Below, you'll find answers to frequently asked questions about Form 1040 returns.
Table of contents:
Why isn't my 1099-R flowing to line 4a?
If the distribution code is "P" or "R", then the distribution needs to be reported as income on last year's return instead. If your client already filed, you'll need to amend their return to include the income.
To amend the return in the prior-year program:
- Open clients 2021 return.
- Go to Input Return ⮕ Miscellaneous Forms. ⮕ Amended Return (1040-X)
- Select General Information and Federal.
- Check the box Amending Federal return.
- Go to Income ⮕ Pensions, IRAs (1099-R) & click Details for the 1099-R.
- Select the Other Information tab.
- Mark the checkbox labeled 20XX Form 1099-R with distribution code 'P' or 'R'.
How do I enter total pensions and annuities for line 5a?
If the pension or annuity is fully taxable, line 5a will be left blank and the taxable amount will print on line 5b. If the pension or annuity is partially taxable, but the 1099-R doesn't show the taxable amount, follow the instructions in this article for using the General rule or Simplified Method to have the software calculate the portion that's taxable.
When can I report a capital gain without including a Schedule D?
Per the IRS instructions for Form 1040:
"You don’t have to file Form 8949 or Schedule D if you aren’t deferring any capital gain by investing in a qualified opportunity zone fund and both of the following apply:
- You have no capital losses, and your only capital gains are capital gain distributions from Form(s) 1099-DIV, box 2a (or substitute statements); and
- None of the Form(s) 1099-DIV (or substitute statements) have an amount in box 2b (unrecaptured section 1250 gain), box 2c (section 1202 gain), or box 2d (collectibles (28%) gain)."
When your return meets those conditions, the software will check the box on line 7 automatically.
How is line 13 calculated?
The software uses Form 8995 or 8995-A to calculate the QBI deduction. The worksheet that generates with line 13 shows how the deduction for one half of self-employment tax is allocated to arrive at the Qualified Business Income for each given activity.
For more information, refer to this article.
Where do I enter estimates paid or a 2021 refund applied?
- Go to Input Return ⮕ Payments, Penalties, Extensions ⮕ 2022 Estimated Payments.
- Enter the Overpayment applied from 2021 field.
- Enter the Amount paid fields to get estimates to flow to the return.
- If you have amounts entered in the Voucher amount (memo) fields that pro forma'd from last year's return, and the client has paid them, enter a 1 in the 1=treat all "Voucher amount (memo)" entries as "Amount paid" entries instead.