Working on your own taxes can be frustrating no matter what software program you’re using.
First, full disclosure: I love Turbo Tax. I used to tell people that I’d do TV commercials for it. I even seriously considered going to work for the company. I have worked for one of their competitors – and I still like Turbo Tax better. So when I title this blog post as “Problems With Turbo Tax”, you’re not going to find an exposé of all things bad with the company. This is just a heads up for people using the number one tax software in America.
Problem number 1: “The program won’t let me…” This is the one I hear most often, “The program won’t let me change the number, it won’t let me delete my neighbor’s child.” Turbo Tax is great when you’re in the act of preparing your taxes, but it’s not as easy to go back in and make a change if you’ve done something wrong and need to correct it. For example: one of the things I do is review tax returns that people have prepared for themselves before they send them to the IRS. (I charge a fee for that but it’s much cheaper than paying me to do your taxes for you.) One year, I reviewed a woman’s return and she had put a $4,000 tax credit on her return. That was wrong; the $4,000 belonged someplace else. I explained the problem and where the $4,000 needed to go. Granted, she wasn’t going to get that big refund she was expecting, but her return would have been right. Anyway, a few months later she was in my office again. She had received a notice from the IRS stating that she wasn’t allowed to claim that $4,000 tax credit I had warned her about. I asked her, “Why didn’t you change it like I told you to?” “Because Turbo Tax wouldn’t let me,” she said.
Dealing with that problem: First, you need to know that “Turbo Tax wouldn’t let me,” is not an acceptable excuse in Tax Court. Second, one thing that Turbo Tax does well is that they have real people who can answer your questions. You call the phone number and you get to talk to an Enrolled Agent who understands tax issues and the Turbo Tax software. You can tell her you’ve got a number on line 53 but it really belongs on line 29 but you can’t figure out how to make it work and she’ll guide you through it. You might pay a little more for Turbo Tax to get that service, but it’s there when you need it so don’t be afraid to use it.
Problem 2: Choosing the right product. Turbo Tax has 5 versions of its product, plus its online applications. In the store you can buy:
- Basic – for simple tax returns with no itemized deductions
- Deluxe – for regular 1040 returns with home mortgage interest and charitable deductions
- Premier – which includes everything in Deluxe but also handles investment income and rental property
- Home & Business – which is for sole proprietors
- Business – for persons filing corporations, partnerships and LLCs
I cannot stress this enough, if you need the more expensive package, don’t be cheap – buy it. I’m always amazed when people call me for help because they want to depreciate their income property by hand because Turbo Tax won’t do it for them. Yes it does, if you buy the Premier edition. Of course I will gladly prepare a depreciation schedule for your property (for a fee), but if you don’t use the correct software when preparing your tax return, there could be other problems that you won’t realize like passive income limitations (sounds like I’m speaking Geek doesn’t it? I am.) The right software will keep you out of trouble. And there’s no excuse for buying the wrong one: go to their web site and do their quiz to determine which package is right for you.
Problem 3: Not updating the program before you e-file. This isn’t a Turbo Tax problem so much as it is a user error. You have to install the updates before you file your tax return or it could easily be wrong. Let’s be realistic about this. Turbo Tax tries to get its product to the shelves by December for customers to buy it. This is a pretty good business plan. The problem is; there’s always some last minute change to the tax code. Last year, Congress changed the tax rules on December 17th. They messed things up so badly that the IRS computers weren’t able to accept certain returns on the normal date. Intuit (the Turbo Tax Company) has to get its product out to the stores in time. The only way for them to get the product to the store shelves and have it work correctly is to have people install the updates to the software before they file their returns. If you didn’t install the update, your return could easily have been wrong. Installing updates is a normal part of doing taxes – I update my professional software almost every day. If you don’t have internet access and cannot install the updates, the box might not be your best option.
