Updated Guidance from Virginia – May 28, 2026 The Virginia Department of Taxation issued updated guidance on May 28, 2026, regarding Virginia’s conformity to the 2025 federal new tax bill. For taxpayers subject to Virginia’s Limited Itemized Deduction computation and those claiming the general sales tax deduction on Line 5a of Virginia Schedule A, the […]
Why am I being prompted to attach an appraisal document? The IRS groups similar donated items together when determining whether the qualified appraisal requirement applies. This applies even if the items were donated to different charities. For example, if your total claimed deduction for clothing donated during the year is $6,000, the clothing is treated […]
What are noncash charitable contributions? A noncash charitable contribution is a donation you give to a qualified charity that is not money. Instead, it is usually an item, property, or another type of asset. Common examples include: Clothing Furniture and household items Electronics and appliances Cars, boats, or other vehicles Stocks, bonds, or other securities […]
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’s VITA offer is valid in the following states: Alabama Arkansas Arizona California Colorado Connecticut Delaware District of Columbia Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maryland Massachusetts Michigan Minnesota Missouri Mississippi Montana Nebraska Nevada New Jersey New Hampshire New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island […]
The New York City Department of Finance (NYC DoF) has made changes to the calculation of Form NYC-1127 related to certain school tax credits. Form NYC-1127 filers are no longer permitted to claim the following credits on Schedule B: Line A1 – NYC School Tax Credit (fixed amount) Line A2 – NYC School Tax Credit […]
The TaxAct website includes a Notice Review service. Notice Review can help you understand what type of IRS notice you have received and why. More importantly, it will provide information to help you understand the notice and the steps you need to take to resolve the situation with the IRS. For more information, go to […]
Go to our Access Prior Year Tax Returns webpage for a list of available Online and Desktop programs for previous years. Note: TaxAct does not provide archived copies of returns filed through the TaxAct Desktop or TaxAct Professional Editions. If you no longer have access to your saved return file, you can receive a copy […]
Important The information below was based on the state of legislation and the DOR information letter dated January 30, 2026 . March 18, 2026 Update: Additional legislation has been introduced in the South Carolina legislature. This legislation has not been enacted and remains subject to change. We are actively monitoring the situation. If legislation is […]
You cannot use the current-year TaxAct program to file a return for a different tax year. Texas labels its franchise tax forms by the year the report is filed, not the year being reported. For example, 2025 taxes are filed in 2026, so Texas labels those forms for 2026. TaxAct programs are labeled differently. The […]
TaxAct automatically transfers information about retirement benefits from the federal return to the Michigan return, however, the program cannot determine if a retirement or pension benefit qualifies to be a subtraction on the Michigan return. You must enter the amount that qualifies for the subtraction, along with any other information that applies. To enter or […]
If this is your first time filing a tax return, there are a few things you should keep in mind: Talk to your parents. Even if you have earned income, your parents may still be able to claim you as a dependent. Depending on your circumstances, you may need to decide whether they will claim […]
Idaho recently enacted legislation updating how the state conforms to federal tax law under the new tax bill. These changes are retroactive to January 1, 2025, and may affect your Idaho income tax return. Because Idaho adopted most of the federal changes made by the new tax bill: Certain new federal deductions may now also […]
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 […]
The DC EITC is equal to 100% of the federal EIC (for 2025). See the District of Columbia Earned Income Tax Credit (EITC) webpage for details.
North Carolina conforms to the federal tax law as it existed on January 1, 2023. Federal tax law changes passed July 4, 2025, do not apply when calculating North Carolina income tax. As a result, you may need to add back or adjust the AGI amount that is carried from the federal return to the […]
California has three identifying numbers for business returns: The California Corporation Number (CCN) is an eight-digit number beginning with the letter “C.” In TaxAct, enter the seven digits after the letter “C.” The Secretary of State (SOS) file number is a minimum of 7 digits long, a maximum of 12 digits long, and can only […]
Oregon taxpayers are eligible for a tax credit for contributions made to an Oregon College Savings Plan account and/or to an ABLE account. The credit limit is calculated for each account type and varies depending on the tax year. To qualify for these credits, you must make the contributions by April 15 of the filing […]
What to Know What is a Trump Account? A Trump Account is a federal savings account for a child under 18. You set it up by making an election on your federal tax return. The account is administered by the U.S. Treasury. What is the $1,000 government deposit? Some children may qualify for a one-time […]
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 Oregon Kids Credit is a refundable credit for eligible Oregon taxpayers with qualifying children. The credit is automatically calculated based on the other entries made in the return. You can review the Oregon Kids Credit calculation by going to State > Oregon > Credits and clicking Review beside Oregon Kids Credit. The Oregon Kids […]
The IRS standard mileage rates for 2025 are: 70 cents per mile driven for business use 21 cents per mile driven for medical or military moving 14 cents per mile driven in service of charitable organizations See the IRS website for more information and prior year amounts. NOTE Taxpayers cannot claim a miscellaneous itemized deduction for […]
The IRS’s standard mileage rate allowed for operating expenses for a car when you use it for medical reasons is 21 cents per mile for 2024 and 2025. Related Links Mileage – Standard Mileage Rates Publication 17
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 […]
When determining eligibility for the Earned Income Credit (EIC), not all income is treated the same. Only certain types of pay from working are considered “earned income.” Many common payments and benefits are excluded and should not be counted when calculating earned income for the credit. For full details and examples, see IRS Publication 596. […]
TaxAct® has developed a worksheet to assist you with the preparation of the Free Application for Federal Student Aid (FAFSA) online application. Based on the information entered into TaxAct (and the additional information entered in the FAFSA section) the FAFSA Tax Summary Worksheet will provide you with the applicable income tax information needed for you to […]
To allow families in need of financial aid to complete their FAFSA sooner, the financial information from the previous year’s return is used. Students and their families will use their financial information from the prior year tax return to complete the FAFSA. In TaxAct, if you import your prior year return to your current return, […]
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 […]
You have several options for paying the tax due on your state tax return. The available options are presented during the Q&A and shown in the filing instructions. It is essential to carefully review and print your filing instructions as prompted and to check the status of your return. Payment options vary by state – […]
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 […]
The United States income tax is a pay-as-you-go tax, which means that tax must be paid as you earn or receive your income during the year. You can either do this through withholding or by making estimated tax payments. If you do not pay enough tax, you may have to pay a penalty for underpayment […]
Certain state and local taxes may be deductible if you itemize your deductions on Schedule A (Form 1040). Deductible taxes generally include state and local personal property taxes that are based on the value of the property and charged on a yearly basis, such as some vehicle registration fees. Fees that are not based on […]
You must determine how much of your auto registration or license fees is deductible. Only the portion of the fee that is based on the value of the vehicle qualifies. Fees based on weight, model, year, or horsepower are not deductible. Qualifying auto registration fees are deductible as personal property taxes and are reported on […]
If your employer offers a tax-deferred retirement plan, such as a traditional 401(k) or 403(b), contributions you make to the plan are generally pre-tax and are not included in your taxable wages. Because these contributions are already excluded from income, they are not deductible on your tax return. You may still be able to make […]
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 […]
To report your state and/or local income taxes paid (NOT withholding or estimated tax payments), follow the steps below. The TaxAct program will transfer this information, and state taxes withheld on Form W-2, to Schedule A (Form 1040) Itemized Deductions, Line 5. Online Dashboard From within your TaxAct return, click Deductions & Credits. On smaller […]
If you are not seeing code “106” (long-term premiums) as a selection in the Virginia program, it is likely because first the long-term premiums must be entered in the Federal program, under Itemized Deductions (not to be calculated and taken on the Federal return, only to let code “106” appear on the Virginia return). Once […]
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 […]
To claim personal property taxes paid in the TaxAct program, follow the steps below. Online Dashboard From within your TaxAct return, click Deductions & Credits. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Estimates & Other Taxes Paid drop-down. Click Add beside Deductible Taxes […]
TaxAct has a tool to compare how Married Filing Jointly vs. Married Filing Separate will benefit you so you can choose how to file (add a state to your return, and the federal information will flow there so you can see how your state tax laws affect your return too). To view the Joint Vs. […]
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 […]
Active duty military who are moving due to a military-ordered permanent change of station (PCS) can use Form 3903 to calculate any deductible moving expenses. The expenses are calculated on Form 3903, Moving Expenses, and reported as an adjustment on Schedule 1 (Form 1040), Additional Income and Adjustments to Income, Line 14. See the IRS […]
There are two different forms relating to injured/innocent spouses, Form 8379, Injured Spouse Allocation and Form 8857 Request for Innocent Spouse Relief. See Publication 971 for details. The TaxAct program does not support Form 8857, Request for Innocent Spouse Relief. To complete Form 8379, Injured Spouse Allocation, follow the steps below. Online Dashboard From within […]
The Internal Revenue Code only allows income averaging to farmers and fishermen. If you are a farmer or fisherman, you need to complete Schedule J, Income Averaging for Farmers and Fishermen, using the steps below. Online Dashboard From within your TaxAct return, click Resources. On smaller devices, click the menu at the top left corner […]
Estimated tax payments are periodic prepayments made to the IRS and state tax agencies to cover income not subject to withholding. This includes income from self-employment, interest, dividends, rental income, capital gains, and other earnings. TaxAct provides tools to help calculate, schedule, and manage these payments efficiently. Individual Estimated Tax Payments are calculated and paid […]
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 […]
If you have church income (NOT including clergy, minister, or missionary wages), reported on a Form W-2 Wage and Tax Statement that are subject to self-employment taxes, but no FICA (Social Security and Medicare) taxes were withheld, you may need use the steps in the FAQ Schedule SE – Adjustments. Schedule SE (Form 1040) will […]
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 can set up monthly electronic funds withdrawals for your installment request when you enter your information for Form 9465 Installment Agreement Request. Filing Form 9465 does not guarantee your request for a payment plan. The IRS will contact you to approve or deny your installment plan request. To enter Form 9465, follow the steps […]
Use Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, to figure the amount of your Net Investment Income Tax (NIIT). To access Form 8960 in the TaxAct program, follow the steps below. Online Dashboard From within your TaxAct return, click Taxes & Miscellaneous. On smaller devices, click the menu at the top left corner […]
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 […]
The Form 8910 – Alternative Motor Vehicle Credit expired for vehicles purchased after 2021.
