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Kiddie Tax & Unemployment Craziness

FTAX
Level 3

I've already seeing many insane looking tax returns for teenagers who somehow received tens of thousands in unemployment and are in the 35% and even 37% tax bracket!!!!!!  One client dropped off her daughter's w-2 for less than $1,500 and a 1099-g for over $20,000 (!!!!!) with a note asking is her daughter even needed to file!!!!! She owes $5,000+!!!!!!!

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I posted this in another thread.  The program is computing the kiddie tax wrong.  After you enter all your information, make sure you open the 8615 Schedule D worksheet.  You don't have to enter anything, just open it.  Upon opening it, the tax computed will change to the correct tax.  

I have two kids so far with just unemployment and small W2 so no need to have the Schedule D worksheet.  But because of a similar issue the program had last year, I recognized the problem.  My point is we shouldn't have to recognize a problem like this.  We all pay big bucks for this program and it should work. Period.

 

 

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8 Replies 8
Accountant-Man
Level 11

Yeah, laws suck.

But the daughter has over $20,000 of unemployment income she probably didn't deserve, so she has lots of money to pay the frigging tax!

Cry me a river. Pay the tax.

** I'm still a champion... of the world! Even without The Lounge.
PATAX
Level 11

Why did she not have the income tax withheld from the unemployment compensation? You are right accountant man.

FTAX
Level 3

Well, for one thing, NJ allows no more than 10% withholdings on unemployment and NONE on the extra $600 from the feds.  So, even when the taxpayer requests withholdings, it is never an adequate amount.  

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dkh
Level 12

This tax season is like a walk thru the Fun House at the local fair......you never know what is waiting around the next corner.

I posted this in another thread.  The program is computing the kiddie tax wrong.  After you enter all your information, make sure you open the 8615 Schedule D worksheet.  You don't have to enter anything, just open it.  Upon opening it, the tax computed will change to the correct tax.  

I have two kids so far with just unemployment and small W2 so no need to have the Schedule D worksheet.  But because of a similar issue the program had last year, I recognized the problem.  My point is we shouldn't have to recognize a problem like this.  We all pay big bucks for this program and it should work. Period.

 

 

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FTAX
Level 3

Yes, thanks for pointing this out.  Unless you "zoom click" to the schedule D, the software does not cap the child's marginal rate to the parents and the program will show 'no errors', even though the calculation is wrong.

SColletti
Level 2

I'm glad I came to the community for help - when is this error going to be corrected by Proseries????

I told my client the kids owed more money than they did because of the error.  If I didn't look at this answer they would have paid way too much.  I'm glad we held back awhile on e-filing or I would have had 3 returns to amend.

What's up Intuit?  These programs aren't cheap.  And thanks to the person that replied!!!  I guess I should contact him instead of customer service next time!!

 

Well, not to bore you with the details, but if last year is any indication, it won't be fixed anytime soon.  I talked to so many customer service reps last year, all of which checked with whoever they check with, and ProSeries continually claimed the program was correct.  I did the tax calculation challenge, and that was met with crickets.  Finally, I got really pissed off and reached out to someone at Intuit.  All of a sudden, they admitted the program had an error.  They took another couple weeks to update the program.

Honestly, I don't have time, nor I imagine anyone reading this does, to spend a good portion of my day typing in all the issues found.  I can tell you know there is an issue on the 1099B worksheet.  I have a case number on that but no response in over a week.  I can tell you there is an issue on the deductible home mortgage worksheet.  They wouldn't even open a case on that, insisting they were right.   I'm beginning to believe they have our money and just...don't...care.