includes "backdoor" Roth reporting?

Post by neurosphere » Mon Feb 11, 2019 7:51 am

letsgobobby wrote:
Mon Feb 11, 2019 2:51 am
neurosphere wrote:
Wed Feb 06, 2019 3:16 pm
karwosts wrote:
Wed Feb 06, 2019 10:18 am
...nor are there any values filled out on lines 6-12 on 8606, just $5500 on lines 1, 3, 5, 13, 16.
The method used by TaxAct and probably most software skips 6-12, which is a valid method, but does seem "weird" or "wrong" if one just reads the instructions printed on the form itself (but ignore the printed instructions to "see instructions" for the 8606 and the publications which reference/refer to 8606 such as Pub 590-A/B and at least one more). :D

Somewhere there is a recent thread discussing this. But I'm too lazy to search/link right now. :wink:
I'm not sure if this is the same problem or different.

I'm trying to enter IRA basis. When I follow the TA instructions, they say after completing the info from the 1099-R I'll eventually end up at a "1099-R Summary page" and I should click on the "Form 8606 instructions." But from the only summary page I can find (which lists various 1099 Rs), there is no 8606 link. So I can't seem to enter basis.

(This is for an inherited IRA if it matters - I tried unclicking the "inherited" box but then I get the 10% penalty for early withdrawals, and I still didn't find the Form 8606 entry link, so I reclicked it)
Desktop or online version? In the desktop version there is no 8606 link or instructions on the 1099 summary page. I think instead you need to navigate to the 8606 form itself using the forms button. But then the "instructions" are simply a copy of the IRS instructions for the form. In any case, tax act requires you to enter the basis directly on line 2 of the form. I'm not sure if the workflow changes if it's an inherited IRA. I've never had to think about it, but do inherited IRAs have their own 8606?

But wait, I found these instructions (https://www.taxact.com/support/21070/20 ... -form-8606) which say you can get some entries on 8606 by the QA: Federal ---> Retirement Plan Income ---> Nondeductible IRAs (Form 8606).
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes".

letsgobobby
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Re: TaxAct problems? Anyone have success with a return which includes "backdoor" Roth reporting?

Post by letsgobobby » Mon Feb 11, 2019 2:26 pm

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Last edited by letsgobobby on Thu Apr 18, 2019 1:52 am, edited 1 time in total.

gophermobile
Posts: 25
Joined: Tue Jan 27, 2015 7:10 pm

Re: TaxAct problems? Anyone have success with a return which includes "backdoor" Roth reporting?

Post by gophermobile » Mon Feb 11, 2019 3:23 pm

DarkHelmetII wrote:
Mon Feb 11, 2019 5:23 am
gophermobile wrote:
Sun Feb 10, 2019 11:37 pm
Not to sound like an advertisement, but I also checked out FreeTaxUSA after hearing a few other mention.
Does FreeTaxUSA support rental property?
It says it does, though I didn't use that feature in my return.

shorty313
Posts: 121
Joined: Mon May 16, 2016 8:43 am

Re: TaxAct problems? Anyone have success with a return which includes "backdoor" Roth reporting?

Post by shorty313 » Mon Feb 11, 2019 3:36 pm

FreetaxUSA handled my backdoor Roth just fine. I switched tho them this year after I found out the H&R Block makes it super difficult to use more than 4 dependent care providers (would need additional paperwork then have to be mailed in).

My state has their own free webfile so cost of tax prep this year is $0. :happy

I don't have a rental, but it has Schedule E for rental income.

ThriftyInvestor
Posts: 10
Joined: Sun Mar 26, 2017 3:33 am

Re: TaxAct problems? Anyone have success with a return which includes "backdoor" Roth reporting?

Post by ThriftyInvestor » Fri Apr 12, 2019 3:17 am

FreeTaxUSA workaround for inherited IRA minimum required distribution (MRD) with backdoor Roth (2018 tax year returns):

If you have an inherited traditional IRA with NO BASIS and an owned traditional IRA nondeductible contribution converted to a Roth IRA, FreeTaxUSA will not correctly generate form 8606. You can work around this by deliberately omitting the IRA/SEP/SIMPLE "X" in box 7 of your 1099-R, which I discovered by trial and error and an educated guess.

If you don't do this, FreeTaxUSA incorrectly includes your MRD on form 8606, causing an incorrect prorated allocation of taxation between the MRD and Roth conversion. My total taxable distribution forwarded to form 1040 line 4b was correct as was my tax owed, but my form 8606 was incorrect, as data from inherited and owned IRAs should not be included on the same form 8606. MRD from an inherited IRA with NO BASIS gets added directly to form 1040 line 4b without generating a form 8606 of its own, and should not be co-mingled with a form 8606 for an owned traditional IRA to Roth conversion.

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Electron
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Re: TaxAct problems? Anyone have success with a return which includes "backdoor" Roth reporting?

Post by Electron » Fri Sep 06, 2019 9:56 am

Miguelito wrote:
Mon Jan 28, 2019 4:54 pm
Agreed. TA used to be great. It used to allow a full view of the tax forms as they were being filled out.
That's disappointing to hear. I have the downloadable free editions of TaxAct 2014 and TaxAct 2015 on my PC and they were both great products. Those versions even had the capability to automatically fill out portions of IRS Form 2210 Schedule AI.

I recently looked for a downloadable free edition of TaxAct 2018 and none was offered. Does anyone know if the free version is only available as an online product?
Electron

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