If you were a full-time student, and reported that in the TaxAct program, you can’t attach Form 8880 to Schedule 3 (Form 1040) to receive the retirement savings contributions credit on line 4. If you were not a full-time student, and you need to edit that information in the TaxAct program, follow the steps below. Form […]
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, […]
IRS Form 8862, Information To Claim Certain Refundable Credits After Disallowance, is used if your earned income credit (EIC) was reduced or disallowed in a previous year and you would like to claim the EIC on your current return. If you were previously disallowed from taking the EIC, claiming the credit this year will result […]
Certain food and beverage establishments can use Form 8846, Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips, to claim a credit for social security and Medicare taxes paid on employee’s tips. This credit is part of the general business credit and is reported on Form 3800, General Business Credit. Instructions […]
Use Form 8839, Qualified Adoption Expenses to figure the amount of your adoption credit and any employer-provided adoption benefits you can exclude from your income. You can claim both the credit and the exclusion for expenses of adopting an eligible child. To enter information for the adoption credit (Form 8839) in the TaxAct program, follow […]
IRS Form 8832, Entity Classification Election is completed to reflect how the entity has elected to be treated for federal tax purposes. If you are not certain of your business entity classification, you may need to call the IRS Business & Specialty Tax Line at 1-800-829-4933 to verify how you should file your business tax […]
What’s new in 2025: From 2025 through 2028, there’s a new deduction of $6,000 per person age 65 or older. You can still claim this on top of the regular senior standard deduction. That’s up to $12,000, if both spouses qualify on a joint return. You can claim this deduction whether you take the standard deduction or itemize. You can claim this […]
To enter information for Form 5695 in the TaxAct program, follow the steps below. Online Dashboard From within your TaxAct return, click Deduction & Credits. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Your Home drop-down. Click Add beside Home Energy Credits. Complete the […]
ENERGY STAR is a joint program of the EPA and the DOE that provides information on certified energy-efficient products. For federal tax credit rules, see IRS Form 5695 Information. The Inflation Reduction Act of 2022 updated and extended residential energy credits: Residential Clean Energy Credit (Form 5695, Part I) is available through 2034. Energy Efficient […]
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 […]
According to IRS Publication 503, child and dependent care expenses must be work-related to qualify for the Child and Dependent Care Credit. Work-related expenses are those that enable you to work or look for work. If you are married, both spouses generally must be working or seeking employment unless one spouse is a full-time student […]
On your IRS Form 2441: Child and Dependent Care Expenses, the amount listed as “paid to providers” must equal the amount entered as qualified expenses for your dependent(s) plus any dependent care benefits provided by the employer. The amount in the Amount paid in 20YY field must equal your qualified child and dependent care expenses plus […]
To complete Form 2441, follow the steps below. At the end of the entry process: If the credit is not allowed, a reason is shown. If the credit is allowed, the amount will be displayed. The credit carries to Form 2441 and Form 1040, Schedule 3. Online Dashboard From within your TaxAct return, click Deductions […]
The checkbox at the top of Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, must be selected if you would like the IRS to compute any applicable penalty and send you a bill. To check the box Check here if you would like the IRS to compute any applicable penalty and send […]
In order to complete Schedule AI, you first need to complete the Underpayment Penalty section, which transfers automatically to Part II of Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts. This will determine whether you need to attach Schedule AI. To access the Underpayment Penalty entries, follow the steps below. Online Dashboard […]
See Form 2106 – Entering Unreimbursed Employee Expenses in Program.
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 […]
To access Form 1310 in the TaxAct program, follow the steps below. Online Dashboard From within your TaxAct return, click Taxes & Miscellaneous. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Other Tax Forms drop-down. Click Add beside Claim a Refund For a Deceased […]
See Form 1045 – Schedule A-NOL (Current Year NOL) (CARRYFORWARD) for information.
If a return has generated a Net Operating Loss (NOL) in the current year, there will be a Green Alert in the return titled Green Alert – Net Operating Loss. The NOL amount will be reflected on Line 25 in Schedule A – NOL of Form 1045, Application for Tentative Refund. Instructions to review/modify the […]
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 […]
Taxpayers must file Schedule H with their Form 1040 when they have household employees and meet certain IRS wage or withholding thresholds. A household employee is someone you hire to perform work in or around your home and you control what work is done and how it is done. This generally includes workers such as […]
You can report volunteer expenses as cash charitable contributions in the TaxAct program, and the program will transfer the amounts to Schedule A (Form 1040) Itemized Deductions. See IRS Publication 526 for details on what items can be deducted. Go to the FAQ Charitable – Entering Contributions and Donations in Program for details on entering […]
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 […]
Most state and local governments charge an annual tax on the value of real property that you own. Any of these real estate taxes (also called property taxes) on your primary or secondary residence are generally deductible on your return. The amount of real estate taxes paid may be reported to you on Form 1098, […]
IRS Notice CP-48 is sent to inform a taxpayer that their Individual Taxpayer Identification Number (ITIN) must be renewed. ITINs now expire when they have not been used on at least one federal tax return for three consecutive tax years. Once an ITIN expires, it must be renewed before it can be used on a […]
2024 was the last year to file Form 5405. See First-Time Homebuyer / Home Owner Credit for details about prior year data entry. Note: If the credit was originally claimed on a joint return, each spouse was treated as having been allowed half of the credit for purposes of repaying the credit. Thus, two […]
TaxAct will automatically use whichever deduction gives you the greater benefit—your New York standard deduction or your New York itemized deduction. Because New York does not follow federal itemized deduction rules, the amount you can itemize on your New York return is different from your federal Schedule A total. Your New York itemized deduction is […]
To enter your qualifying mortgage insurance premiums as an Itemized Deduction, follow the steps below. Online Dashboard From within your TaxAct return, click Deductions & Credits. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Your Home drop-down. Click Add beside Mortgage Interest & Refinancing. […]
Before you claim a deduction, you can go to IRS Publication 529, Miscellaneous Deductions, to see if you’re eligible to claim it. To claim a deduction in the TaxAct program, 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 […]
To enter or review information from Form SSA-1099, including Medicare Parts B and D premiums, go to our Form SSA-1099 FAQ. To enter Medicare Parts B and D premiums not reported on Form SSA-1099, follow the steps in Medical and Dental Expenses.
