Tax Reform Update: Generally, only real property qualifies for like-kind exchange treatment under current tax law. See the IRS instructions for exceptions. Certain exchanges of property are not taxable. This means any gain from the exchange is not recognized, and any loss cannot be deducted. For information on like-kind exchanges, see IRS Publication 544. Additional […]
TaxAct® provides depreciation reports for federal and state returns. The report includes the current year and next year details. A disposal summary is also available. To review or print the Depreciation Summary in the TaxAct program, follow the steps below. Online From within your TaxAct return, click Review. On smaller devices, click the top-left corner […]
You will receive Form 1099-DA when you sell, exchange, or otherwise dispose of a digital asset. There are several options that you can use to enter transactions and information from Form 1099-DA. Once entered, the TaxAct program will complete Form 8949, Schedule D Capital Gains and Losses, and Form 1040, as applicable. Manually Enter Form […]
The IRS updates the mileage rates each year. See the Mileage – Standard Mileage Rates for updated information. If your mileage is related to your self-employed business income on Schedule C, you will enter it when entering other expenses on Schedule C (Form 1040). See the Schedule C – Entering Sole Proprietorship in Program FAQ […]
If you provide care to an individual who has a physical, mental, or emotional handicap, the difficulty of care payments you receive are generally excluded from income. Review the information below to determine how to report these payments, if necessary, on your tax return. See the IRS Certain Medicaid Waiver Payments May Be Excludable From […]
When you enter information from a Form 1099-MISC or a Form 1099-NEC you may accidentally create a second Schedule C (Form 1040). If you manually create a Schedule C in addition to the one created while entering Form 1099-NEC or 1099-MISC, you may have two Schedules C that need to be consolidated. Use the FAQ […]
Generally, you do not report contributions to your 403(b) account (except Roth contributions) on your tax return. Your employer will report contributions on your Form W-2. Elective deferrals are reported in Box 12 and the Retirement plan box will be checked in Box 13. If you are a self-employed minister or chaplain, see below. See […]
Jury duty pay is generally taxable and must be reported on your return. If you were required to remit your jury duty pay to your employer because your employer continued to pay your wages during your jury service, the amount paid to your employer is deductible as an adjustment to income. Jury Duty Pay To […]
To report rental income from personal property in the TaxAct program, follow the steps below. Online Dashboard From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Explore More drop-down. Click Add beside Other Income. Click Continue, then enter […]
If you itemized deductions on your prior year tax return, then a state refund that you received this year may be taxable. If you did not itemize deductions on your prior year tax return, your state refund won’t be taxed. To report Form 1099-G State Refund Document in the TaxAct program, follow the steps below. […]
When you enter your state withholdings from Form W-2, Wage and Tax Statement, they automatically transfer to Schedule A (Form 1040), Itemized Deductions, as an itemized deduction and do not need to be entered again in the program. To enter state withholdings from your W-2, go to our Form W-2 – Entering in Program FAQ. To view […]
You can enter Qualified Business Income (QBI) related to self-employed or sole proprietor income when entering the details about that Sole Proprietorship. See Schedule C – Entering Sole Proprietorship in Program for details. Related Links IRS Publication 535 Qualified Business Income Deduction – General Information Qualified Business Income Deduction – Pass-Through Partnership Income Qualified […]
You can enter Qualified Business Income (QBI) for a rental property when entering the details about that rental property. See Schedule E – Entering Rental Property in Program for details. Related Links IRS Qualified Business Income Deduction Qualified Business Income Deduction – General Information Qualified Business Income Deduction – Pass-Through Partnership Income Qualified Business Income […]
For futures contracts, the Form 1099-B that you receive needs to be reported on Part I of Form 6781, Gains and Losses From Section 1256 Contracts and Straddles. You cannot import this type of transaction into the TaxAct program; you need to manually enter it. To access Form 6781 in the TaxAct program, follow the […]
In certain situations (such as recharacterization of an IRA contribution or Roth IRA conversion, return of IRA contributions, or return of excess traditional IRA contributions), a statement must be attached to your return explaining the recharacterization or distribution. IRS Instructions for Form 8606, Nondeductible IRAs, provides the most definitive guidance for reporting recharacterizations. You can […]
TaxAct customers can enter multiple Form 1099-B Proceeds From Broker and Barter Exchange Transactions quickly and easily by importing a CSV (comma separated values) file. To import transactions, you will need to either: obtain a spreadsheet file from your broker and import it using the steps below, or create your own spreadsheet – see Form […]
You may or may not receive Form W-2G, Certain Gambling Winnings, but you can report all gambling winnings in the same place in the TaxAct program. Gambling winnings are reported as Other Income on Schedule 1 (Form 1040) Additional Income and Adjustments to Income, Line 8. If you are able to itemize your deductions, gambling […]
Review IRS Publication 946 for details on when you must recapture excess depreciation. To access Form 4797, go to our Form 4797 – Sale of Business Property Sale of Asset Entry into Program FAQ. During the interview, click Yes for Form 4797 – Other Topics, then on the next screen, check the box Check here […]
You may or may not have received a Form W-2G, Certain Gambling Winnings, for your gambling winnings. To enter your gambling winnings, follow the steps below. Online Dashboard From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the […]
If you have received a Form W-2C, Corrected Wage and Tax Statement (a corrected W-2 form), you can still electronically file your return. Enter the information from your Form W-2C as a Form W-2, Wage and Tax Statement in the program. See Entering in Program – Form W-2 to access the Form W-2. There is […]
You must file IRS Form 8938, Statement of Specified Foreign Financial Assets, if you have an interest in specified foreign assets and the value of those assets is more than the applicable reporting threshold. See the IRS Instructions for Form 8938 and Basic Questions and Answers on Form 8938 for more information. To enter the […]
To view a summary of your QBI deductions, follow the steps below. Online Dashboard From within your TaxAct return, click Resources. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Under My Return, click Federal Search. Click the Business Income drop-down, then click Qualified business income (QBI) […]
Schedule K-1 from a Partnership reports Section 199A information in Box 20, Code Z. You should also have a larger K-1 Statement attached that contains more detailed information that will be used to calculate the Qualified Business Income (QBI) deduction. The QBI deduction is a deduction of up to 20% of qualified business income, plus […]
Schedule K-1 from an S Corporation reports Section 199A information in Box 17, Code V. You may also have a larger K-1 Statement attached that contains more detailed information that will be used to calculate the Qualified Business Income (QBI) deduction. The QBI deduction is a deduction of up to 20% of qualified business income, […]
To enter a loss for the sale of business property that was not previously entered as a depreciable asset, follow the steps below. Online Dashboard From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Business & Self […]
If you have a casualty and/or theft loss on property used 100% for business, you will report the loss on Form 4684, Casualties and Thefts, in Section B for business property. To report casualty/theft loss on property used 100% for business on Form 4684 in the TaxAct program, follow the steps below. Once this information has […]
If you enter an amount in Box 8 of Form W-2, Wage and Tax Statement for Allocated Tips, the TaxAct program will transfer the amount to Form 4137, Social Security and Medicare Tax on Unreported Tip Income, for the calculation of social security and Medicare tax on the tips to be reported on Line 5 […]
To enter undistributed capital gain information from Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, follow the steps below. Online Dashboard From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Explore More drop-down. Click Add beside […]
See Form 1045 – Schedule A-NOL (Current Year NOL) (CARRYFORWARD) for information.