Now I wrote about these Turbo Tax issues because these are all problems that I have helped people with because they had filed taxes and there was a problem. If you file a bad return and the IRS sends you a letter, I charge a lot to fix it. All of these problems I mention are preventable. You will save yourself lots of money by buying the right program, updating before you file, and making use of the Turbo Tax 1-800 number provided in your box.
Final disclaimer—if you haven’t already purchased your tax software, let me recommend clicking on the “Do Your Own Taxes” page at the top and take a walk through my 1040.com program. It doesn’t have the famous name recognition, but it is a good, solid program. If it wasn’t, it wouldn’t be on my website.
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Do you know why entering state taxes withheld in the W2 Box and 1099 Retirement Boxes impact how much I owe for federal taxes. It doesn’t make sense that my Federal taxes go up if the State took out less money for state taxes?? Just curious if this is a glitch or if this is correct.
According to an article I just read, these forms (for depreciation) aren’t even available yet!
How can I have completed and returned forms that aren’t available?!
This is all very confusing…
Thank you!
I have worked through my 2012 taxes using Home and Business. Granted I have a large business loss and and withdrew money from a 401k, but Turbo Tax won’t change when I make corrections. It’s stuck on one figure for the taxes I owe. I have gone in and changed my income, and adjustments just to see if if will work.. Calculations won’t change like other versions. Is there a minimum amount of taxes the IRS has placed on businesses for 2012 regardless of the loss? Can’t find an answer.
John,
If you have rental real estate then you have depreciation. The IRS is not accepting returns with depreciation yet.
Keith,
You’ll need to talk to Turbo Tax about transferring the states.
Hey Scott,
I have no idea. For what it’s worth, state returns are $29.99 on my website and you get as many steps as your need. (Yeah, I know, blatant plug.)
Hi Rich,
Okay obviously talk to Turbo Tax, but also check how much space you’ve got available on your hard drive.
I’m in the process of doing my brother’s taxes and he worked in another state. I see I can purchase a second state for $39.99, but my question is this: If I purchase a second program (Deluxe, I already have Premier) for $25.90 (Amazon) will I be able to get the second state to show up on the program I actually use? THANKS!
I e-filed on the 29th.
Today is Feb. 6th.
I am still “Pending” and not too thrilled about….
I used the Premiere Edition because I have a rental property.
By my math, 8 days is a pretty long wait… I should be getting my return soon, not waiting for it to be processed…
What can the problem be?
What am I paying an extra 39.99 to file my MI taxes??? I already paid 50 bucks for turbotax deluxe. Thought it included one free state filing??? What is this extra charge for???
I am having a terrible time with the Turbo Tax 2012 Updater. It gets stuck every time tries to update and no one seems to have the answer. What do I do??
Thank you so much !!!
Hello Hien,
You will want to fix your return. You company changed it’s EIN number. The other person had a mistake on her new W2 but the old EIN was the correct one. If you don’t change it, you could get an IRS letter about that. But you’ll want to correct your return anyway. The income numbers on your W2 need to match what you put on your tax return.
It sounds to me like you will be better off when you match your tax return to your W2. Some jobs require that you live on-site and if your company deducted your rent from your taxable income, that tells me you have one of those jobs.
Hi Liz,
Check to see if New Jersey can be e-file without the federal. Some states have to be piggy backed with the federal return. I don’t know if New Jersey is like that or not. If that’s not the issue then that’s a good question for the Turbo Tax help line folks.
Hi Jan,
My tax return got accepted by IRS even I typed the wrong EIN # (actually, that’s the old # they used to have, for some reason the company just got the new number this year). I was a little nervous about that. But I read one of your answer above about the same thing. So, as you said, I just live it alone.
However, there’s still one thing which give me a headache. The amount of Gross Income that I typed in is larger than the one showed on W-2 form. The number showed on W-2 form is the money I made last year after paying the rent for my employer. They deducted in directly from my paycheck. Here comes the mistake. They are 2 different numbers.
Will I get into any trouble with IRS? Will they say that I owe them some money?
Could you please help me with this question?
Thank you so much and I really appreciate your help.