To enter your medical and dental expenses in the TaxAct program, follow the steps below. Online Dashboard From within your TaxAct return, click Deductions & Credits. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Medical drop-down. Click Add beside Medical Expenses. Complete the rest […]
If a taxpayer or spouse has passed away, you need to enter the date of death of the taxpayer or spouse in the Federal section of the program. See Entering in Program – Name, SSN, and Date of Birth for details. This information will then be carried to Massachusetts the return. When you print your […]
If you don’t know whether you need to use the itemized or standard deduction and you are married filing separate, review the information in the Married Filing Separate – Itemized or Standard Deduction FAQ. If you accidentally indicated in the TaxAct program that your spouse itemized deductions, follow the steps in the article listed above, […]
Per IRS Publication 504, if one spouse itemizes deductions on a Married Filing Separately return, the other spouse cannot claim the standard deduction.To indicate that your spouse filed MFS and itemized deductions on their return, follow the steps below. Online Dashboards From within your TaxAct return, click About. On smaller devices, click the menu at […]
Per IRS Publication 504, if one spouse itemizes deductions on a Married Filing Separately return, the other spouse cannot claim the standard deduction.To indicate that your spouse filed MFS and itemized deductions on their return, follow the steps below. Online Dashboards From within your TaxAct return, click About. On smaller devices, click the menu at […]
TaxAct will use the higher of your itemized deductions or the standard deduction for your filing status to maximize your tax benefit. To manually select a deduction method in the TaxAct program, follow the steps below. Online Dashboard From within your TaxAct return, click Resources. On smaller devices, click the menu at the top left […]
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. You may be able to deduct expenses from that income. See IRS Publication 525 for details. To report this in the TaxAct program, follow the steps in Deducting unlawful […]
IRS Publication 555 explains how income and deductions must be reported when individuals live in a community property state. If spouses or registered domestic partners (RDPs) file separate federal returns, they may be required to report: One-half of their combined community income and deductions, and All of their own separate income and deductions. Community property […]
The California Voluntary Plan for Disability Insurance (VPDI) is not deductible on the federal tax return. Under IRS Rev. Rul. 81-194, VPDI withholdings are treated as personal expenses and cannot be claimed as an itemized deduction on Schedule A. When you enter VPDI amounts from your Form W-2, box 14 in TaxAct, the information is […]
Employer contributions to a Health Savings Account (HSA) are reported on Form W-2, Box 12, using Code W. Because California does not follow federal HSA rules, these employer contributions must be added back to your California income. When you enter your W-2 in TaxAct, the amount reported with Code W flows to Schedule CA (540), […]
If a dependent was not claimed on the federal return, but should be shown on the AZ return, you will start by adding the person in the Dependents section of the federal return, however, you will need to mark them as Not a dependent this year when selecting the Dependent Type. See the Dependents – Entering Information […]
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 […]
As a self-employed individual, if you made contributions to a retirement plan such as a SEP, SIMPLE, or Keogh plan, you may be able to claim a deduction on your tax return for those contributions. The TaxAct program offers the Publication 560 Worksheet for qualified self-employed individuals to calculate their maximum deductible contribution limit. At the […]
You must pay SE tax and file Schedule SE (Form 1040), Self-Employment Tax, if either of the following applies: Your net earnings from self-employment (excluding church employee income) were $400 or more. You had church employee income of $108.28 or more. NOTE: The SE tax rules apply no matter how old you are and even if […]
Self-employed individuals may be able to deduct the cost of their health insurance premiums—including medical, dental, and qualified long-term care coverage—for themselves, their spouse, and dependents. This deduction is taken above the line on Form 1040, which means you can claim it even if you don’t itemize. To qualify, the insurance policy must be established […]
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). […]
See the Form 1099-Q – Payments from Qualified Education Programs FAQ for details.
To enter or review an adjustment on Schedule SE (Form 1040) (example: if some of your self-employment income is exempt from self-employment tax), follow the steps below. Online Dashboard From within your TaxAct return, click Taxes & Miscellaneous. On smaller devices, click the menu at the top left corner of your screen, then make your […]
To report that you or your spouse have an IRS approved Form 4361 in the TaxAct program, follow the steps below. Online Dashboard From within your TaxAct return, click Taxes & Miscellaneous. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Additional Tax Payments drop-down. […]
The Self-Employment Tax Adjustment Worksheet shows the adjustments used in the calculation of Line 2 on Federal Schedule SE, Self-Employment Tax. To access the Schedule SE – Adjustments – Clergy Worksheets in the TaxAct program, follow the steps below. Online Dashboard From within your TaxAct return, click Taxes & Miscellaneous. On smaller devices, click the […]
Exempt Wages Clergy, minister, or missionary wages reported on Form W-2 are subject to self-employment taxes, but no Social Security and Medicare taxes are withheld. While entering your Form W-2, you will see a screen that says W2: Tell us if any of these situations apply. Here you can select Income earned as a minister […]
2024 was the last year to file Form 5405 and the lookup tool is no longer available. The following applies to 2024 and prior only. 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, […]
If you’ve spent money on attorney fees or court costs related to a claim of unlawful discrimination, you may be able to claim a deduction for those expenses on the tax return that you file with TaxAct. Before starting, consult Publication 525 to determine if you can claim a deduction of this type. If you […]
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 […]
To enter Sales Tax in the TaxAct program, follow the steps below. NOTE: You can deduct either the sales tax deduction or the state income tax deduction – if you want to override the system default, see Sales Tax – Elect General Sales Tax Deduction or State Income Tax Deduction. Online Dashboard From within your […]
If you want to elect to take the sales tax deduction or the state income tax deduction (even though one of them is a greater amount), 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 […]
You can elect to deduct state and local GENERAL SALES TAXES instead of state and local INCOME TAXES as an itemized deduction on Schedule A (Form 1040) Itemized Deductions. You cannot deduct both. To figure your state and local general sales tax deduction, you can use either your actual expenses or the state sales tax […]
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 & […]
Form 5498-SA HSA, Archer MSA, or Medicare Advantage MSA Information, reports contributions to one of the following: Archer MSA Generally, contributions you make to your Archer MSA are deductible. Employer contributions are excluded from your income and are not deductible by you. If your employer contributes to one of your Archer MSAs, you cannot contribute […]
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 […]
An HSA or Archer MSA distribution isn’t taxable if you used it to pay qualified medical expenses of the account holder or eligible family member or you rolled it over. An HSA may be rolled over to another HSA; an Archer MSA may be rolled over to another Archer MSA or an HSA. An MA […]
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 […]
See Calculating and Paying Quarterly Estimated Taxes.
See Calculating and Paying Quarterly Estimated Taxes.
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 […]
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 […]
When there is an amount in Box 4 and/or Box 6 of the Form 1098-T, Tuition Statement, and you claimed an education credit in a prior tax year (i.e., American Opportunity Credit or Lifetime Learning Credit), you need to recalculate that credit, taking into account the adjustment, and then enter the decrease in credit on the […]
Student loan interest will be reported to you on Form 1098-E, Student Loan Interest Statement. When you report this in the TaxAct program, the information is transferred to Schedule 1 (Form 1040). Follow the steps below to enter information from Form 1098-E. Online Dashboard From within your TaxAct return, click Deductions & Credits. On smaller […]
Follow the steps below to enter information from Form 1098-C in TaxAct. See the IRS Instructions for Form 1098-C for details about claiming the contribution deduction. Online Dashboard From within your TaxAct return, click Deductions & Credits. On smaller devices, click the menu at the top left corner of your screen, then make your selection. […]
You may need to enter points not reported to you on Form 1098, Mortgage Interest Statement, to determine if they are fully deductible in the current year or if you must deduct them over the life of the loan. See IRS Publication 936 and IRS Topic No. 504 Home Mortgage Points for details. To enter points […]
When you enter Form 1098 (Mortgage Interest Statement) in TaxAct, the information flows to the Itemized Deductions section and, if you itemize, appears on Schedule A of your federal return. TaxAct compares your itemized deductions to the standard deduction and uses whichever provides the greater benefit. Mortgage interest is deductible only when the loan is […]
Whether your child was born alive depends on state or local law. There must be proof of a live birth shown by an official document, such as a birth certificate. If the child died before they were issued a social security number (SSN), enter “DIED” in the Social Security Number field (see Dependents – Entering Information […]
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.