Form 1042-S Foreign Person’s U.S. Source Income Subject to Withholding is used to report amounts paid to foreign persons (including persons presumed to be foreign) that are subject to tax withholding, even if no amount is deducted and withheld from the payment because of a treaty or exception to taxation, or if any amount withheld […]
Based on IRS instructions and the information you enter in TaxAct, the TaxAct® program determines what amount (if any) needs to appear on Lines 4a and 4b of Form 1040 U.S. Individual Income Tax Return. Usually, if the amount is fully taxable, Line 4a is left blank and the total distribution is entered on Line […]
Amounts you receive as workers’ compensation for an occupational sickness or injury are generally excluded from income if they’re paid under a workers’ compensation law or statute. This type of income is not included on your tax return using the TaxAct program. If you have received an IRS Form W-2 Wage and Tax Statement for […]
To enter or review information on Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc., follow the steps below. Online Dashboard From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Business & Self Employed drop-down. Click […]
To enter or review a beneficiary’s share of income, deductions and/or credits in the TaxAct program, from the information on Schedule K-1 (Form 1041), Beneficiary’s Share of Income, Deductions, Credits, etc., follow the steps below. Online Dashboard From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner […]
You will receive a Form 1099-Q from each qualified tuition program (529 plan) or Coverdell ESA from which you received a distribution during the tax year. The amount of your gross distribution (Box 1) shown on each form will be divided between your earnings (Box 2) and your basis or return of investment (Box 3). […]
If you received foreign income, you must report it on your individual income tax return. IRS Form 2555 Foreign Earned Income, Form 1116 Foreign Tax Credit, or Schedule A (Form 1040) Itemized Deductions may provide income tax benefits. See the following for entering income or distributions from foreign entities: Foreign Earned Compensation – FEC Foreign […]
If you received foreign income that was not reported on Form W-2 or Form 1099-R, complete the FEC (Foreign Employer Compensation) worksheet. The foreign income will be carried to Form 1040, Line 1a or Line 5, depending on the type of income. To enter foreign wages or foreign retirement income, follow the steps below. Foreign […]
Social Security benefits include monthly retirement, survivor, and disability payments, and they are reported to you on Form SSA-1099. A portion of these benefits may be taxable depending on your income level. TaxAct will calculate this using the Taxable Social Security Benefits Worksheet. Note: Supplemental Security Income (SSI) is not taxable and should not be […]
The TaxAct program supports the following worksheets for Social Security Benefits. These worksheets are used to calculate your taxable social security benefits. Worksheet 1 – Figuring Your Taxable Benefits from IRS Publication 915 Worksheet 2 – Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993) Worksheet 4 – Figure Your […]
To report Form SSA-1099 in TaxAct, follow the steps below. Online Dashboard From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Retirement & Social Security drop-down. Click Add beside Social Security Benefits (From SSA-1099 or RRB-1099). Complete the […]
Retired railroad workers can receive two different forms for reporting retirement benefits. The forms have similar names, so make sure to pay attention so you can properly report them in the TaxAct program. Form RRB-1099 reports Social Security Equivalent payments. See Forms SSA-1099 and RRB-1099 – Entering Social Security or Railroad Retirement in Program for […]
To enter or review information from Form SSA-1099, Social Security Benefit Statement, or Form RRB-1099, Railroad Retirement Board Social Security, follow the steps below. Online Dashboard From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Retirement & […]
Health Savings Account (HSA) distributions are reported on Form 1099-SA, Distributions from an HSA, Archer MSA, or Medicare Advantage MSA, and the information transfers to Form 8889 Health Savings Accounts (HSAs). To enter distribution information in the program, follow the steps below. Online Dashboard From within your TaxAct return, click Income. On smaller devices, click […]
Medicare Part C (Medicare Advantage Plans) is another way to get your Medicare benefits. It combines Part A, Part B, and sometimes Part D (prescription drug) coverage. Medicare Advantage Plans are managed by private insurance companies approved by Medicare. These plans must cover medically necessary services. Medicare C is reported on Form 1099-SA, Distributions from […]
Use Form 1099-S, Proceeds From Real Estate Transactions, to report proceeds from real estate transactions. You will report the information on a specific part of the form, depending on how you use the property: main home, timeshare/vacation home, investment property, business, or rental. To report your real estate proceeds in the TaxAct program, follow the steps below. […]
To report Form 1099-OID, follow the steps below. Online Dashboard From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Explore More drop-down. Click Add beside Original Issue Discount. Complete the rest of the interview process. Classic From within […]
A cooperative files Form 1099-PATR, Taxable Distributions Received From Cooperatives, for each person paid at least $10 in dividends and other distributions. If you received a Form 1099-PATR, you will need to determine if the amount needs to be entered on your return. If the purchases you made from the cooperative were only for personal […]
The Form 1099-B that you receive might only report the sale date and sales proceeds. If it does not report the date acquired or cost basis, you still need to enter that information when you report your Form 1099-B in the TaxAct program so that it will transfer to Schedule D and/or Form 8949. The […]
When you enter federal and/or state withholding amounts reported to you on Form 1099-MISC, the TaxAct program transfers the information to the appropriate line(s) of the other forms. If you have multiple amounts to enter you would combine them into one entry (one entry for the federal withheld amounts and one for the state withheld […]
To review Form 1099-MISC Miscellaneous Income that you have already entered, access the topic and go back through the interview process using the steps detailed in Form 1099-MISC – Entering in Program.
To enter Form 1099-MISC, follow the steps below. Online Dashboard From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner of your screen, then make your selection. If the 1099-MISC is related to your business or rental, click the Business & Self Employed drop-down and click Add beside the […]
If you received a Form 1099-MISC, Miscellaneous Income, instead of a Form W-2, Wage and Tax Statement, the income you received is considered non-employee compensation or self-employment income. You need to complete Schedule C or Schedule F in the TaxAct program and then enter your Form 1099-MISC information. You may also need to complete Schedule […]
In most circumstances, when a Federal Government agency, financial institution, or credit union cancels or forgives a debt of $600 or more, you will receive Form 1099-C, Cancellation of Debt. The amount of canceled debt appears in Box 2. Other important information may appear in additional boxes, such as: Box 1 – Date of identifiable […]
If you received a Form 1099-A, Acquisition or Abandonment of Secured Property, you need to determine if there has been a cancellation of debt. The lender should have sent you a Form 1099-C Cancellation of Debt if any debt was canceled. If you have not received a Form 1099-C, you may want to contact your […]
According to the IRS, you may not need to report the sale of your main home. Reporting is required only if either of the following is true: You cannot exclude all the gain. You received Form 1099-S for the sale. If you are required to report the sale, follow the steps below. Excluding Gain on […]
This amount is generally only taxable if you itemized deductions in the prior year. To enter or review your state income tax refund in the TaxAct program, follow the steps below. The program automatically uses the Form 1040 State Refund – State Refund Worksheet to determine the taxable amount based on the information entered for […]
Form 1099-G is used to report a variety of government payments, including: Unemployment compensation (Box 1) – See Form 1040 – Unemployment Compensation for details on data entry. State or local income tax refunds, credits, or offsets (Box 2) – See Form 1099-G – Box 2 – Entering State Income Tax Refund in Program for […]
Entries on Form 1099-G Certain Government Payments, Box 6 (this covers certain government payments) are generally reported on IRS Schedule 1 (Form 1040) Additional Income and Adjustments to Income, Line 8. If the item relates to an activity for which you are required to file Schedule C, Schedule E, Schedule F, or Form 4835, you need […]
For steps on how to enter Form 1099-G for unemployment compensation in the TaxAct program, go to the FAQ Form 1040 – Unemployment Compensation.
There are several options that you can use to enter or import your stock transactions and information from Form 1099-B. Once entered, the TaxAct program will complete Form 8949 Sales and Other Dispositions of Capital Assets, Schedule D Capital Gains and Losses, and Form 1040 U.S. Individual Income Tax Return, Line 7, as applicable. If […]
Generally, the IRS requires all sales and exchanges of capital assets, including stocks, bonds, etc., to be entered on separate lines on Form 8949, however, the Form 8949 Instructions provide two exceptions to this requirement. Exception 1: When basis was reported to the IRS and no adjustments are needed, totals may be reported directly on […]
Capital gains and losses are reported on Form 1099-B and are automatically carried to Schedule D and/or Form 8949, as applicable. The 1099-B form you received might not report the date acquired or the cost basis, but you are responsible for acquiring and entering that information to properly report the transactions. Sale Dates – If […]
Restricted stock is stock that you get from your employer for services you perform. It is non-transferable and subject to a substantial risk of forfeiture. You do not have to include the value of the stock in your income when you receive it. If you get dividends on restricted stock, however, you must include them […]
Follow the steps below to enter Form 1099-DIV Dividends and Distributions in the TaxAct program. Online Dashboard From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Investments & Savings drop-down. Click Add beside Dividends. Complete the rest […]
See IRS Publication 504 for more information about alimony. NOTE: Amounts paid as alimony or separate maintenance payments under a divorce or separation agreement executed after 2018 are not deductible by the payer and are not included in the income of the recipient. Alimony Received To enter alimony received in the TaxAct program, follow the […]
Use Form 8606 to report the following: Nondeductible contributions you made to traditional IRAs; Distributions from traditional, SEP, or SIMPLE IRAs, if you have a basis in these IRAs; Conversions from traditional, SEP, or SIMPLE IRAs to Roth IRAs; and Distributions from Roth IRAs. For info on entering Form 1099-R in the TaxAct program, go […]
