Discussion:1099 R Reporting software issues

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Discussion Forum Index --> Business Growth Community --> 1099 R Reporting software issues


Rmcpherson (talk|edits) said:

12 March 2011
1099 R box 1. Amount filled in, box 2a blank. Box 2b Taxable amount X

2009 software does not treat box 1. as taxable income
2010 software does treat box 1. as taxable income when box 2a is blank
In both cases box 7 is marked code 7 for distribution.

Kevinh5 (talk|edits) said:

12 March 2011
That's because the tax professional is supposed to figure out how much is taxable. Tax software is no substitute for a good tax professional.

MilTaxEA (talk|edits) said:

12 March 2011
Rmcpherson, please update your profile. You use the word "certified" twice in reference to being an EA. You may want to review Circular 230...

Kevinh5 (talk|edits) said:

13 March 2011
My document says says "Certificate of Enrollment"...

MilTaxEA (talk|edits) said:

13 March 2011
As does mine. Of course, even though the Treasury Dept doesn't follow their own rules, we aren't allowed to use it ourselves.

But, I suppose our profiles aren't considered "advertising" per se...

MilTaxEA (talk|edits) said:

13 March 2011
Rmcpherson, you should look in Publication 575 for the Simplified Method if it is a pension/annuity. If they are withdrawing money from a Traditional IRA, then you will need to use their basis (taxable contributions) to determine how much is taxable. Most people I deal with who have TIRAs have the full amount taxed.

Rmcpherson (talk|edits) said:

13 March 2011
The issue was with the software usage for those who had not seen the problem before.

Kevinh5 (talk|edits) said:

13 March 2011
you mean 'operator input'

Death&Taxes (talk|edits) said:

14 March 2011
This is another example, however, of the dumbing down of software, and maybe it is a good thing. I would bet that over 85% of the time, the amount is 100% taxable, so the software's default is to prevent preparers from missing this. As Kevin says, it is our job to ask the proper questions on the chance this person fits in the 15%.

I am amazed at the questions asked this year in my software in the education credit, 1099Q area.....the format is check the block and there are not the wordy questions to consumer software, but once again, it asks the questions we should be asking, so that we simply don't pick up a 1098-T and take the credit.

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