If you are an eligible educator, you can deduct up to $300 ($600 if married filing joint and both spouses are educators, but not more than $300 each) of any unreimbursed expenses that you paid or incurred for books, supplies, computer equipment (including related software and services), other equipment, and supplementary materials that you use […]
To access the student worksheet, follow the steps below. Online Dashboard From within your TaxAct return, click Deductions & Credits. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Education drop-down. Click Add beside Expenses & Scholarships. Complete the rest of the interview process. Classic […]
The American Opportunity Tax Credit can be claimed for expenses for the first four years of post-secondary education. It is a tax credit of up to $2,500 of the cost of qualified tuition and related expenses paid during the taxable year. Of the total credit amount, 40%, a maximum of $1000, is refundable. The remaining […]
The IRS allows qualifying education expenses to be applied to one of the following education benefits: American Opportunity Credit Lifetime Learning Credit Tuition and Fees Deduction (Tax Years 2020 and earlier only) See IRS Publication 970 for more information about education credits. To enter your education expenses and qualifications, follow the steps below. Online Dashboard […]
The Federal Government offers relief to those in areas who were impacted by certain Presidentially declared disasters. Federal casualty losses, disaster losses and qualified disaster losses are three categories of casualty losses that refer to federally declared disasters. The requirements for each loss vary. For more information, see Publication 547 or the Instructions for Form 4684. […]
If your return was rejected by the IRS because a child claimed on your return was already claimed as a dependent AND for the Earned Income Credit (EIC) on someone else’s return, you will need to delete this child as a dependent and delete the child from Schedule EIC. To remove a child as a […]
TaxAct supports two Social Security Number (SSN) entries for alimony paid from both the taxpayer and spouse. To report alimony paid for both spouses in the TaxAct program, follow the steps below. Online Dashboard From within your TaxAct return, click Deductions & Credits. On smaller devices, click the menu at the top left corner of […]
The following information is adapted from the IRS Form 1040 Instructions: If a taxpayer died before filing their return and has a filing requirement, the surviving spouse or personal representative must file the final return. If taxes were withheld, a return must be filed to claim a refund. If your spouse died and you didn’t […]
When filing a return, the first year after the taxpayer or spouse has died, you can either import the prior year information into the return, and then make changes, or skip the import process and enter return details manually. If you choose to import the prior year’s information, if the spouse was the deceased you […]
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 […]
Changing any of the key entries listed below will affect the outcome on your tax return. The important entries on Form 1099-R include Boxes 1, 2a, 2b, 7 (numeric and alpha), and the IRA/SEP/SIMPLE checkbox. Additionally, if you need to use the Simplified Method, have converted a traditional IRA to a Roth IRA, or have […]
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 […]
Below you will find links to the websites and/or forms for each state to request a copy of your state return or transcript. Alabama | Alaska | Arizona | Arkansas | California | Colorado | Connecticut | Delaware | District of Columbia | Florida | Georgia | Hawaii | Idaho | Illinois | Indiana | […]
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. […]
Personal exemption deductions for yourself, your spouse, or your dependents were eliminated as of tax year 2018. Refer to the links below for more information about dependents: Publication 501 Dependents, Standard Deduction, and Filing Information Whom May I Claim as a Dependent? IRS Interactive Tax Assistant Dependents – Entering Information in Program Note that any […]
Form 4868 is used to request an extension of time to file an individual tax return, Form 1040. Generate and FileTo generate and file Form 4868, follow the steps below. NOTES: Form 4868 is only an extension of time to file, not an extension of time to pay any amount due. If you expect […]
If you were a victim of identity theft, you may receive IRS Notice CP01A containing a single-use 6-digit Identity Protection (IP) PIN. For information on IP PINs, follow this link to the IRS FAQs about the Identity Protection Personal Identification Number (IP PIN). If you have misplaced the IRS letter containing your IP PIN, you […]
Charitable contributions are entered on Schedule A (Form 1040), Lines 11-12. To be deductible, a contribution must be made to a qualified organization. See the IRS Tax Exempt Organization Search tool for a searchable list of qualified organizations. Donation Assistant TaxAct Deluxe, Premier and Self-Employed users can quickly and easily enter information for donated items […]
TaxAct® automatically calculates the Earned Income Credit (EIC) based on the information in your return. If you have a dependent that is a qualifying child, enter your dependent information (including name, SSN, relationship to you, year of birth, number of months lived with you, and student status). TaxAct will then use dependent information in the […]
If a taxpayer or taxpayer’s spouse is claimed as a dependent on someone else’s return, the standard deduction on the taxpayer’s return is generally reduced and calculated according to the Standard Deduction Worksheet for Dependents of IRS Publication 501. The TaxAct program calculates the standard deduction for you when you indicate that either you or […]
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 […]
Your filing status and eligibility for certain credits is determined, in part, by whether you have a qualifying dependent. The software will automatically calculate any eligible credits as you enter your information. Tips are provided during the interview process, but you can also use the guidelines below to help determine if someone qualifies as your […]
For information on how to enter or edit a dependent in the TaxAct program, go to the Dependents – Entering Information in Program FAQ. Note: A child born on any date in a given year – even on December 31 – is considered a dependent for the entire year.
For information on how to enter or edit a dependent in the TaxAct program, go to the Dependents – Entering Information in Program FAQ. For information on how to review your calculated Child Tax Credit (CTC) or Other Dependent Credit (ODC), go to the Dependents – Entering and Reviewing FAQ.
When you enter the dependent information, it flows to Form 1040. The dependent’s data (social security number, year of birth, relationship, number of months lived with you, etc.) is also used to calculate credits such as the Child Tax Credit (CTC) or Other Dependent Credit (ODC). For information on how to enter or edit a […]
For information on how to enter or edit a dependent in the TaxAct program, go to the Dependents – Entering Information in Program FAQ. When entering your dependent, select the Dependent Citizenship type by selecting it in the drop-down Dependent Citizenship. Options include: None selected U.S. citizen, U.S. national, or U.S. resident alien Resident of […]
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. […]
The number reported in Box 12 of Form W-2 – Wage and Tax Statement (code “W”) is the amount your employer contributed to your health savings account (including cafeteria plan contributions). You’ll need to enter this figure in your tax return when adding Form W-2 – see Entering in Program – Form W-2 for details. […]
Substantiated employee business expense reimbursements are reported on Box 12 of Form W-2. If you don’t use this expense, the unused amount would be taxed as wages. Excess reimbursements. If you are not a member of the Armed Forces reserves, a qualified performing artist, a fee-basis state or local government official, or an employee with […]
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 […]
S corporations and Partnerships use Schedule K-2 to report foreign income or other international tax items when filing Form 1120-S or 1065. In most cases, when you are a shareholder or partner of an entity that files Schedule K-2, you will receive Schedule K-3 detailing your share of those international tax items. You will be […]
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 […]
Below you will find information regarding each state’s expectations for paying tax owed. Alabama | Alaska | Arizona | Arkansas | California | Colorado | Connecticut | Delaware | District of Columbia | Georgia | Hawaii | Idaho | Illinois | Indiana | Iowa | Kentucky | Kansas | Louisiana | Maine | Maryland | […]
Form 6251 is used to calculate the Alternative Minimum Tax (AMT), a separate tax that limits how much certain deductions and tax benefits can reduce a taxpayer’s total tax. It applies to taxpayers with income or deductions that receive favorable treatment under regular tax rules. The form also helps determine the tentative minimum tax, which […]
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 […]
If you need to correct a state individual tax return filed through TaxAct, follow the steps below to prepare and file an amended return. Obtain a copy of the original return. See the FAQ How to Obtain a Copy of a Tax Return for details. Determine the specific updates or corrections needed for your […]
The Electronic Federal Tax Payment System (EFTPS) is a free tax payment system for all taxpayers. The EFTPS system is an easy way to pay your federal taxes for individuals as well as businesses. You can make ALL of your federal tax payments including federal tax deposits (FTDs), installment agreement, and estimated tax payments using […]
Form 1120 – Corporation Estimated Tax Payments Generally, corporations must make quarterly estimated tax payments if they expect to owe $500 or more in taxes. Failure to pay on time may result in penalties and interest. If the corporation overpays estimated tax, file Form 4466 to request a refund. To set up estimated tax payments: From […]
You can file an amendment with TaxAct, even if you used a different provider or mailed in your original return. If you didn’t file your original return with TaxAct, TaxAct won’t have your original figures. You must re-create your original return as it was submitted to the IRS or state. Once your return looks like […]
To create and file the amended corporate return in TaxAct: Ensure that you have a copy of your original return. If you used TaxAct to file the original, you can choose to print a copy of the original return at this time. If you already have a copy, continue below. If you used another program, […]
Generally, a domestic partnership must file Form 1065 U.S. Return of Partnership Income by the 15th day of the third month following the date its tax year ended (as shown at the top of Form 1065). To file for an extension, use Form 7004 Application for Automatic Extension of Time to File Certain Business Income […]
Generally, an S Corporation must file Form 1120-S U.S. Income Tax Return for an S Corporation by the 15th day of the third month after the end of its tax year. For calendar year corporations, the due date for Form 1120-S is March 15. A corporation that has dissolved must generally file by the 15th day of […]
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 […]
Why are my Schedules L and M-1 printing blank even though amounts have been entered? If the corporation’s total receipts for the tax year AND total assets at the end of the tax year less than $250,000, Schedules L and M-1 are not required. However, even if the balance sheet (Schedule L) is not required […]
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, […]
Checking Your State Return Status Visit the E-File and Tax Refund Status webpage of the tax agency you used to file. Keep in mind that state return acknowledgments may take up to 10 days. Checking Your State Refund Status Visit the State Resources webpage for your state’s tax department. Each state has different processing times, so delays may vary.