Use Form 5329 to report additional taxes on: IRAs Other qualified retirement plans Modified endowment contracts Coverdell ESAs QTPs Archer MSAs HSAs ABLE accounts To enter, review, or delete information for Form 5329, follow the steps below. Online Dashboard From within your TaxAct return, click Taxes & Miscellaneous. On smaller devices, click the menu at […]
Form 1099-K is required to be issued by payment card companies, payment apps and online marketplaces to report payments made in settlement of reportable payment transactions. Like Form W-2 or 1099-NEC, this form will be issued to the taxpayer and the IRS by the issuer. See the FAQ Form 1099-K – Entering in Program for […]
State or local governments or a tax-exempt organization under IRC 501(c) are eligible to establish a 457(b) plan for its employees. These plans can either be eligible plans under IRC 457(b) or ineligible plans under IRC 457(f). Plans eligible under 457(b) allow employees of sponsoring organizations to defer income taxation on retirement savings into future […]
To enter or review information for Schedule E (Form 1040), follow the steps below. You may receive Form 1099-MISC or Form 1099-K reporting income or transactions related to your rental or royalty income. You will be able to enter information for those income forms during the Schedule E interview process. Online Dashboard From within your […]
If you own a business, freelance, or earn money through gig work, you are generally considered self-employed. Enter the income and expenses related to your business on Schedule C, following the steps below. You may receive Form 1099-NEC or Form 1099-K reporting income or transactions related to your self-employment. You will select all applicable income […]
To add information about your farm, filed on Federal Schedule F, follow these steps. Online Dashboard From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Expand the Business & Self Employed section. Click Add beside Farm Income (Schedule F). […]
If you are not engaged in the activity for profit, then the activity may be considered a hobby. You are still required to report hobby income on your tax return. See IRS Publication 17 for details. NOTE: You may not claim hobby expenses (at least through 2025, pending further legislation). Online Dashboard From within […]
Form 1099-K is required to be issued by payment card companies, payment apps and online marketplaces to report payments made in settlement of reportable payment transactions. Like Form W-2 or 1099-NEC, this form will be issued to the taxpayer and the IRS by the issuer. See the FAQ Form 1099-K – Entering in Program for […]
Form 1099-K is required to be issued by payment card companies, payment apps and online marketplaces to report payments made in settlement of reportable payment transactions. Like Form W-2 or 1099-NEC, this form will be issued to the taxpayer and the IRS by the issuer. See the IRS Instructions for Form 1099-K for a list […]
To enter Form 1099-R. Distributions from pensions, annuities, retirement or profit-sharing plans, IRAs, insurance contracts, etc., follow the steps below. Online Dashboards From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Expand the Retirement & Social Security section. Click […]
TaxAct uses the entries made for all Forms 1099-R to calculate the amounts that appear on Lines 4a, 4b, 5a, or 5b of Form 1040. If you think an amount regarding your retirement plan income is incorrect on Form 1040, review your Form 1099-R entries by following the steps below. If you change any of […]
You’ll receive a Form 1099-R from the payer of your 401(k) distribution. A copy of that form is also sent to the IRS. To report the 401(k) distribution in your TaxAct return, follow these steps. Online Dashboards From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner […]
To indicate that a Form 1099-INT is foreign Interest for a mutual fund or a regulated investment company, follow these steps. Online Dashboards From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Expand Investment and Savings. Click Add beside […]
To report Form 1099-INT, Interest Income, in the TaxAct program, follow the steps below. Online Dashboards From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Expand Investment and Savings. Click Add beside Interest to add a new Form 1099-INT. […]
Stock Assistant is a valuable tool to provide a quick entry (spreadsheet style) mechanism for capital gain transactions reported on Form 1099-B. You may quickly add new stock transactions by selecting the bottom table row. A new entry will be automatically created, and you may enter all the necessary details. Follow the steps below to […]
If the Box 13 Statutory employee is checked on your Form W-2, the income needs to be reported on Schedule C. To enter statutory employee income, Add or edit Form W-2 (see the Form W-2 – Entering in Program FAQ for details). During the interview process, on the screen titled W-2: Enter Your information, below Box […]
You can report more than one Form W-2 in the TaxAct program. You might receive more than one Form W-2 if you changed jobs or worked for more than one employer during a tax year. To report more than one Form W-2, follow the steps below. Online Dashboards From within your TaxAct return, click Income. […]
Box 14 of Form W-2 allows your employer to enter a variety of information. Employers might use abbreviations and codes in Box 14, and you may need to ask your employer to interpret those abbreviations or codes. Reporting Box 14 information in your W-2 in TaxAct is only for your benefit and tax records. The […]
Reporting your income from Form W-2 is simple in TaxAct. The steps vary depending on which version of TaxAct you are using. Online If it’s your first time through the Q&A, just follow the interview process. On the screen titled What kind of income did you have in 20XX?, click the checkbox next to Worked […]
Refer to IRS Publication 225 Farmer’s Tax Guide for complete instructions. Most government program payments are reported on Schedule F, Part I. This includes government payments, conservation program payments, indemnity payments for livestock killed by a natural disaster, cost-sharing payments, and forage disaster payments (cash, materials, services, etc.). If a government payment is paid and […]
With the stock data import feature, you can import information from certain brokerages and financial institutions. Supported brokerages/institutions and steps vary depending on whether you are working in the online or desktop program. Online To access the stock data import feature, follow the steps below. Open the return. Go to Federal > Investment Income > […]
Create Spreadsheet When creating a spreadsheet to import information into your tax return, the following columns are required to report Form 1099-B: Description Date Sold Sales Proceeds Date Acquired Cost or Other Basis Some additional fields may also be needed: Additional Description: You may have a column in your file reflecting information such as the quantity […]
An independent contractor or self-employed individual should report income on Schedule C (Form 1040). You may need to file other schedules and forms, including Schedule SE (Form 1040) on income from a trade or business. You must report all income, even if you did not receive a Form 1099-NEC. See IRS Instructions for Schedule C […]
Income and Filing Status As a dependent, you have a filing requirement if you had income (earned or unearned) above the threshold amount for your filing status. For details on each threshold, see Publication 501. Unearned income includes taxable interest, ordinary dividends, and capital gain distributions. It also includes unemployment compensation, taxable social security benefits, […]
Schedules L, M-1, and M-2 are not required if the partnership meets all four of the following conditions: The partnership’s total receipts for the tax year were less than $250,000. The partnership’s total assets at the end of the tax year were less than $1 million. Schedule K-1s are filed with the return and furnished […]
To report or edit Form 1099-MISC Miscellaneous Income Box 7 (if you need help accessing Form 1099-MISC in the TaxAct program, go to our Form 1099-MISC – Entering in Program FAQ): From within your Form 1099-MISC, continue with the interview process until you reach the screen titled 1099-MISC: Enter information on form. Click the checkbox next to Box 7 – […]
Partners may not be able to deduct the entire loss or deduction that was reported on Schedule K-1 on their own return. Basis, at-risk, and passive activity limits are applied to partner’s deductions or losses in that specific order based on IRS guidelines. Further ReadingPartner’s Instructions for Schedule K-1 (Form 1065) Publication 541Publication 551 Note […]
Enter unreimbursed partnership expenses (not deductible as an itemized deduction on Schedule A (Form 1040) Itemized Deductions), directly on the Schedule K-1 (Form 1065) in the Additional Information section. The total amount of unreimbursed partnership expenses will flow to Schedule E (Form 1040) Supplemental Income and Loss, on page 2. The name on Line 28 […]
Box 15 on Form W-2 Wage and Tax Statement must list the state for which the employer withheld the taxes and, more importantly, to which the employer remitted the taxes. If it doesn’t, the state claimed will reject the withholdings, as they never received them from the employer. You must always contact the employer for […]
Per IRS Instructions for Form 8949, “If you sold a block of stock (or similar property) that you acquired through several different purchases, you may report the sale on one row and enter “VARIOUS” in column (b). However, you still must report the short-term gain or (loss) on the sale on Part I and the […]
Restricted Stock Units (RSUs) are a form of compensation offered by some employers. These are generally taxed at the time of vesting, whereas employee stock options are usually taxed at the time of option exercise. The employer is required to withhold taxes as soon as the RSUs become vested. The employer will issue Form W-2 […]
To enter or review business expenses on your Schedule C in the TaxAct program (if you need help accessing Schedule C, go to our Schedule C – Entering Sole Proprietorship in Program FAQ): From within your Schedule C, continue with the interview process until you reach the screen titled Great! Let’s get started on expenses for this […]
Are you an employee or independent contractor? The answer is important for tax purposes because it shapes how you report your income. When you are an employee, your employer must withhold income tax and your portion of Social Security and Medicare taxes (unless exempt). You’ll receive a Form W-2 Wage and Tax Statement that shows […]
Per IRS Publication 970, page 5: Tax-Free Scholarships and Fellowship Grants A scholarship or fellowship grant is tax free (excludable from gross income) only if you are a candidate for a degree at an eligible educational institution. A scholarship or fellowship grant is tax free only to the extent: It doesn’t exceed your qualified education […]
If your income is modest, it is likely that none of your Social Security benefits are taxable. As your gross income increases, a higher percentage of your Social Security benefits become taxable, up to a maximum of 85% of your total benefits. The TaxAct® program will automatically calculate the taxable amount of your Social Security […]
If you use your dwelling unit for both rental and personal purposes, divide your expenses between the rental use and the personal use based on the number of days used for each purpose. You will allocate your expenses based on the number of personal days as compared to the number of rental days. The personal […]