I did my taxes last weekend.. I had to mail my federal return, which I did.. then i e-filed by NY return, but I also have a NJ return. Turbo tax told me I could e-file it on 2/1 because all the forms wouldn’t be available until then. So i’ve gone back a few times now since Friday and I am still unable to submit my NJ taxes via e-file. I checked and made sure all the forms are available, which they are. But when I go into the “file” section, it just brings me to my federal.. which I bypass because I already mailed that, but then brings me back to the original page of the “file” section and doesn’t give me the option to e-fil my NJ return. And yes, that option is checked as how i want to file that state return. Any ideas why I am still unable to e-file?
Hi Ted,
I might have to send you to the TT people. The only thing I can think of is that there are 2 common 1099G forms. One is unemployment–like what your wife has, and the other is for a state income tax refund. There would be no withholding for a state income tax return.
There should be a box somewhere to click to make sure that you’re entering unemployment benefits–as they go on different lines. Unemployment benefits would have spaces for federal and state withholding.
I’m afraid that it’s been a few years since I last used Turbo Tax.
Any Turbo users out there with an answer, please feel free to help Ted out. Thanks.
Hi Jan, Hope you can help before I try to contact Turbo Tax. I’ve used TT Deluxe for years with no problem. This year, my wife again (and rightly so) has a received a 1099-G form (employment benefits) which has state & federal taxes with held in addition to W2 from her current employer. Use the “Guide Me” feature and I’m having an issue entering the 1099G info. Upon entering the 1099-G state paying information and checking the box that taxes were with held, the program asks “Do you want to delete this document”. I’m unable to enter the unemployment amount or taxes paid. Upon checking the “No” box that taxes were with held, the program just goes back to the forms page that shows the 2011 1099-G income and zero for 2012 because it hasn’t allowed me to enter the values.
I’d appreciate any help/comments you can provide.
Ted
Hi Rachael,
You’re right, I don’t normally respond to these, but I used to use Turbo Tax and I’ve had that problem in the past. Do you have enough space on your hard drive? I had that problem before. Check that first. You may need to make some room.
If that’s not it–which operating system are you using? I know my tax software won’t run on Windows 8.
And that’s the extent of my IT solutions. (Pretty limited, sorry.) Anybody else out there have any suggestions?
I can’t get my TT Home and Business to Install this year. I have used it for as long as I can remember since my hubby insists on “self-employment”. . .NEVER have had any issues I could not go back and see where I had made a mistake. This time though it keeps getting to 98% then locking up. When I try to open it it says ,”your configuration has been changed ~ prd.ini,exe please re-install” Then it does the same thing. I went into the Utility file and it says “oops – your install hit a snag. We’ll see if we can fix it, then have you re-install.” Then that also locks up!!! I know this isn’t really the type issues you reply to- this is more of a technical nature. . .but I just wondered if anyone else is having these issues?
Hey Julie,
sorry to hear that. I don’t know if this will help or not. With my professional software, I have to download each state that I use and do an install also. It sounds like a “duh!” Except that I seem to miss the stupid install button and then I log out of the software (you know mess up once, that happens, do it a couple of times….? What can I say, but I’m sometimes technologically challenged.)
Anyway, go to your program search and double check to see if the state actually installed. At least that’s what usually happens to me (but I do use a different software.)
Hi Jim,
I don’t use Turbo Tax, I’ve got professional software. For what it’s worth, I’ve had at least one update a day–sometimes more. With all the crazy tax laws this year, that’s not that unusual. February 2 is not far away.
Don’t buy the TurboTax CD. It won’t let you do the state and keeps wanting you to buy it for 39.99. I just wanted to get it over with so I paid it and it still won’t let me do it. Now I’ve been on hold for over an hour and a half.
I have been having the same problem that #25 Charles had. Unfortunately his fix didn’t work for me. I talked to TT and no one really knew what I was talking about. After a long wait, the tech came back on the line and said to download updates after Feb 2. I can hardly wait. Is there a bug in TT 2012? Does anyone else have this problem? Has Charles’s fix worked for you.