IRS Form 8888, Allocation of Refund, is used by taxpayers who want their refunds to be deposited into more than one account. The taxpayer may split his/her refund into as many as three financial accounts. For example, one might designate part of the refund be deposited into a savings account, part into a checking account, […]
The tax return you file for your business is determined by how the business is organized. TaxAct supports all the following business types: Limited Liability Company (LLC): LLC designation is done at the state level and doesn’t determine which federal tax return to file. That is determined by the business structure. An LLC may file […]
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 […]
Per IRS Instructions for Form 1098-T: Instructions for Student You, or the person who can claim you as a dependent, may be able to claim an education credit on Form 1040 or 1040-SR. This statement has been furnished to you by an eligible educational institution in which you are enrolled, or by an insurer who […]
Per IRS Publication 524 Credit for the Elderly or the Disabled, page 4: Permanent and total disability. You have a permanent and total disability if you can’t engage in any substantial gainful activity because of your physical or mental condition. A qualified physician must certify that the condition has lasted or can be expected to […]
When you enter the applicable basic information in TaxAct, the software will automatically calculate if a taxpayer is eligible for the additional standard deduction amount. TaxAct® will use the higher of your itemized deductions or the standard deduction for your filing status to maximize your tax benefit. The total of your itemized deductions is reported […]
Per IRS Publication 501: Higher Standard Deduction for Age (65 or Older) If you are age 65 or older on the last day of the year and don’t itemize deductions, you are entitled to a higher standard deduction. You are considered 65 on the day before your 65th birthday. Therefore, you can take a higher […]
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 – […]
For information about whether you can claim the mortgage interest paid on a foreign loan for a foreign home, go to the IRS website. Online Dashboard From within your TaxAct return, click Deductions & Credits. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the […]
Form 8936 Qualified Plug-in Electric Drive Motor Vehicle Credit is a non-refundable credit. For more information about how this affects your tax return, go to our Nonrefundable Credit vs Refundable Credit FAQ. To access Form 8936 in the TaxAct program: From within your TaxAct return (Online or Desktop), click Federal (on smaller devices, click in […]
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 […]
Once the IRS accepts an e-filed return, they do not provide us further information regarding when the refunds are mailed or direct deposited. See Refunds – IRS Questions and Answers for details. Note that any link in the information above is updated each year automatically and will take you to the most recent version of […]
To be eligible for the American Opportunity Credit, a student must not have completed the first four years of post-secondary education as of the beginning of the taxable year. The “first four years” refers to the amount of academic credit that has been awarded. Generally, it’s what schools use to classify students (junior, senior, etc.). […]
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 […]
To e-file an Illinois tax return, you (and/or spouse) must have: Filed an Illinois tax return within the past two years, or A valid Illinois Driver’s License or State ID Note. If you (and/or spouse) have not filed an Illinois tax return within the past two years and you (and/or spouse) do not have a […]
Complete your Minnesota Property Tax Return To enter or review information for the Minnesota Property Tax Refund in the State Q&A section of your TaxAct return: From within your TaxAct return (Online or Desktop), click State to expand, then click Minnesota (or MN). On smaller devices, click in the upper left-hand corner, then click State. […]
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 […]
An LLC will file one of the following returns, depending on the situation: Single-member LLCs: Form 1040 (Schedule C, E, or F) Multiple-member LLCs (Partnership): Form 1065 S corporation: Form 1120-S Corporation: Form 1120 LLCs can also consult IRS Publication 3402 Tax Issues for Limited Liability Companies to help determine the best tax reporting form […]
Employers are required to report the cost of an employee’s health care benefits in Box 12 of Form W-2 Wage and Tax Statement, using code “DD” to identify the amount. This amount is reported for informational purposes only and is NOT taxable. It is included in Box 12 in order to provide comparable consumer information […]
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 […]
The TaxAct® program automatically doesn’t print a copy of Schedule A (Form 1040) Itemized Deductions if you choose to take the standard deduction, but you can choose to print Schedule A anyway. Temporarily change your return to use itemized deductions in the TaxAct program. If you need help, go to our Force Standard or Itemized Deductions […]
Am I required to file a state return? You will need to determine your specific state’s filing requirements. These can generally be found in the form instructions for that state or on their website. Note. Refer to the Federation of Tax Administrator’s State Tax Forms & Filing Options webpage to be directed to any state […]
Business income is income from your trade or business transactions and activities. Some income from tangible and intangible property is also included as business income if the acquisition, use, management, or disposition of the property makes up an integral part of your business operations. Any other income is nonbusiness income, and you’ll need evidence showing […]
Individual federal tax returns are due April 15th – see the e-Filing – Return Due Dates and Deadlines FAQ for details. See the chart below for state return due dates. State Filing Deadline Alabama April 15 Alaska Does not assess income tax Arizona April 15 Arkansas April 15 California April 15 Colorado April 15 Connecticut April 15 […]
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 […]
The definition of “qualifying education expense” differs depending on the educational benefit being claimed on your return. Room and board are NOT considered a qualifying education expense in the following situations: If you are claiming the American Opportunity Tax Credit or Lifetime Learning Credit. For purposes of determining how much of your scholarship and fellowship income is tax-free. […]
Adjustments due to differences between California Schedule K-1 and IRS Schedule K-1 are entered on California Schedule CA (540) California Adjustments – Residents. Please refer to the California Schedule CA (540) Instructions for additional information. Depreciation adjustments are made on California Form 3885A Depreciation and Amortization Adjustments if there is an IRS Form 4562 Depreciation […]
Indiana’s Economic Development for a Growing Economy Credit (EDGE Credit) is calculated on Schedule IN-EDGE and carries to Form IT-40, Schedule F. You would receive a credit agreement letter along with your Indiana K-1 from the preparer of your business return. To enter the credit in the TaxAct® program: From within your TaxAct return (Online […]
Per the IN IT-40 Booklet: “Line 7 – Military Service Deduction (active duty armed forces members only) Note. National Guard and armed forces reserves members will not report the deduction for their income on this line. Please see the instructions for Line 11, National Guard and Reserve Component Members Deduction on page 22. Important. The […]
Per the IN IT-40 Booklet: Line 1 – Tax Add-Back If you did not complete Federal Schedules C, E, or F, which include sole proprietorship income, farm income, rental, partnership, S corporation, and trust and estate income (or loss), then do not complete this line. On those schedules you are allowed to claim a deduction […]
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 […]
TaxAct® will calculate the general sales tax for your state for Schedule A (Form 1040) Itemized Deductions, Line 5. In the Itemized Deductions section of TaxAct, you can enter the state and the number of days you lived in that state. TaxAct will then calculate the state general sales tax based on the optional state […]
Depending on where you live, the TaxAct program might ask what your locality is when you claim your State and Local General Sales Tax Deduction (if you need help accessing the sales tax section of the TaxAct program, go to our Sales Tax – Entering in the Program FAQ): From within the sales tax deduction […]
The TaxAct® program does not support the entry of more than five states on Schedule A (Form 1040) Itemized Deductions. If you have more than five states to enter, you will need to manually calculate each state, then enter one total. To manually calculate the tax, use the calculator on the IRS website, or use the […]
Before claiming a deduction for sales tax on your home, check your real estate bill to make sure you paid sales tax. Per IRS Instructions for Schedule A, page 6: Line 7. Enter on line 7 any state and local general sales taxes paid on the following specified items. If you are completing more than […]
If your locality imposes a general sales tax, you can claim this for your State and Local General Sales Tax Deduction. To claim your State and Local General Sales Tax Deduction in the TaxAct program (if you need help accessing the sales tax section of the TaxAct program, go to our Sales Tax – Entering […]
Per IRS Publication 936 Home Mortgage Interest Deduction, page 4: Mortgage prepayment penalty. If you pay off your home mortgage early, you may have to pay a penalty. You can deduct that penalty as home mortgage interest provided the penalty isn’t for a specific service performed or cost incurred in connection with your mortgage loan. […]
Per IRS Instructions for Form 2106, page 1: Purpose of Form Use Form 2106 if you were an Armed Forces reservist, qualified performing artist, fee-basis state or local government official, or employee with impairment-related work expenses. Due to the suspension of miscellaneous itemized deductions subject to the 2% floor under section 67(a), employees who do […]
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 […]
If you used your car while volunteering, you can report the mileage or actual expenses in your TaxAct return. The TaxAct program then transfers the information to Schedule A (Form 1040) Itemized Deductions, line 11. The TaxAct® program computes the charitable mileage deduction for you, per the IRS Standard Mileage Rates webpage. To report the cost for […]
A number of prominent charitable organizations state that gifts of frequent flyer miles are generally not tax-deductible, because they are given to you by the airline and therefore have no monetary value in the eyes of the Internal Revenue Service. You can contact the IRS at (800)829-1040 for a decision as to whether your gift […]
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 […]