Although you cannot enter information from Form 1099-B Proceeds From Broker and Barter Exchange Transactions directly onto Schedule D (Form 1040) Capital Gains and Losses, the following steps may help to streamline the entry process for TaxAct Desktop (download) customers. The information to be entered on Form 8949 Sales and Other Dispositions of Capital Assets […]
Use Form 1099-S Proceeds From Real Estate Transactions to report proceeds from real estate transactions. How the property is used (personal, investment, business) will determine where the information is reported. For more information, go to IRS Instructions for Form 1099-S. Reporting real estate for personal use: If the 1099-S was for the sale of your […]
If you receive a Form 1099-MISC with an entry in Box 6 for medical and health care payments, you need to report it in the TaxAct program and have the TaxAct program transfer the information to Schedule C. You need to create a Schedule C before you report Form 1099-MISC and assign it to Schedule […]
If you need help reporting Form 1099-MISC in the TaxAct program, go to our Form 1099-MISC – Entering in Program FAQ. Generally, report this amount from Form 1099-MISC Miscellaneous Income, Box 3 on the Other Income line of Schedule 1 (Form 1040) Additional Income and Adjustments to Income, Line 8. The amount reported in Box 3 […]
To enter royalty income in the TaxAct program: First, follow the steps in our article Schedule E – Entering Rental Property in Program to add Schedule E (Form 1040) to your tax return. Within your Schedule E, continue with the interview process until you reach the screen titled Rental and Royalty Income – Property Type. Click the Property type dropdown, then click 6 […]
Enter or review the information for Form 1099-MISC Box 1 – Rents If you need help accessing Form 1099-MISC in the TacAct program, go to our Form 1099-MISC – Entering in Program FAQ): From within your Form 1099-MISC, continue with the interview process until you reach the screen titled 1099-MISC: Enter information on form. Click the data […]
Investor As an investor you report all of your transactions on Form 8949 Sales and Other Dispositions of Capital Assets and Schedule D (Form 1040) Capital Gains and Losses. An investor, who is not a trader, is subject to the capital loss limitation (maximum loss of $3,000 or $1,500 if married filing separately) and wash […]
Depreciation on your home is deductible only if you use your home for business. Per IRS Publication 587 Business Use of Your Home (Including Use by Daycare Providers), page 8: Figuring the depreciation deduction for the current year. If you began using your home for business before 2023, continue to use the same depreciation method […]
Form 8829 Expenses for Business Use of Your Home is used to figure the allowable expenses for business use of your home on Schedule C (Form 1040) Profit or Loss From Business. Do not use Form 8829 if you are claiming expenses as an employee or partner, or if you are claiming expenses on Schedule […]
To report or edit Form 1099-MISC Miscellaneous Income, Box 15 -Nonqualified deferred compensation (if you need help accessing Form 1099-MISC in the TaxAct program, go to our Form 1099-MISC – Entering in Program FAQ): From within your Form 1099-MISC, continue with the interview process until you reach the screen titled 1099-MISC: Enter information on form. Click the […]
Per IRS Instructions for Forms 1099-INT and 1099-OID, page 3: Box 8. Tax-Exempt Interest Enter tax-exempt interest that is not OID of $10 or more that is credited or paid to the person’s account if that interest is paid on obligations issued by a state, the District of Columbia, a U.S. possession, an Indian tribal […]
The Joint vs. Separate Analysis will separate the net capital gains or losses by taxpayer and spouse, up to the amounts allowed. You may deduct capital losses up to the amount of your capital gains plus $3,000 ($1,500 if married filing separately). There is no report in the program that shows separate capital gain transactions […]
A “Wash Sale” is trading activity in which shares of a security are sold at a loss and a substantially identical security is purchased within a 61-day window that extends from 30 days before the date of the sale to 30 days after the date of the sale. The portion of the loss associated with […]
Follow the steps for your return type to enter forgiven PPP loans For 1065 returns through Q&A: Generally, the tax-exempt income resulting from the forgiveness of a PPP loan is reported on Schedule K, line 18b. To enter the tax-exempt income from the PPP loan: 1. From within your TaxAct return (Online or Desktop), click […]
Every Form 1099-MISC Miscellaneous Income needs to be assigned to one of the following schedules or worksheets: For the self-employed, freelancers, and independent contractors – Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship), For those that own rental and royalty property – Schedule E (Form 1040) Supplemental Income and Loss, or Other […]
Per IRS Publication 535, Business Expenses, page 5: Capital Versus Deductible Expenses Deduction for qualified business income. For tax years beginning after 2017, you may be entitled to take a deduction of up to 20% of your qualified business income from your qualified trade or business, plus 20% of the aggregate amount of qualified real […]
> Car Four-wheeled vehicle made for use on public roads and rated at 6,000 pounds or less of unloaded gross vehicle weight. > Light Truck/SUV Truck or SUV rated at 6,000 pounds or less of unloaded gross vehicle weight. > Heavy Truck Vehicles used mainly for business because they are designed for business purposes; for […]
Virtual currencies such as Bitcoin or other “cryptocurrencies” are taxed differently from cash or coin currency. The IRS generally recognizes virtual currency as property, not legal tender. As such, virtual currency received as payment by an individual or business must be included as miscellaneous income as an exchange of property or service. The value of […]
To assign Form(s) 1099-MISC Miscellaneous Income to Schedule C (Form 1040) Profit or Loss From Business or Schedule(s) E Supplemental Income and Loss (if you need help accessing Form 1099-MISC in the TaxAct program, go to our Form 1099-MISC – Entering in Program FAQ): From within your Form 1099-MISC, continue with the interview process until you […]
IRS business activity codes are for your principal business or professional activity. For a list of business activity codes, see Instructions for Schedule C Profit or Loss From Business. Choose the category that best describes your sole proprietorship’s primary business activity (for example, real estate) and select the activity that best identifies the source of […]
As a sales representative for a direct sales company, you have an obligation to report income earned through that business for tax purposes. At tax time, the direct sales company will send Form 1099-NEC Nonemployee Compensation (if value is above $5,000) or Form 1099-MISC Miscellaneous Compensation and would report any prizes/incentives as Box 3 income. A copy of […]
If your Schedule K-1 is showing unallowed prior year losses and current year unallowed losses in Box 2, but prior year unallowed losses are not showing on Form 8582 Passive Activity Loss Limitations, you have most likely indicated an amount in Box 1 as nonpassive and an amount in Box 2 as passive on the […]
There are limits on the amounts of depreciation you can take per year for Passenger Automobiles. Per the IRS, the limits you can deduct are based on the date you placed the automobile in service. For example, a $100,000 vehicle placed in service in 2019, you are allowed to deduct $18,000 for the first year, […]
If you disposed of both depreciable property and other property (for example, a building and land) in the same transaction and realized a gain, you must allocate the amount realized between the two types of property based on their respective Fair Market Values (FMVs) to figure the part of the gain to be recaptured as […]
Not all Forms W-2 are eligible for importing into the TaxAct program. Whether a W-2 is eligible for importing into the TaxAct program is based on the Employer Identification Number (EIN) on your W-2. To enter the EIN on your Form W-2, and import the Form W-2 you received into the TaxAct program (if you […]
Per the IRS Simplified Option for Home Office Deduction webpage: Beginning in tax year 2013 (returns filed in 2014), taxpayers may use a simplified option when figuring the deduction for business use of their home. Note: This simplified option does not change the criteria for who may claim a home office deduction. It merely simplifies […]
The IRS has a Business Rule (or rejection code) that will reject a return with state winnings in Box 14 of the Form W-2G Certain Gambling Winnings, if either the state abbreviation or state ID field is missing. The alert is looking for “valid” data. You can enter any of the following in the State […]
You can exclude up to $5,250 of educational assistance benefits you received from your employer. To qualify for the exclusion, the benefits must be part of a written educational assistance program. Your employer can tell you whether your benefits are part of a qualified program. These excluded benefits are not included in wages in Box […]
There are many reasons you could have received a notice regarding your Form 1099-MISC Miscellaneous Income. The most common reasons are listed below: The form was never entered into the TaxAct program and the income was not reported elsewhere on the return. Entry error: Example of a transposed number: The number that should have been […]
IRS Schedule K-1 (Form 1041) Beneficiary’s Share of Income, Deductions, Credits, etc. is used to report a beneficiary’s share of income, deductions, and credits from a trust or estate. The fiduciary must file Schedule K-1 with the IRS for each beneficiary and provide each beneficiary with a copy. Don’t file Schedule K-1 with your individual […]
To enter royalty income in the TaxAct program, go to our Form 1099-MISC – Royalties FAQ. Per IRS Publication 525 Taxable and Nontaxable Income, page 17: Royalties Royalties from copyrights; patents; and oil, gas, and mineral properties are taxable as ordinary income. In most cases, you report royalties on Schedule E (Form 1040). However, if […]
Per IRS Instructions for Form 1120-S U.S. Income Tax Return for an S Corporation, on page 21: Schedules K and K-1 (General Instructions) Purpose of Schedules The corporation is liable for taxes on lines 22a, 22b, and 22c on page 1 of Form 1120-S. Shareholders are liable for tax on their shares of the corporation’s […]
TaxAct® supports Publicly Traded Partnerships (PTPs). Per IRS Partner’s Instructions for Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc. (For Partner’s Use Only), on page 5: Publicly traded partnerships (PTP). The passive activity limitations are applied separately for items (other than the low-income housing credit and the rehabilitation credit) from each PTP. Thus, a net passive […]
While the at-risk limitations is calculated on IRS Form 6198 At-Risk Limitations and the passive activity limitations is calculated on IRS Form 8582 Passive Activity Loss Limitations, there is not an IRS form for the potential limitations on the amount of partnership losses that you may deduct based on your basis in the partnership. You […]
Information on shareholder basis can be found in the instructions for Schedule K-1 (Form 1120-S) and Form 7203. Per IRS Shareholder’s Instructions for Schedule K-1 (Form 1120-S) Shareholder’s Share of Income, Deductions, Credits, etc. (For Shareholder’s Use Only), page 2: Basis Limitations Generally, the deduction for your share of aggregate losses and deductions reported on Schedule K-1 […]