Hi Charles,
Thanks for the tip. Anybody else with a good Turbo Tax tip is welcome to post.
Had trouble with TurboTax 2012. Schedule B continually said I had errors. The errors were with the “Tax-Exempt Worksheet” in Schedule B worksheet. I have no tax exempt dividends, but the program wants me to fill in the Worksheet.
The solution I found to the problem (THE BUG) was when I fill out the 1099-DIV worksheet from my several 1099-DIV forms was to leave any zero’s (0’s) on any line of the 1099 blank. DO NOT PUT IN ZERO’S, EVEN IF THE 1099 HAS A ZERO FOR THAT LINE. That goes for any State ID also if that box in the 1099 is zero.
Just put in the positive numbers for any given line including the state ID number if that is required. Leave everything else blank.
Hope this helps
@ Michael again,
I told you to contact Turbo Tax, but then I got this post from Bill about how much trouble he had so I figured I should try to help you out. The thing is, it could be part of a long laundry list of issues. Here goes:
1. First, make sure you’ve updated your software. Bugs are fixed daily so if there’s a mistake in the program, you have to update to fix it. That’s the first thing you do before anything else.
2. Is your income high? Are you paying AMT? That would be my first guess–with AMT you hit a point where some of your deductions don’t make a difference.
3. Is your income low or do you have a lot of exemptions? Reverse situation. If you’ve zeroed out your taxable income–any further deductions won’t make a difference in your taxes.
4. I don’t think this is you but–are you married with no other deductions? Then the $9500 wouldn’t make a difference–it would switch to standard. (I think this is unlikely but it’s still a possibility.)
5. Are you married filing separately? If yes, if your spouse is claiming a standard deduction–you have to also. You’ll have to check to see if you checked certain boxes.
6. Similar issue–this you accidentally check the “force standard deduction” box?
Those would be the things to look for. If you don’t find your answer there, then I’d still send you back to the Turbo Tax folks because they should help you for free. I charge $50 to take a look at your tax return so free is a better price.
Hi Bill,
So I’ve told about 10 people in the last few posts (some on different pages) to contact Turbo Tax because they’ve got great help. I guess I was wrong.
Now Turbo Tax is right about recommending that you more the cost of any asset that’s under $100 to an expense. And it also makes sense that it automatically deletes when you leave that page. But it is good that you noticed that.
I wouldn’t necessarily call that a bug though–I think it’s just the way it was programmed. One thing–and I’m guessing you’ve done it but want to make sure–do hit the “update software” botton before you file anything. There are new changes daily so it could be that they’re working on that issue right now.
Sorry you had a bad experience with their customer support. (Actually, I’m lying–those of us who do this for a living love when you all have trouble with TT. It’s good for our businesses.) But seriously, if you still need help, do call them back. I’m thinking that a different representative might be more helpful to you.
Hi Bob,
You probably didn’t add the Schedule C–it probably pulled forward when you updated your return from last year. Just delete the form if you don’t need it anymore. If you’re still having trouble with it, call your Turbo Tax expert–they get paid to help you walk through these things.
Hi Michael,
I have a couple of guesses as to what’s wrong. But I can’t see your tax return. You’re using Turbo Tax–call them. That’s what you paid for.
I’ve also used TurboTax in the past but this year there seems to be many bugs in the program. While entering a business asset under $100 TurboTax will suggest that it should be expensed. If you check the box to agree to that the entry is lost. Now sure, I can go into the expense section and re-enter them but had I not noticed this I would lost a lot of deductions.
My first chat help attempt with them took over 30 minutes and did nothing. Mostly it consisted of me typing “Hello, are you there?” repeatedly. I just called them and tried again. I got a woman who kept typing a lot and kept saying that she didn’t see anything in the help documents about this. Then she said her supervisor said I should make an on-line account and enter my information there so they could see what I was talking about. When I started to say that seemed to be unnecessary considering I had given them enough information to troubleshoot the problem then the already bad connection completely went silent and I had to hang up. So you’ve had been luck getting help then I have had this weekend.