TaxAct® supports the the preparation of California individual and business tax returns, but does not support the reporting requirement by employers (i.e. Forms 592, 592-A, 592-B, 592-F, or 592-V). You can obtain further information on the California Franchise Tax Board web site by accessing the following links: California Instructions for Form 592 Resident and Nonresident […]
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 […]
Other deductions or expenses that do not conform to the separate lines for deductions on Form 1065 U.S. Return of Partnership Income are reported on Line 20. To enter this information in the Partnership Q&A: From within your TaxAct return, click Federal (on smaller devices, click in the top left corner of your screen, then click Federal). Click Business Deductions, then scroll […]
To get to Schedule L, Non Recourse Liabilities in TaxAct: Click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal. Click Miscellaneous Click Balance Sheets Click Continue until you reach the Schedule L Balance Sheet – Summary screen Click Next Topic
Note: Qualifying Widow(er) with Dependent Child is now Qualifying Surviving Spouse Per IRS Publication 17 Your Federal Income Tax (For Individuals), page 27: Qualifying Widow(er) If your spouse died in 2024, you can use married filing jointly as your filing status for 2024 if you otherwise qualify to use that status. The year of death […]
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 […]
There are five different entity types for partnerships. General partnership – a general partnership is composed only of general partners. Limited partnership – a limited partnership is formed under a state limited partnership law and composed of at least one general partner and one or more limited partners. Limited Liability Partnership (LLP) – An LLP is formed under […]
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. The purpose of a Section 754 election is to reconcile a new partner’s outside and inside basis in the partnership. This election allows the new partner to receive the benefits of […]
TaxAct® currently supports the following business credits forms: Form 3468, Investment Credit Form 4255, Recapture of Investment Credit Form 5884, Work Opportunity Credit Form 6478, Biofuel Producer Credit Form 6765, Credit for Increasing Research Activities Form 8586, Low-Income Housing Credit Form 8826, Disabled Access Credit Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production […]
Per IRS Publication 970: “Qualified education expenses paid by a dependent you claim on your tax return, or by a third party for that dependent, are considered paid by you.” The educational institution sends a Form 1098-T Tuition Statement to the student to report the expenses. For more details about what is reported on Form […]
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 […]
Below are links to state refund status webpages. Specific questions about a state refund should be directed to the relevant state agency. For information on the status of a federal refund, see the IRS’s Where’s My Refund? webpage. Alabama Illinois Mississippi Oklahoma Arizona Indiana Missouri Oregon Arkansas Iowa Montana PennsylvaniaPhiladelphia, PA California Kansas Nebraska Rhode Island Colorado […]
Prior year Net Operating Loss (NOL) amounts are entered on the Net Operating Loss Worksheet. To access the worksheet Net Operating Loss Worksheet: 1. From within your TaxAct return (Online or Desktop), click Federal (on smaller devices, click in the top left corner of your screen, then click Federal). 2. Click Business Deductions dropdown, then […]
If you are seeing the Red Alert Error or Omission: Ordinary and Rental Activities on Single Schedule K-1 when reviewing your return, this is due to entering an amount in both the Ordinary business income or loss field for the Schedule K-1 and the Net rental real estate income or loss. This alert includes passive […]
Preparer Notes can be used by the paid preparer, electronic return originator, or taxpayer to provide additional, voluntary information related to Forms 1120, 1120-S or 1065 tax returns, but it is not required to attach them. These notes are added to the return in the same area where the Election Explanations and Regulatory Explanations are […]
Income Ratio This ratio is calculated by using the income earned or received while a resident of Georgia divided by your total income earned or received. Time Ratio This ratio is calculated by using the number of days in the state of Georgia divided by the number of days in the year. Time Ratio This […]
You may claim only the following as a dependent: A person who qualifies as your dependent on your federal return (see instructions regarding an exception). A person who is age 65 or over (related to you or not) who does not qualify as your dependent on your federal return, but for whom one of the […]
Below is the link to the Arizona Department of Revenue’s code lists for Qualifying Charitable Organizations and Qualifying Foster Care Charitable Organizations: Contributions to QCOs and QFCOs | Arizona Department of Revenue (azdor.gov) To find your code, scroll down to the heading List of Qualifying Charities, and click QCO (Qualifying Charitable Organizations) or QFCO (Qualifying […]
TaxAct now supports California Form 3804 – Pass-Through Entity Elective Tax Calculation in the California 1065 and 1120S modules. We also support the form for single-member LLC (SMLLC) returns that are part of the California 1040 module. Partners, members, and shareholders (owners) can consent to be included on Form 3804 by checking the calculation checkbox […]
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 […]
Per the IRS instructions, a 2023 S corporation does not need to complete and file with the IRS Schedules K-2 and K-3 or furnish to the shareholder(s) their Schedule K-3 if each of the following 3 criteria are met: No or limited foreign activity Foreign activity is defined as Foreign income taxes paid or accrued, […]
What is the difference between “Compensation of officers” and “Salaries and wages”? Compensation of Officers A corporation determines who is an officer under the laws of the state/country where it is incorporated. Generally, officers would include those who are principal executive or financial officers. If total receipts from page 1 of the return are $500,000 […]
In the TaxAct® program, you can attach an approved Form 2553 to your Federal and/or State tax return. When the election is allowed to be attached, the program will prompt you to upload the documentation. An S Corporation election can be attached if: You are electing to be an S Corporation this year S Corporation […]
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 […]
The amount of excess premium tax credit repayment, calculated on Line 29 of Federal Form 8962 Premium Tax Credit (PTC), has a different calculation if there was a self-employed health insurance deduction claimed on Line 16 of Schedule 1 (Form 1040) Additional Income and Adjustments to Income. Per IRS Instructions for Form 8962, page 15: […]
If you meet one of the following conditions, you’ll need to include your Hawaii Tax Identification Number on your tax return: You operate a business in Hawaii You practice a profession as a sole proprietorship in Hawaii You receive rental income from a property located in Hawaii You operate a farm in Hawaii You can […]
Per the Indiana CollegeChoice529 FAQs on 529s webpage: What is CollegeChoice 529? CollegeChoice 529 is a Section 529 plan offered by the Indiana Education Savings Authority (Authority). Ascensus Broker Dealer Services, Inc. serves as the Program Manager. Ascensus Broker Dealer Services, Inc. and its affiliates (Ascensus) have overall responsibility for the day-to-day operations including investment […]
The California Consumer Privacy Act (CCPA) is intended to enhance privacy rights and consumer protection for the residents of the State of California. The bill was enacted in 2018 and took effect on January 1, 2020. To find more information on CCPA, please visit the State of California Department of Justice California Consumer Privacy Act […]
In efforts to maintain a secure channel for all consumer Personal Data Requests, you must initiate this request through the user-friendly Review your California privacy rights website or by logging into your secure TaxAct account. To access the California Consumer Privacy Rights webpage from within your account: Sign in to your TaxAct account, then click the […]
Account holders are required to report their beginning and ending balance each year. Form MSA has been discontinued and this reporting must be made on the Montana Medical Savings Account schedule included with Form 2. To complete this schedule: From within your TaxAct return (Online or Desktop), click State, then click Montana (on smaller devices, […]
The Pennsylvania Local Earned Income Tax Return can be prepared and printed using TaxAct. Since it is not submitted directly to the PA Department of Revenue, it can’t be e-filed with our software. After completing and printing the return, mail it to the local earned income tax collector for your tax collection district. Related Links […]
If Form W-2 Wage and Tax Statement lists a RITA city, TaxAct will create the necessary RITA return. To confirm whether you live in a RITA city, visit RITA Municipalities. TaxAct allows you to enter up to 24 lines in the bottom section of Form W-2. If you need more than that, you will need […]
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 […]
Public Act 18-49, passed on May 31, 2018, included a new Pass-Through Entity Tax which changed how income earned by S corporations and partnerships is taxed. For tax years starting on or after January 1, 2018, the partnership or S corporation pays tax on its own income instead of passing through the tax to the […]
You are required to file Schedule B-2 (Form 1065) Election Out of the Centralized Partnership Audit Regime if you answer “Yes” to question 31 on Schedule B within Form 1065 U.S. Return of Partnership Income, “Is the partnership electing out of the centralized partnership audit regime under section 6221(b)?” Schedule B-2 (Form 1065) is not required for corporation returns. Per IRS Instructions […]
The IRS updated the Form 1065 instructions for tax year 2020 to reflect changes to partner capital account reporting requirements. Beginning with tax years ending on or after December 31, 2020, all capital accounts must be reported on a tax basis. While not an absolute requirement for tax year 2020 due to IRS penalty relief, […]
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 […]
Since 2016, the IRS has allowed Form 1040-NR U.S. Nonresident Alien Income Tax Return to be e-filed. Form 1040-NR-EZ is no longer available. TaxAct supports e-filing for Form 1040-NR. For more information, go to the IRS Instructions for Form 1040-NR. Note that any link in the information above is updated each year automatically and will […]
Taxpayers who file in Georgia for the first time and those who have not filed in five or more years will not receive a direct deposit; instead, a paper check will automatically be issued. According to the Georgia Department of Revenue, this policy exists to help prevent fraudulent requests for direct deposit refunds.