While the at-risk limitations are calculated on IRS Form 6198 At-Risk Limitations and the passive activity limitations are calculated on IRS Form 8582 Passive Activity Loss Limitations, there is not an IRS form for the potential limitations on the amount of corporate losses that you may deduct based on your basis in the corporation. You would need to enter only […]
If Part II, Item I of your Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc. indicates that the K-1 was issued to the IRA and not to you as an individual, you should not report the information on your individual income tax return. Federal tax law requires that a Schedule K-1 be sent to every […]
Per IRS Instructions for Form 8582 Passive Activity Loss Limitations, starting page 4: Active participation. If you actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income. This special allowance is an exception to the general rule disallowing […]
Per IRS Publication 527 Residential Rental Property, page 5: Repairs and Improvements Generally, an expense for repairing or maintaining your rental property may be deducted if you aren’t required to capitalize the expense. Improvements. You must capitalize any expense you pay to improve your rental property. An expense is for an improvement if it results […]
A vacation home property won’t be considered passive and won’t be entered on Form 8582 Passive Activity Loss Limitations. Per IRS Publication 925 Passive Activity and At-Risk Rules, page 5: Activities That Aren’t Passive Activities 3. The rental of a dwelling unit that you also used for personal purposes during the year for more than […]
Deductible closing costs are generally those for interest, certain mortgage points, and deductible real estate taxes. Other settlement fees and closing costs for buying the property become additions to your basis in the property. These include abstract fees, charges for installing utility services, legal fees, recording fees, surveys, transfer taxes, title insurance, and any amounts […]
A rental activity is a passive activity even if you materially participated in that activity, unless you materially participated as a real estate professional. Per IRS Publication 925 Passive Activity and At-Risk Rules, page 4: Phaseout rule. The maximum special allowance of $25,000 ($12,500 for married individuals filing separate returns and living apart at all […]
Generally, the basis in property you inherited from a decedent is the Fair Market Value (FMV) at the date of the individual’s death. However, you should refer to IRS Publication 551 Basis of Assets for additional information and exceptions. Note that any link in the information above is updated each year automatically and will take […]
The CUSIP acronym typically refers to both the Committee on Uniform Security Identification Procedures and the 9-character alphanumeric security identifiers that it distributes for all North American securities for the purposes of facilitating, clearing, and settlement of trades. This number is not the Federal Identification Number (FEIN) for a company. A CUSIP number identifies most […]
To report or edit Form 1099-MISC Miscellaneous Income Box 3 – Other income (if you need help reporting Form 1099-MISC in the TaxAct program, go to our Form 1099-MISC – Entering in Program FAQ): From within your Form 1099-MISC, continue with the interview process until you reach the screen titled 1099-MISC: Enter information on form. Click the data entry field below […]
Per IRS instructions, when making a line item entry that contains multiple documents, add all amounts and then round the total with 50 cents or more rounding up to the next dollar and 49 cents or less rounding down. For items listed individually (i.e. on Schedule B (Form 1040) Interest and Ordinary Dividends) and transmitted […]
The amount of social security and Medicare tax withheld from your pay appears in Boxes 4 and 6 of Form W-2 Wage and Tax Statement. There is no limit on the amount of wages subject to the Medicare tax (1.45%), but there is a maximum amount of wages subject to social security tax (6.2%). The […]
For Social Security recipients, the TaxAct® program will calculate the taxable portion of the Social Security benefits reported on Line 5a of Form 1040 U.S. Individual Income Tax Return based on Worksheet 1 from IRS Publication 915 Social Security and Equivalent Railroad Retirement Benefits, page 16. If you reside in a country (listed in Publication […]
The Internal Revenue Procedure 2005-11 sets forth the standards that are used to determine whether student-employees are eligible for the student FICA exemption. This is not reported on the individual tax return, but is reflected on Form W-2 Wage and Tax Statement and on the school’s employment tax returns filed with the IRS. The employer […]
To report sale of personal property (or inherited property that is considered personal property) on Schedule D (Form 1040) Capital Gains and Losses in the TaxAct program, you will report it in the Capital Gains and Losses section of the program, and select Adjustment Code “L” (if the inherited property is not considered “personal use” property, […]
If you are depreciating assets used less than 100% for business on Schedule E Supplemental Income and Loss, those assets will be listed on Line 26 or 27 of Form 4562 Depreciation and Amortization (Including Information on Listed Property). To calculate rental expenses for a property in which you live in one part and rent […]
IRS Publication 527 Residential Rental Property (Including Rental of Vacation Homes) provides information for renting out a house or vacation home. Chapter 2 provides information regarding depreciation of rental property. There is a chart in this chapter which provides information regarding the recovery periods for property used in rental activities. Note that any link in […]
To calculate rental expenses for a property in which you live in one part and rent out the other, first calculate the percentage of the rental portion by figuring the square footage of that part compared to the square footage of the entire property. Apply this percentage to each expense and enter those amounts as […]
To claim rental expenses for a duplex where you live in one unit and rent the other, you would normally enter half of the expense amounts into the program. In a situation when one side of the duplex is larger than the other, you will need to compute the expenses based on square footage. To […]
The information from Schedule K-1 will only transfer to Schedule E (Form 1040) Supplemental Income and Loss, page 2, columns (a) though (f) when there are amounts to be reported in columns (g) through (k) on Line 28. Per the IRS, information only needs to be transferred to Part II when passive and non-passive amounts […]
Per IRS Instructions for Schedule B Interest and Ordinary Dividends, page 1; Schedule B (Form 1040) will print with your return only for the any of the following reasons: You had over $1,500 of taxable interest or ordinary dividends. You received interest from a seller-financed mortgage and the buyer used the property as a personal […]
If you did not directly receive the prior year’s tax refund, meaning it was used to pay a debt on your behalf, it is still considered income to you in the current year.
Per the IRS Retirement Plans FAQs on Designated Roth Accounts webpage: What is a designated Roth account? A designated Roth account is a feature in new or existing 401(k), 403(b), or governmental 457(b) plans. If a plan includes a designated Roth feature, employees can designate some or all of their elective deferrals as designated Roth […]
Generally, you can contribute to a Roth IRA if you have taxable compensation (defined below) and your 2023 modified AGI is less than: $228,000 for MFJ or Qualifying Widow(er), $153,000 for Single, Head of Household, or MFS and you did not live with your spouse at any time during the year, and $10,000 for MFS […]
A qualified retirement plan is a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity plan. If you made after-tax contributions to your pension or annuity plan, you can exclude part of your payments from your income. Determine the tax-free amount based on when your payments first began. This amount will always be […]
The Simplified Method Worksheet in the TaxAct® program shows the calculation of the taxable amount from entries made in the retirement income section. To view this worksheet in the TaxAct program: Online Navigation Instructions You need to view the worksheet as a print PDF; if you need help, go to our Printing Your Return and […]
Information from Schedule K-1 (Form 1041) Beneficiary’s Share of Income, Deductions, Credits, etc. will only transfer to Schedule E (Form 1040) Supplemental Income and Loss, page 2 when there are amounts to be reported in columns (c) through (f) on Line 33. Per the IRS, the information only needs to be transferred to Part III […]
If your contributions to a Traditional IRA, Roth IRA, or Health Savings Account (HSA) exceed the allowed limit for the year, an additional tax may apply. This tax is calculated and reported on Form 5329. If you need help accessing Form 5329, go to our Form 5329 – Entering in Program FAQ. IRA (Traditional and […]
If you are a member of the U.S. Armed Forces who serves in a combat zone, you may exclude certain pay from your income. You do not actually need to show the exclusion on your tax return because income that qualifies for the exclusion is not included in the wages reported on your Form W-2 […]
If an employer issues two separate Forms W-2: Wage and Tax Statement, and both contain state-specific information from different states, but only one contains federal information, you can combine the two sets of state information when you enter it into TaxAct. Doing so allows you to file the return electronically, and ensures that all state information […]
The TaxAct program supports the entry of 20 Forms 1099-OID Original Issue Discount. Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.
Issuers of Forms 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. use Box 8 to report other information they consider important. The TaxAct program does not transfer an amount entered in Box 8 of Forms 1099-R to anywhere else in the return, since the appropriate tax treatment cannot be determined. Verify […]
If you have a code “U” in Box 7, you will not use code “1” with it. Distributions from a ESOP are not subject to a 10% additional tax. Code “B” is the only code that can be used with code “U.” Code “B” should be used when the account is a designated Roth account. […]
For more information on individual retirement arrangements, go to the IRS Retirement Plans Frequently Asked Questions (FAQs) webpage. Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.
The recipient listed on Form 1099-Q Payments From Qualified Education Programs (Under Sections 529 and 530) should report the distribution on his or her tax return. If the recipient is a family member, the distribution has to be reported on that person’s tax return, not your return. Keep reading to understand when to list a […]
If there is an amount on Line 18 (from the 28% Rate Gain Worksheet) or Line 19 (from the Unrecaptured Section 1250 Gain Worksheet) of Schedule D (Form 1040) Capital Gains and Losses, according to the IRS, the tax is calculated on the Schedule D Tax Worksheet instead of the Qualified Dividends and Capital Gain […]
Go to page 14 of IRS Instructions for Form 4562 Depreciation and Amortization (Including Information on Listed Property), Part VI. Amortization for information for Line 42. Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the […]
For record-keeping purposes, when entering an asset that is completely depreciated, enter the cost basis, prior depreciation, date in service, and the actual life used to depreciate the asset so that no current depreciation will calculate.