TT Deluxe ’12 keeps requesting that I fill in the blanks on Sch. C. While I’ve used Sch. C in the past (I’ve done some independent consulting/teaching), I don’t need it this year. But I can’t get it to go away. I’ve tried backtracking through all the steps, and can’t find out where it was added.
In working with TT this year, the Property Tax deduction is not making a difference on my tax liability. If I put in $0 or th eactual $9500, there is no difference to what I owe. Property Tax doesn’t phase out does it?
Hi Ann–
There are a lot of possibilities here as to why your NOL isn’t showing up. I could play guessing games all day. So I’m going to bail on you and have you call the Turbo Tax phone line because they can upload your tax return and take a look. That’s much easier than me trying to guess where the issue is.
One thing that I often find when people are trying to claim an NOL is the difference between logic and IRS rules. So–you might logically think you have an NOL but according to IRS rules you don’t. You may find your answer in IRS publication 536: http://www.irs.gov/pub/irs-pdf/p536.pdf
But it’s probably a lot easier to talk to the Turbo Tax rep. Good luck.
I’ve used Turbo Tax for years and thought it was great until I had a loss on my rental properties. Turbo Tax doesn’t appear to have the proper forms to file to carryback the losses and I suspect people who use this programs will end up losing their NOLs. I’m using the program for rental properties. Am I missing something?
Hi Johanna,
You sound like a good home office claim to me. (You’re using Turbo Tax, not my Roberg Tax Solutions 1040.com website?)
Walk away from it for awhile and look again later. Go over the questionaire part–maybe you answered something incorrectly. I think a home office is a legitimate expense for you but if you said “no” instead of “yes” somewhere it may kick you out.
Other possibilities: I would think a psychotherapist would have enough income to support the home office deduction but if you income was really low it limits you home office deduction.
Another possible issue: I’m guessing you’re self employed–but if you’re a wage earner some of the other items involved with claiming a home office might make the deduction irrelevant.
It’s hard to tell without looking but those are some possibilities. Remember–with Turbo Tax you can call up one of their specialists and they can talk you through it. If you really can’t claim your home office this year, they should be able to look and tell you why.
Or file an extension and call me next Wednesday 🙂
Good Evening! I have used Turbo Tax 2 other times in the last 3 years and have always claimed a home office. I am a psychotherapist and see my clients in my small office/room and do all my phone calls, paperwork, scheduling and billing in my home office. I just finished listing my business expenses in the Home and Business Edition of Turbo Tax on line and the message is: You are not allowed to list [claim] as home office this year. You may be able to do so next year. When I read the tax code, I definitely meet the requirements of home office (actually exceed
them). At this point I hate to file for an extension and have a tax preparer complete them sometime later in this year. Please help.
Hi John,
you need to file a return–you’ll be owing tax.
I get social security and it is 24500. a year.
I get payments from my 401 k they mount up to 19377.00 a year
do i pay tax on the social security. i read a couple could make up to 32,000 before
you pay any tax. do my wife and i owe any tax?
Hey Kathy,
You got me. My first thought is, “there is no line 52 on Schedule C” –you’ve got to be on the disposition of assets form. But without looking at it, I’m at a loss. BUT!!!!—the cool thing is you’ve got the TT box! Call their number and have one of their people talk you through it. You paid for the service. Good luck. Sorry I couldn’t be more helpful.
TT says error Schedule C line 52 Disposition of Vehicle – figure too large, cannot exceed business basis – see tax help. TT made up the worksheet and I can’t change that figure and even if I could – would not know what figure to put in. Where is this “Tax Help” that TT if referring me too? “Others” say to delete form and then do it again – but I still would not know what figure I was to put in – that’s something the TT figures (I thought). Been using TT for many years now but think this may be a TT glitch because it’s THEIR complied worksheet. Any help would be appreciated.