To print the return in Professional Editions before filing: From within your TaxAct return (professional edition), click File, then click Print Client Return (do not use Preparer, Print Returns). Enter a number of copies for State Filing and Federal Filing. Click Select States, select the states you want to print, then click Back to Client Return. Click Print, then […]
While California Schedule P (540) Alternative Minimum Tax and Credit Limitations – Residents may be part of your return, it does not necessarily mean that your return is subject to Alternative Minimum Tax (AMT). As explained below, there are other reasons your return may need to contain California Schedule P. Per the California Instructions for […]
If you’re seeing a message in the electronic filing (e-filing) steps of the California 1120 return indicating that the return can’t be e-filed because it contains California Schedule R-7 Election to File a Unitary Taxpayers’ Group Return (which is not eligible for e-filing), you may want to review the following information to determine if you indicated Schedule R-7 […]
If the amount of net income reflected on California Form 100 California Corporation Franchise or Income Tax Return Line 1 doesn’t match the amount on Federal Form 1120 U.S. Corporation Income Tax Return page 1, Line 28, it may be due to the amount(s) entered as a deduction for taxes (i.e. state and local, payroll, […]
California law requires business entities that prepare an original or amended return using tax preparation software to e-file returns. Failure to e-file will be penalized if the failure to e-file is due to willful neglect and not reasonable cause. The penalty is $100 for the initial e-file failure and $500 for each subsequent failure. Business […]
Every domestic or foreign Partnership, LLC, or LLP that meets any of the following requirements is required to file New York Form IT-204-LL on or before the 15th day of the third month after the end of the tax year. Learn more about New York Form IT-204-LL. Requirements The taxpayer is: A domestic or foreign LLC (including […]
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 […]
Per IRS Publication 530 Tax Information for Homeowners, page 2: Nondeductible payments. You can’t deduct any of the following items. Insurance (other than mortgage insurance premiums), including fire and comprehensive coverage, and title insurance. Wages you pay for domestic help. Depreciation. The cost of utilities, such as gas, electricity, or water. Most settlement costs. See […]
Form 2553, Election by a Small Business Corporation should be filed at a different time than your Form 1120-S, U.S. Income Tax Return for an S Corporation or Form 1120, U.S. Corporation Income Tax Return. Form 2553 must be filed by mail or fax. To enter or review information on Form 2553: From within your TaxAct 1120 or 1120-S […]
The corporation’s section 179 depreciation does not appear on IRS Form 1120-S, U.S. Income Tax Return for an S Corporation. This is because the Section 179 depreciation is not deducted on the Corporation’s 1120-S return. It is passed through to the shareholders on Schedule K-1 (Form 1120-S), Shareholder’s Share of Income, Deductions, Credits, etc. Per […]
Per IRS Instructions for Form 1120, U.S. Corporation Income Tax Return, on page 4: Electronic Deposit Requirement Corporations must use electronic funds transfer to make all federal tax deposits (such as deposits of employment, excise, and corporate income tax). Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). However, if […]
A partner’s capital account and outside basis are two different things. The partner’s capital account measures the partner’s equity investment in the partnership. The outside basis measures the adjusted basis of the partner’s partnership interest. One of the key differences between capital accounts and outside basis is the effect of partnership liabilities. Partnership liabilities may increase or decrease the partner’s outside basis, but […]
The type of income tax return a business is required to file depends on the type of entity and how the business is organized. In general, S corporations file Form 1120-S U.S. Income Tax Return for an S Corporation, multi-member partnerships file Form 1065 U.S. Return of Partnership Income, and C corporations file Form 1120 […]
There are many differences between amortization and depreciation. Below is a definition of each to assist you in determining whether amortization or depreciation applies to the asset in question. Per IRS Instructions for Form 4562 Depreciation and Amortization (Including Information on Listed Property): Depreciation Depreciation is the annual deduction that allows you to recover the […]
The IRS currently offers two special depreciation methods: Section 179 expense deduction and bonus depreciation. Each method is described below. Section 179 Expense Corporation and partnerships are eligible to take Section 179 expense on qualifying MACRS Section 1245 property when used more than 50 percent for business use and placed in service during the current […]
You can deduct various federal, state, local, and foreign taxes directly attributable to your trade or business as business expenses. Generally, you can only deduct taxes in the year you pay them. This applies whether you use the cash method or an accrual method of accounting. Per IRS Publication 535 Business Expenses: Real Estate Taxes […]
An accounting method is a set of rules used to determine when income and expenses are reported on your tax return. Your accounting method is chosen when you file your first tax return. If you later choose to change your accounting method, you must file Form 3115 Application for Change in Accounting Method, and get […]
TaxAct® currently supports the following business credits forms: Form 3468, Investment Credit Form 5884, Work Opportunity Credit Form 6478, Biofuel Producer Credit Form 6765, Credit for Increasing Research Activities Form 8586, Low-Income Housing Credit Form 8826, Disabled Access Credit Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit Form 8844, Empowerment Zone Employment […]
The net income (loss) per books amount that appears on Line 1 of Schedule M-1 Reconciliation of Income (Loss) per Books With Income (Loss) per Return is a calculated field and will change when an adjustment amount is entered on the other lines of the Schedule M-1. The calculation of line 1 is as follows: […]
A retained earnings (or deficit) account is a permanent (accumulated) balance sheet account that tracks an entity’s net earnings that have not been paid out in the form of dividends. These net earnings are retained by the entity. The amount of accumulated retained earnings is reduced by distributions to shareholders and transfers to additional paid-in […]
If you’re filing taxes on behalf of a corporate entity, you may need to reconcile that entity’s accounting income (also known as “book income”) with its taxable income. The IRS uses Schedule M-1 of Form 1120 for reporting such reconciliations. Learn more about Form 1120: U.S. Corporation Income Tax Return. Learn more about Schedule M-1 […]
In order to file federal tax returns, businesses are generally required to have an Employer Identification Number (EIN). This number is used to uniquely identify each business entity. You can apply for an EIN on the IRS website, via a free, interview style process. Click the link below to apply for an EIN, and learn […]
Generally, passive activities include: Activities that involve the conduct of a trade or business if the partner does not materially participate in the activity, and All rental activities regardless of the partner’s participation. Activities that are not passive: Trade or business activities in which the partner materially participated for the tax year. Any rental real […]
Generally, passive activities include: Activities that involve the conduct of a trade or business if the shareholder does not materially participate in the activity, and All rental activities regardless of the shareholder’s participation. Activities that are not passive: Trade or business activities in which the shareholder materially participated for the tax year. Any rental real […]
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 […]
New York Form IT-280 Nonobligated Spouse Allocation is filed if you do not want to apply your part of a joint refund or refundable credit to a debt solely-owned by your spouse. You should file Form IT-280 if you want to disclaim your spouse’s: defaulted governmental education, state university or city university loan, past-due support […]
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 […]
Generally, scholarships are tax-free and reduce the amount of education expenses available to claim an education credit. However, a scholarship is not treated as tax free when: The scholarship may be used to pay unqualified education expenses, and The student includes the scholarship in income (if a return is required to be filed). It may […]
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 […]
The IRS First-Time Abate program provides certain penalty relief to taxpayers who have been tax compliant for the previous three years or have not previously been required to file a return. If you have a clean compliance history for the last three years, you may be eligible for first-time relief from the following penalties: Failure […]
Per the IRS Offers Tips for Taxpayers Who Missed the Tax Deadline webpage: File as soon as possible. If you owe federal income tax, you should file and pay as soon as you can to minimize any penalty and interest charges. There is no penalty for filing a late return if you are due a […]
All New York returns filed by a paid preparer must include the following paid preparer information on all paper and e-filed returns, if applicable: Preparer’s name Firm’s name (or preparer’s name if self-employed) Address Preparer’s NYTPRIN or NYPTRIN exclusion code (as applicable) Preparer’s PTIN (or SSN if preparer does not have a PTIN) Firm’s EIN […]
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 […]
If your interest is exempt from New York only: From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal. Click Investment Income in the Federal Quick Q&A Topics menu to expand, then click Interest income (Form 1099-INT). Click + Add Form 1099-INT to […]
If your interest is exempt from New Jersey only: From within your TaxAct return (Online or Desktop), click Federal (on smaller devices, click in the top left corner of your screen, then click Federal). Click the Investment Income dropdown, then click Interest income (Form 1099-INT). Click + Add Form 1099-INT to create a new copy […]
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 […]
Either you or your dependent (but not both) can claim the American Opportunity Credit or the Lifetime Learning Credit. If you claim the student as a dependent, only you can claim the credit. Treat any expenses paid by your dependent as paid by you. If you do not claim the student as a dependent, the […]
The child and dependent care credit is a percentage of your qualified expenses. Your expenses are subject to both the earned income limit and the dollar limit. The credit percentage is based on your Adjusted Gross Income (AGI). Finally, the credit is limited to the amount of your tax liability. Earned income limit. The amount […]
A single-member LLC is not considered a separate entity for federal tax purposes. An LLC with only one member is treated as an entity disregarded as separate from its owner for income tax purposes (but as a separate entity for purposes of employment tax and certain excise taxes). This taxpayer is by default required to […]
The payment or receipt of child support does not affect your taxable income. You should not report child support payments in your income. If you make child support payments, you cannot deduct the amount you paid. If you receive child support payments, the amount you receive is not taxed. Do not report this amount on […]
For purposes of the education credits and tuition deduction, the cost of a computer qualifies as an education expense if it is needed as a condition of enrollment. For more information on qualified education expenses, go to IRS Instructions for Form 8863 Education Credits (American Opportunity and Lifetime Learning Credits) or Form 8917 Tuition and […]
A corporation using the cash method of accounting can amortize organizational costs incurred within the first tax year, even if it does not pay the expense in that year. The cost must be incurred before the end of the first tax year in which the corporation starts its business.