Adjusted Cost Basis Calculation Cost basis times business use percentage equals Business portion cost basis Business portion cost basis less Section 179 deduction equals Adjusted cost basis Adjusted cost basis times 30% Special bonus depreciation equals Special bonus depreciation amount Adjusted cost basis less 30% bonus depreciation amount equals Adjusted cost basis to use for […]
Generally, to find the basis for depreciation: Multiply the cost or other basis of the property by the percentage of business/investment use. Subtract any section 179 expense deduction. Subtract any special depreciation allowance (50% and 30%). For more information, go to IRS Instructions for Form 4562 Depreciation and Amortization (Including Information on Listed Property) and […]
Form 4562 Depreciation and Amortization is generated for a business form (i.e. Schedule C (Form 1040) Profit or Loss From Business, Schedule F (Form 1040) Profit or Loss From Farming, etc.) only if an asset is entered for that business (including a vehicle even if only the standard mileage rate deduction is taken for that […]
To determine the classification of property being depreciated, whether it is 3-year property, 5-year property, etc., refer to IRS Instructions for Form 4562 Depreciation and Amortization (Including Information on Listed Property). For further information, you can refer to Appendix B – Table of Class Lives and Recovery Periods on page 97 of IRS Publication 946 […]
The Asset type selected must be either “Car” or “Light Truck/SUV” before you can enter the mileage within the Q&A interview. Generally, this is because owners of “Heavy Truck” (heavy-duty trucks) will use depreciation instead of the standard mileage rate. The standard mileage rate is the same for cars and light trucks/SUVs. Related Links Mileage […]
Select “Other Asset” for the Asset type if you wish to enter an asset with the depreciation having specific criteria not defaulted with any other Asset type selection in the TaxAct® program. This will allow you to select the method, life, and convention of the depreciation as needed in the specific situation. We provide this […]
Form 1099-MISC Box 10 shows gross proceeds paid to an attorney in connection with legal services. These amounts are generally reported on Schedule C (Form 1040). Enter only the taxable portion as income on your return. You need to complete Schedule C before Form 1099-MISC, if you need help completing Schedule C, go to our […]
Information reported to you on Form 1099-DIV and Form 1099-B can be entered in the TaxAct program in the Investment Income section of the Federal Q&A, or directly on the forms where applicable. The Tax Summary screen will indicate if the tax has been computed on the Schedule D Worksheet or the Qualified Dividends and Capital Gain […]
Per IRS Instructions for Form 1040 and 1040-SR, page 23: Rounding Off to Whole Dollars You can round off cents to whole dollars on your return and schedules. If you do round to whole dollars, you must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents […]
Per IRS Instructions for Forms 1099-INT and 1099-OID, on page 4: Box 14. Tax-Exempt and Tax Credit Bond CUSIP No. For single bonds or accounts containing a single bond, enter the CUSIP number of the tax-exempt bond for which tax-exempt interest is reported in box 8 or tax credit bond (including build America bond and […]
Follow the steps below to report exempt interest. If you need help accessing Form 1099-INT, go to our Form 1099-INT – Entering in Program FAQ. To enter only interest that is exempt from State: From within your Form 1099-INT, continue with the interview process until you reach the screen titled Interest Income – 1099-INT Income. Click the data entry […]
The TaxAct® program does not support Form 2555-EZ Foreign Earned Income Exclusion. But, all Foreign Earned Income Exclusion information will be reported on Form 2555 Foreign Earned Income (Part VIII Taxpayers Claiming the Housing Exclusion, Foreign Earned Income Exclusion, or Both), for you to claim the benefits. Note that any link in the information above is […]
A U.S. citizen or resident alien is generally subject to U.S. tax on total worldwide income; however, if you are a U.S. citizen or a resident alien who lives and works abroad, you may qualify to exclude all or part of your foreign earned income. You may wish to refer to IRS Publication 54 Tax […]
When you receive income, the payer will usually have to send you an income statement that shows taxes withheld each year. Depending on the type of income, you will receive a different type of form. Forms that you receive need to be reported on your tax return, and the TaxAct program will ask what forms […]
Lines 26 and 27 of IRS Form 4562 Depreciation and Amortization are for listed assets. Rental real property is not listed property. Property placed in service in the current tax year will appear on Line 19 and any older properties will appear on Line 17. When entering the depreciation information for a rental duplex, of […]
In the TaxAct program, you can use Capital Gain Summary reports to review all of your capital gain transactions during the year. The transactions are organized by short-term and long-term. To review your short-term and/or long-term capital gains/losses summary report: From within your TaxAct return (Online or Desktop), click Review, then click Reports (on smaller […]
You may deduct capital losses up to the amount of your capital gains, plus $3,000 ($1,500 if married filing separately). If part of the loss is still unused, you can carry it forward to later years until it is completely depleted. This “unused loss” includes any amount appearing on Line 7 of IRS Form 1040 […]
To properly report your capital gains and losses on Form 8949 Sales and Other Dispositions of Capital Assets and Schedule D Capital Gains and Losses, you will need to determine your basis (cost) of your shares sold to enter in Purchase price or other basis. Your basis should be maintained in your records. Your plan […]
If you are entering information for the sale of stock you inherited, in the Date Acquired entry field for Form 1099-B Proceeds From Broker and Barter Exchange Transactions, enter the word “Inherited” instead of an actual date (you will still be allowed to e-file your return). The program will then compute the transaction as long […]
Per IRS Publication 551 Basis of Assets, page 9: Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis (defined earlier) to the donor just before it was given to you, its FMV at the time it was given to you, and any […]
Per IRS Instructions for Form 8949, page 5: Stock acquired on various dates. If you sold a block of stock (or similar property) that you acquired through several different purchases, you may report the sale on one row and enter “VARIOUS” in column (b). However, you still must report the short-term gain or (loss) on the sale […]
You need to add expenses of sales and commissions to your original cost basis to calculate the cost or other basis amount. The TaxAct interview process does not ask for these items separately; you need to keep detailed records to complete this entry. To access Form 1099-B and report cost or other basis in the […]
Per the IRS Closing a Business webpage: Closing your business can be a difficult and challenging task. The IRS has resources that can help you navigate this. On this page, you’ll find the steps you’ll need to take to close your business from a federal tax perspective regardless of your business type and information to […]
Business expenses are the costs of carrying on a trade or business, and they are usually deductible if the business is operated to make a profit. While the TaxAct® program does not calculate depletion for Line 12 of Schedule C (Form 1040) Profit or Loss From Business, you can calculate the amount and enter it […]
To export a CSV file from Charles Schwab for import into your TaxAct® return: Go to the Charles Schwab website. Click Log In to log into your account. Click Accounts tab in the upper left corner. When the Accounts tab is displaying, click History submenu item, then click the Realized Gain/Loss tab. Select a date […]
All capital gains (long-term and short-term) are reported on Form 8949 Sales and Other Dispositions of Capital Assets and Schedule D Capital Gains and Losses is used to calculate a net capital gain or loss. If there is a net gain that is all short-term, then the short-term gain will be taxed at the taxpayer’s […]
The at-risk rules place a limit on the amount you can deduct as losses from activities. Generally, any loss from an activity (such as a rental) subject to the at-risk rules is allowed only to the extent of the total amount you have at risk in the activity at the end of the tax year. […]
If an author is self-employed, they would need to complete Schedule C (Form 1040) Profit or Loss From Business, as an advance would be considered income. Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time […]
If someone owes you money you cannot collect, you may have a bad debt. There are two kinds of bad debts: business bad debts and nonbusiness bad debts. A business bad debt is generally one that comes from operating your trade or business. You may be able to deduct business bad debts as an expense […]
You should report income from odd jobs as business income on Schedule C (Form 1040) Profit or Loss From Business. A payer is required to issue you a Form 1099-MISC Miscellaneous Income if you received more than $600 in compensation. Because you are considered a contractor, you may deduct expenses related to this business activity. […]
You may be able to deduct expenses related to the business use of part of your home if you meet specific requirements. Even then, your deduction may be limited. Per IRS Publication 587 Business Use of Your Home (Including Use by Daycare Providers), page 3: Trade or Business Use To qualify under the trade-or-business-use test, […]
While the Foreign Earned Income (FEI) Tax Worksheet is linked to Federal Form 1040 U.S. Individual Income Tax Return, it is only used if the return reports an amount on Form 2555 Foreign Earned Income, Line 45 for the Foreign Earned Income Exclusion. If that information is not present on Form 2555, the tax amount […]
If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and for paying estimated tax are generally the same whether you are in the United States or abroad. Your income, filing status, and age generally determine whether you must file an income tax return. If you […]
Alimony in solido (also referred to as lump sum alimony) is alimony in the nature of a final property settlement award that is not subject to change. It is an award of a definite sum of money to be paid in a lump sum or as installments over a definite period of time to make […]
The Foreign Tax Credit is available if you paid taxes to a foreign country on foreign-source income and are subject to U.S. tax on the same income. This credit is intended to relieve taxpayers of a double tax burden. Generally, you must be a U.S. citizen or resident alien to take the credit. Foreign taxes […]
Per IRS Publication 525 Taxable and Nontaxable Income, page 31: Court awards and damages. To determine if settlement amounts you receive by compromise or judgment must be included in your income, you must consider the item that the settlement replaces. The character of the income as ordinary income or capital gain depends on the nature […]
There are many reasons you could have received a notice regarding your Form(s) W-2 Wage and Tax Statement. The most common reasons are listed below: The form was never entered into the TaxAct® program and the income was not reported elsewhere on the return. Entry error: Example of a transposed number: The number that should […]
Some boxes are not presented on Schedule K-1 because they are used to report various items and they can be treated differently, or they are merely informational and are not relevant to your tax return. Because we cannot determine what the items on these lines represent, we cannot accurately transfer it to the appropriate place […]