Thanks,
Kathy
Oh Dara–
I almost forgot. Please come back here next year and file with me. Sorry, got to get the blatant plug in.
Hi Dara,
Couple of potential issues–not Turbo Tax problems, just general issues.
1. No making work pay tax credit–could reduce your refund by 400 or 800 dollars depending upon if you’re married or not. Lot’s of people are going to see that.
2. If that’s not the issue- Some credits get eliminated with a higher income–like the college credits. You said your income didn’t go up though so that’s probably not it.
3. If you’re having trouble with EIC–be sure to completely answer all the questions in the little questionaires. There are some new rules and the software companies have to comply along with the professionals. If you normally receive EIC–walk through all those questions and answer them all. (Pain in the behind–us pros have to do it too.)
Good luck.
Thanks Tom,
It’s good to get real feedback from actual users. Although I still say you should buy the right package for the job you’re doing. I really have produced depreciation calculations for persons who said it wasn’t available in their Turbo Tax package. To be honest, I made the assumption that they had just purchased the wrong package, perhaps it was just user error. Thanks for setting me straight.
Just happened to stumble in here. I think you’re wrong in your statement
“I’m always amazed when people call me for help because they want to depreciate their income property by hand because Turbo Tax won’t do it for them. Yes it does, if you buy the Premier edition.”
According to TurboTax’s website all the available “paid” versions of TurboTax support the exact same forms, including Schedule E, where depreciation on a rental would be recorded. I have no working knowledge of Basic but I’ve used Deluxe for many years and it certainly WILL calculate depreciation on an investment property.
I don’t think I’ll be using Turbo Tax again. they wont give me my credits and they don’t respond back. Last year I made the same amount of money and got over 4G’s back this year they say I’m getting less. Makes no sense to me.
Hi Brenda,
Since the IRS didn’t reject her return for the wrong EIN number, I wouldn’t worry about it. As long as all the other numbers are right, just leave it alone. But–and this is important. Make sure that she hangs onto that W2 and a copy of her tax return in a safe place. It’s possible that she could get an IRS letter about a year from now asking why she didn’t report that income. (The numbers go through some computer program and get spit out and a human might never see it.)
If she does get a letter like that, then Oops! She used the wrong EIN number–she didn’t realize it changed. There’d be no change in tax or anything, it’s just that she’ll want to have her back up to prove what happened. She may never get a letter if a human looks at it–it would be obvious, just a wrong EIN number. But because the IRS does so much by machine, she may just have to prove what she did later.
My little sister has an issue…she wanted to complete her taxes and get money by the end of the month and decided to use her last paystub to do her taxes herself on Turbo Tax….(against my advice) using her 2010 W2 she gathered all her Employer Identification number and her other items needed….she rushed cause she thought she was going to get her w2 till the end of the month. But behold her W2 came today…Now for some reason her employer identification number is different than last year although it is still the same company. The numbers are all correct her income, federal taxes withheld and all Except for the Employer Identification number and Employer’s State ID number….but her federal taxes were accepted by the IRS this morning….does she have to file an amendment or does she live it alone since they were already accepted?
Hi Victor,
As a sole proprietor you’ll put that information on a schedule C. If you’re talking about Turbo Tax, you’ll want the Home and Business edition. If you’re going into 1040.com you’ll be using the deluxe edition. It should take you between 8 and 14 days to get your refund if you’ve got one coming. Don’t forget to file a state return as well.
I’ve got a lot of posts about small business taxes. You might want to check out this one: http://robergtaxsolutions.com/2010/11/small-business-basics/
Also, be sure to claim all of the deductions your entitled too. You might want to check out my tips to reduce your self employment taxes: http://robergtaxsolutions.com/2011/08/five-things-you-can-do-to-reduce-your-self-employment-taxes/
Good luck!
I am a sole proprietor. Can I file easily and how long would it take to get my return?