The following steps will enable you to enter or review rental property related depreciation information to populate IRS Form 4562 Depreciation and Amortization (Including Information on Listed Property) for Federal Schedule E (Form 1040) Supplemental Income and Loss. To enter or review rental property related depreciation information (if you need help accessing Schedule E, go […]
If you were a self-employed individual working abroad, you would still report your self-employment earnings and expenses on Schedule C (Form 1040) Profit or Loss From Business. To access Schedule C in the TaxAct program, go to our Schedule C – Entering Sole Proprietorship in Program FAQ. If you need to remove the self-employment tax […]
Under section 754, a partnership may elect to adjust the basis of partnership property when property is distributed or when a partnership interest is transferred. Once an election is made under section 754, it applies both to all distributions and to all transfers made during the tax year and in all subsequent tax years unless […]
There are many reasons you could have received a notice regarding your Form 1099-INT Interest Income and/or Form 1099-DIV Dividends and Distributions . The most common reasons are listed below: The form was never entered into the TaxAct® program and the income was not reported elsewhere on the return. (According to the IRS instructions, the […]
There are many reasons you could have received a notice regarding your Form(s) 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.. The most common reasons are listed below: The form was never entered into the TaxAct® program and the income was not reported elsewhere on the return. Entry error: Example […]
Form 1042-S Foreign Person’s U.S. Source Income Subject to Withholding is used to report amounts paid to foreign persons (including persons presumed to be foreign) who are subject to income tax withholding. For an individual taxpayer, Form 1042-S is a document provided to you (and the IRS) by the payer of the income reported. That […]
Some basic rules to know regarding capital gains: A capital gain is the profit realized from holding a security. A short-term capital gain is the profit realized on a security held for one year or less. A long-term capital gain is the profit realized on the sale of a security held for more than one […]
Self-employment income is reported on Schedule C (Form 1040) Profit or Loss From Business, and the TaxAct program will transfer the net profit or loss to Schedule 1 (Form 1040) Additional Income and Adjustments to Income, Line 3. To report self-employment income on Schedule C in the TaxAct program, go to our Schedule C – Entering […]
For information about distribution codes for Form 1099-R, go to the IRS Instructions for Forms 1099-R and 5498 and review Table 1. Guide to Distribution Codes. Then, enter the distribution code in Box 7 when entering the information for Form 1099-R. See the FAQ Form 1099-R – Entering Distributions from Retirement Plans for details. If […]
Report IPERS (Iowa Public Employees Retirement System) in Box 14 as it appears on the Form W-2 Wage and Tax Statement document. IPERS contributions are automatically excluded from taxable wages in Box 1 on Form W-2. There is no additional reporting required. If you need help reporting your Form W-2 in the TaxAct program, go to […]
Code “Q” is nontaxable combat pay. In TaxAct®, this is entered in Box 12 of Form W-2 Wage and Tax Statement. To enter military wages reported on a W-2 (if you need help reporting Form W-2 in the TaxAct program, go to our Form W-2 – Entering in Program FAQ): From within your Form W-2, […]
If you are a foreign national who works in the U.S. but is not subject to Social Security or Medicare taxes due to a treaty with your home country, you may request a refund of your Social Security and Medicare taxes from your employer if it mistakenly withheld these taxes from your wages on Form […]
Mandatory State Disability Insurance (SDI) contributions are mandatory contributions you made to: the Rhode Island Temporary Disability Benefit Fund, the Washington State Supplemental Workmen’s Compensation Fund, or the California Nonoccupational Disability Benefit Fund (CA residents: This amount may be reported to you in Box 14 or Box 19 of your W-2 as “SDI” or “CASDI.”) […]
Per IRS Publication 531 Reporting Tip Income, page 2: All tips you receive are income and are subject to federal income tax. You must include in gross income all tips you receive directly, charged tips paid to you by your employer, and your share of any tips you receive under a tip-splitting or tip-pooling arrangement. […]
To see the depletion field in the Q&A for a rental property, you need to select non-active participant in the TaxAct program. To reach the Rental Income – Depletion screen for Schedule E (if you need help accessing Schedule E, go to our Schedule E – Entering Rental Property in Program FAQ): From within your […]
The following steps will enable you to enter or review business-related depreciation information to populate IRS Form 4562 Depreciation and Amortization (Including Information on Listed Property) for Federal Schedule C (Form 1040) Profit or Loss From Business, in the TaxAct® program. To enter or review business-related depreciation information (if you need help accessing Schedule C, […]
Form W-2 Box 14 Per IRS Instructions for Form W-2, page 9: Instructions for Employee Box 14. Railroad employers use this box to report railroad retirement (RRTA) compensation, Tier 1 tax, Tier 2 tax, Medicare tax, and Additional Medicare Tax. Include tips reported by the employee to the employer in railroad retirement (RRTA) compensation. To report Box […]
Follow the instructions to report the basis of your nonqualified Roth IRA distributions, for Line 19 of Form 8606 Nondeductible IRAs to calculate properly, and for Line 4b of Form 1040 to show the correct amount as taxable. To report basis of nonqualified distributions from Form 1099-R in the TaxAct program (if you need help […]
Employee Stock Option Plan If you have done a same-day sale, all of the income and tax withholdings should be reported on your Form W-2 Wage and Tax Statement. You should not have to report any gain or tax withholdings elsewhere on your return. You will want to verify with your employer that this information […]
All capital gains (long-term and short-term) are reported on Form 8949 Sales and Other Dispositions of Capital Assets, and Schedule D Capital Gains and Losses is used to calculate a net capital gain or loss. If there is a net gain that is all short-term, then the short-term gain will be taxed at the taxpayer’s […]
A second home, or a timeshare, used as a vacation home is a personal use capital asset. A gain on the sale is reportable income, but a loss is NOT deductible. If you receive Form 1099-S Proceeds from Real Estate Transactions for the sale of your vacation home, you need to report it in the TaxAct program on Form […]
If you received a Form 1099-B that should not be taxable, you still need to report it on your return because the IRS also received your Form 1099-B, so they know what you should be reporting. You can enter the same amounts for sales proceeds and cost or other basis, so that your Form 1099-B gets […]
Per IRS Publication 587, Business Use of Your Home (Including Use by Daycare Providers), page 7: Rent. If you rent the home you occupy and meet the requirements for business use of the home, you can deduct part of the rent you pay. To figure your deduction, multiply your rent payments by the percentage of […]
If you receive a Form W-2 Wage and Tax Statement as a Qualified Performing Artist, Fee-Based Government Official, or National Guard/Reserve member at the end of the year, work-related expenses that are deducted from your paychecks (and are actual expenses to you and not reimbursed by your employer or advanced to you by your employer) […]
If you sometimes use your rental property for personal purposes, you must divide your expenses between rental and personal use. Enter the rental expenses on Schedule E (Form 1040), and the personal expenses (which are eligible for itemized deductions) on Schedule A (Form 1040). Entering the days of personal use and days the property is […]
You should receive a Form 1099-INT Interest Income from banks and financial institutions where you earned more than $10 in interest. Even if you did not receive a Form 1099-INT, or if you received $10 or less in interest for the year, you must still report any interest earned and credited to your account during […]
If you redeemed a U.S. Savings Bond this year and reported interest for this bond on previous tax returns, you will need to report the amount in the program that you previously reported. The amount reported as income on prior year return(s) will then be subtracted from Schedule B (Form 1040) before transferring to the […]
If you receive income from charitable gift annuities reported on Form 1099-R, the amount reflected in Box 3 will report the capital gains that are already included in the taxable amount reported in Box 2a of the form. The following instructions will ensure the capital gains amount is taxed at the lower rate it is […]
Some types of income you receive are not taxable. When you total your gross income to determine whether you are required to file a tax return, do not include your nontaxable income. Keep records of your nontaxable income. Some types of income that generally are not taxable include: Child support payments Welfare benefits Life insurance […]
You need to report your Form 1099-DIV ordinary and qualified dividends in the TaxAct program for the information to transfer to your Form 1040. To report your Form 1099-DIV and enter your ordinary and qualified dividends (if you need help reporting your Form 1099-DIV, go to our Form 1099-DIV – Entering Dividend Income in Program […]
If you receive a dividend income report without a payer’s identification number, enter the information in the TaxAct program as though you received a Form 1099-DIV Dividends and Distributions, but leave the Payer’s Federal Identification Number (FEIN) blank. This number is not required and the return will e-file without the number. The information required by […]
You can report Form 1099-SA Distributions From an HSA, Archer MSA, or Medicare Advantage MSA two different ways in the TaxAct program depending on where the distribution is from. To report or edit distributions from an HSA, go to our Form 1099-SA – Distributions from an HSA FAQ. To report or edit distributions from an Archer MSA […]
Although it is possible to prepare a preliminary tax return based on your final pay stub for the year, your pay stub is not the official IRS-recognized document for your income. Taxpayers should not use their final pay stub, a similar substitute form, Form 4852, or Form 1099-R to file their income tax return prior to the receipt […]
View your filing status below to see the applicable HSA contribution limits. Overall Limits for Married Filing Joint or Married Filing Separate (Age as of the end of the 2023 calendar year) Coverage* Both Under 55 Taxpayer under 55 and Spouse 55 or over Taxpayer 55 or over and Spouse under 55 Both 55 or over […]
Form W-2C Corrected Wage and Tax Statement is issued by an employer if they discover they made a mistake on Form W-2. In TaxAct, you enter your wage information the same way whether you receive Form W-2 or Form W-2C. If you need help reporting the corrected W-2, read our article Form W-2 – Entering in Program. If […]
Wondering what’s changed in the tax world from last year? We put together the top six 2022 federal tax changes that taxpayers like you should know about before filing your income tax return in 2023. Tax year 2021 saw major tax changes due to the coronavirus pandemic, but many of those changes went away in […]
Your basis is generally the cost of the investment less any prior nondividend distributions received. Once you enter the basis in TaxAct, the program will determine if there is a gain to report and it will report it on Form 8949 Sales and Other Dispositions of Capital Assets. The most common kinds of distributions are: […]
“Active Participation” and “Passive (Material Participation)” are two separate classifications. Per IRS Publication 925 Passive Activity and At-Risk Rules, page 3: There are two kinds of passive activities. Trade or business activities in which you don’t materially participate during the year Rental activities, even if you do materially participate in them, unless you’re a real estate professional. […]
If you received Form 1099-C Cancellation of Debt and are eligible to exclude a canceled debt from your income because of any of the following, file Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) with your return. Note: If you didn’t receive a Form 1099-C from the lender, you probably don’t have canceled debt […]
Code “P” indicates that the taxpayer contributed more than allowed to a 401k, IRA, etc. through payroll withholding. Excess contributions must be included as income for the year in which the contributions were made. If the excess contributions haven’t already been claimed in that year, the return will need to be amended to include the […]
During the filing steps, you will be asked how you want to receive your refund. To add your tax refund to your Fidelity account: Choose Fidelity or other bank account when you reach the How do you want your federal refund? screen and then click Continue. Choose your account from the dropdown menu and then […]
Financial institutions with which you do business are required to send you a Form 1099-INT: Interest Income if you earned from them more than $10 of interest over the year. Even if you haven’t received a Form 1099-INT, or if you’ve earned interest of $10 or less over the year, you’ll still need to report […]
On December 22, 2017, Congress passed a tax provision that changed reporting requirements for Section 965 of the tax code. For 2017, TaxAct will not be supporting the Section 965 reporting requirements. We will build them into our 2018 products. If you need to attach a statement for Section 965 reporting, the return will need […]
To import Forms 1099 from your Fidelity account, locate your Fidelity username and your Fidelity password. If you don’t have them, contact Fidelity directly for assistance at 1-800-FIDELITY (800-343-3548). To import your Fidelity investments into TaxAct: Click Federal. Click Step-by-Step Guidance in the Federal Quick Q&A Topics menu Check the applicable boxes on the Let’s […]
A bad debt occurs when someone owes you money and your efforts to get paid have failed. This is a term used a lot in business, but you can recoup some of a personal (nonbusiness) loss by claiming the bad debt on your tax return. For tax purposes, this is treated as a short-term capital […]
The original conversion from a Traditional IRA to a Roth IRA must be completed within 60 days after the end of the tax year. A distribution from an IRA is taxable in the year of distribution unless it is rolled over (or converted to a Roth IRA) within 60 days. The distribution from the IRA […]
To qualify for the Section 179 deduction, your property must have been acquired for use in your trade or business. Property acquired only for the production of income, such as investment property or rental property (if renting property is not your trade or business), and property that produces royalties do not qualify. Special qualified properties […]
TaxAct supports Schedule C-EZ. Although a taxpayer may be eligible to use Federal Schedule C-EZ, it is never required. The IRS instructions for Schedule C-EZ, Net Profit From Business, indicate you may use Schedule C-EZ instead of Schedule C only if you meet all of the following qualifications: Had business expenses of $5,000 or less, Use the cash method […]
In certain situations a statement must be attached to your return explaining the retirement distribution. You can attach this statement in the TaxAct® program and the return will still be eligible for electronic filing. From within your TaxAct return (Online or Desktop), click on the Federal tab. On smaller devices, click the menu icon in the upper […]
The IRS has a Business Rule, or rejection code, that will reject a return with wages in Box 16 of Form W-2: Wage and Tax Statement, if either the state abbreviation or state ID field contains incorrect data. This error often appears if you’ve entered only one or more zeroes into either of these fields. TaxAct does not recognize […]
For instructions on exporting or downloading a CSV file from a specific broker, click the appropriate link below: Charles Schwab TradeKing Fidelity Scottrade E*TRADE For instructions on importing your stock information into the TaxAct program, click the appropriate link below: OptionsXpress TD Ameritrade Capital One Investing Related Links CSV Import CSV Import with Wash Sales […]
If your dependent receives a Form W-2, you cannot report it on your tax return. If your dependent is required to file taxes, they’ll need to report the Form W-2 on their own tax return. If you don’t know if your dependent needs to file a tax return, consult the IRS’s Do I Need to File a […]
A Flexible Spending Account (FSA) allows employees to be reimbursed for medical or dependent care benefits from an account they set up with pretax dollars. Salary-reduction contributions to an FSA aren’t included in taxable wages reported on Form W-2 Wage and Tax Statement, and are not eligible as tax deductions. Under a typical FSA, you […]
Investors who sold stocks, bonds, options, or other securities will have to prepare Form 8949 Sales and Other Dispositions of Capital Assets and Schedule D (Form 1040) Capital Gains and Losses for capital gains and losses, and file them along with Form 1040 U.S. Individual Income Tax Return. In the TaxAct program, you need to […]
TradeKing To export a CSV file from TradeKing for import into your TaxAct® return, follow these steps: Go to the Trade King website Login to your account When logged into your account, click the G&L Real tab When the G&L Real tab is open, click the Export to Excel link Save the .CSV file to […]
Scottrade To export a CSV file from Scottrade for import into your TaxAct® return, follow these steps: Go to the Scottrade website Log in to your account Click on the My Account tab Click on the Gain/Loss & Tax Center link on the left Click on the Gain/Loss Reports tab On the drop down from […]
E*TRADE To export a CSV file from E*TRADE for import into your TaxAct® return: Go to the E*TRADE website and log in to your account Select the Tax & Account Records menu item under the Accounts menu Click the Tax Documents link You should now be on the Tax Records tab. Click Export Your [year here] Trades to […]
Form 3922 Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c) is for informational purposes only and isn’t entered into your return. Keep the form for your records because you’ll need the information when you sell, assign, or transfer the stock. When you dispose of the stock, you’ll receive Form 1099-B […]
OptionsXpress OptionsXpress users can purchase a discount GainsKeeper retail product through their OptionsXpress accounts. The information in your OptionsXpress account is then linked to this GainsKeeper account. If you purchased a GainsKeeper product through your OptionsXpress account, see the GainsKeeper information section below. Otherwise, see the steps below to export a CSV file from OptionsXpress […]
You will need to know your Capital One Investing account number and your document ID. Your document ID will be located on your Capital One Investing statement or Form 1099-B statement. If you do not know your document ID, you will need to contact your Capital One Investing representative to obtain this information. To import […]
The way you report the income from your Schedule K-1 on your Federal Form 1040 U.S. Individual Income Tax Return return depends on the type of K-1 received. There are three types of K-1s that this applies to: Schedule K-1 (Form 1065) Partner’s Share of Income, Credits, Deductions, etc. To enter Schedule K-1 for Form […]
If the taxpayer has rolled over all or a portion of a distribution from a retirement account to another retirement account, the word “ROLLOVER” will print on Form 1040 U.S. Individual Income Tax Return. If the distribution is from an IRA: The text “ROLLOVER” will print in the left-hand margin by Line 4a. The total […]
Employees and sole proprietors filing Schedule C (Form 1040) Profit or Loss From Business can use either the standard mileage method or actual auto expenses. Corporate and partnership employers can’t use the standard mileage method to compute the auto expense for company-owned cars. Actual auto expenses are deducted at the partnership level. However, employers can […]
If you state that all your tax-exempt interest is accrued tax-exempt interest, you are essentially saying that none of the interest is attributable to you. When you buy a bond between interest payment dates, there is interest that has accrued since the last interest payment date. The price you pay for the bond will include […]
Per IRS Publication 525 Taxable and Nontaxable Income, page 23: Life Insurance Proceeds Life insurance proceeds paid to you because of the death of the insured person aren’t taxable unless the policy was turned over to you for a price. This is true even if the proceeds were paid under an accident or health insurance […]
A standard Form W-2 has boxes numbered 1 through 20. U.S. Postal Workers receive Forms W-2 with boxes numbered 1 through 42. Generally, information in boxes 21 through 42 is not needed for the calculation of income tax. An exception to this may be if you have an amount listed for Employee Business Expense on […]
Form 1099-MISC (Box 7) Non-Employee Compensation (Video)
Cancelled Debts & Foreclosures (Video)
To make an entry of a Partial Wash Sale in the TaxACT program you must create two separate Forms 1099-B in the program. First you would determine the amount of the total loss and also how much of that loss should be allowed to be deducted and how much should be treated as a wash […]
Some types of income you receive are not taxable. When you total your gross income to determine whether you are required to file a tax return, do not include your nontaxable income. Keep records of your nontaxable income. Examples of some types of income that generally are not taxable include: -Child support payments -Welfare benefits […]
Beginning with 2009 federal tax returns, Schedule 1 (Form 1040A) Interest and Ordinary Dividends for Form 1040A Filers is obsolete. The amounts previously reported on that schedule are now reported on Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends. Schedule B will print if, based on your entries, the IRS requires its inclusion in […]
An amount up to $25,000 shall be exempt from Alabama state income tax if received as severance, unemployment compensation, or termination pay, or as income from a supplemental income plan, or both, by an employee who, as a result of administrative downsizing, is terminated, laid-off, fired, or displaced from his or her employment. If the exempt […]
CUSIP stands for Committee on Uniform Securities Identification Procedures. A CUSIP number identifies most securities, including stocks of all registered U.S. and Canadian companies, and U.S. government and municipal bonds.
Once the vacation home limitation applies for a property, it will always apply to the property. If you imported your return from last year and the vacation home limitation applied on that return, the information would have been imported to this year’s return. If you do not want your expenses limited by the vacation home […]
Normally, the ordinary income is included in the employee’s W-2. If there are any capital gains to report or if you received a Form 1099-B, you would need to complete Federal Form 1099-B in the program to report the information on Schedule D on your return. If this is the case, the information would be […]