Computing a property’s adjusted basis is not limited to decreases due to depreciation, amortization, and depletion. A property’s basis may also have to be increased or decreased by certain items depending on the type of property and its history. Below is a list of possible increases and decreases that affect a property’s basis, per IRS […]
S corporation shareholders are taxed on their share of the corporation’s profits, not necessarily their distributions. Distributions that are not dividends are considered a return of capital. Profit or loss from the corporation is included in the shareholder’s basis, and any distributions would decrease the shareholder’s basis. The shareholder would be taxed on distributions that […]
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 […]
A dependent is considered permanently and totally disabled if both of the following apply: They cannot engage in any substantial gainful activity because of a physical or mental condition, and A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death.
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 […]
Tuition paid with student loan proceeds is a qualified education expense for purposes of the education credits. For more information on qualified education expenses, see IRS Instructions for Form 8863 Education Credits (American Opportunity and Lifetime Learning Credits). Related Links 8863 Education Credits American Opportunity Credit Lifetime Learning Credit Publication 970 Tax Benefits for Education […]
A person who is your qualifying relative only because he or she lived with you all year as a member of your household is not a qualifying person for the Head of Household filing status even if he or she is your dependent. Per IRS Publication 501 Dependents, Standard Deduction, and Filing Information, page 10: […]
Per IRS Publication 17, Your Federal Income Tax For Individuals, page 23: Considered married. You are considered married for the whole year if, on the last day of your tax year, you and your spouse meet any one of the following tests. You are married and living together. You are living together in a common […]
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 […]
Per IRS Publication 526, page 5: Question. I volunteer as a Red Cross nurse’s aide at a hospital. Can I deduct the cost of the uniforms I must wear? Answer. Yes, you can deduct the cost of buying and cleaning your uniforms if the hospital is a qualified organization, the uniforms aren’t suitable for everyday […]
Per IRS Publication 547 Casualties, Disasters, and Thefts, page 9: Reimbursement Received After Deducting Loss If you figured your casualty or theft loss using the amount of your expected reimbursement, you may have to adjust your tax return for the tax year in which you get your actual reimbursement. This section explains the adjustment you […]
You generally cannot deduct the full amount of points in the year paid. Because they are prepaid interest, you generally must deduct them over the life (term) of the mortgage. Per IRS Publication 936 Home Mortgage Interest Deduction, starting page 6: Points The term “points” is used to describe certain charges paid, or treated as paid, by […]
Per IRS Publication 502, Medical and Dental Expenses, page 2: What Expenses Can You Include This Year? You can include only the medical and dental expenses you paid this year, but generally not payments for medical or dental care you will receive in a future year. (But see Decedent under Whose Medical Expenses Can You […]
Per IRS Publication 502 Medical and Dental Expenses, page 3: Whose Medical Expenses Can You Include? You can generally include medical expenses you pay for yourself, as well as those you pay for someone who was your spouse or your dependent either when the services were provided or when you paid for them. There are […]
You can generally include medical expenses you pay for yourself, as well as those you pay for someone who was your spouse or your dependent either when the services were provided or when you paid for them. There are different rules for decedents and for individuals who are the subject of multiple support agreements. Go […]
To enter mortgage interest in the TaxAct program, go to our Form 1098 – Entering in Program FAQ. Per IRS Publication 936 Home Mortgage Interest Deduction, page 2: Note. Interest on home equity loans and lines of credit are deductible only if the borrowed funds are used to buy, build, or substantially improve the taxpayer’s […]
Per IRS Publication 936 Home Mortgage Interest Deduction: Home mortgage interest. You can deduct home mortgage interest on the first $750,000 ($375,000 if married filing separately) of indebtedness. However, higher limitations ($1 million ($500,000 if married filing separately)) apply if you are deducting mortgage interest from indebtedness incurred before December 16, 2017. Related Links Instructions […]
Requirements for Filing Schedule UTP A corporation must file Schedule UTP (Form 1120) Uncertain Tax Position Statement with its income tax return if: The corporation files Form 1120, U.S. Corporation Income Tax Return; Form 1120-F, U.S. Income Tax Return of a Foreign Corporation; Form 1120-L, U.S. Life Insurance Company Income Tax Return; or Form 1120-PC, U.S. Property and Casualty Insurance Company Income […]
Why are my Schedule L, M-1, and M-2 printing blank even though amounts have been entered? If the corporation’s total receipts for the tax year AND total assets at the end of the tax year are less than $250,000, Schedules L, M-1, and M-2 are not required. But even if the balance sheet (Schedule L) […]
Per IRS Instructions for Schedule M-3 (Form 1120) Net Income (Loss) Reconciliation for Corporations With Total Assets of $10 Million or More, on page 1: Who Must File Generally, the following apply. A domestic corporation or group of corporations required to file Form 1120, U.S. Corporation Income Tax Return, that reports on Form 1120, Schedule L, Balance […]
A signed Form 8453 U.S. Individual Income Tax Transmittal for an IRS e-file Return must be attached to a federal partnership or corporation return whenever a taxpayer electronically files a business return without the assistance of a Paid Preparer. A signed Form 8453 authorizes the transmitter to send the return to the IRS. Form 8453 […]
Record Keeping The length of time you should keep a document depends on the action, expense, or event the document records. Generally, you must keep your records that support an item of income or deductions on a tax return until the period of limitations for that return runs out. The period of limitations is the […]
Per IRS Instructions for Schedule M-3 (Form 1065) Net Income (Loss) Reconciliation for Certain Partnerships, on page 1: Who Must File Any entity that files Form 1065 must file Schedule M-3 (Form 1065) if any of the following is true. The amount of total assets at the end of the tax year reported on Schedule […]
Requirements for Filing Schedule M-3 Any corporation required to file Form 1120-S U.S. Income Tax Return for an S Corporation that reports on Schedule L of Form 1120-S total assets at the end of the corporation’s tax year that exceed $10 million must complete and file Schedule M-3 (Form 1120-S) Net Income (Loss) Reconciliation for […]
Personal interest is not deductible. Personal interest is any interest that is not home mortgage interest, investment interest, business interest, or other deductible interest. Note. You may be able to deduct interest you pay on a qualified student loan. For more information, go to IRS Publication 970, Tax Benefits for Education. Note that any link […]
To enter federal or state withholding amounts when there is not an applicable section in the Q&A interview, use Form 1099-MISC Miscellaneous Income for Box 3. This will transfer the federal/state withholding to the appropriate lines of the returns. The actual Form 1099-MISC is not electronically filed with the return; only the information that it […]
If you owe Indiana state taxes, a Post Filing Coupon (PFC) will print with your return. This form must accompany any payment you make to the Indiana Department of Revenue (if you expect to receive a refund, there is nothing to mail and the PFC will not print) . If you are filing the return […]
According to Louisiana Department of Revenue instructions, you are required to report items purchased out of state for which you were not charged Louisiana sales tax. To enter this information in your TaxAct® return: From within your TaxAct return (Online or Desktop), click State, then click Louisiana (or LA). On smaller devices, click in the […]
Per the IA Net Income Expanded Instructions webpage: Qualifications for Exemption from Tax If you qualify for the low income exemption as explained below, enter the words “low income exemption” in the area to the left of your net income figure on line 26. Skip lines 27-54, then enter zero on line 55 and complete […]
In the W-2 section of the Federal Q&A, you can enter information for Boxes 15-20. In Box 20 (Local Name), you can only select “Indiana Locality” (which will appear as “IN” on the form) for the Indiana locality. The actual locality name needs to be entered in the Indiana State Q&A. To enter the locality […]
According to IL Publication 108 Illinois Property Tax Credit, on page 2: You must own your residence in order to take this credit. If you and your spouse each have a principal residence or if you had two principal residences during the tax year due to the sale of your home, you may claim the […]
The State of Illinois allows a subtraction from income for certain military pay earned, which is claimed on
To enter the deduction or credit for maintaining a home for aged and/or mentally disabled family members in your TaxAct® return: From within your TaxAct return (Online or Desktop), click State to expand, then click Idaho (or ID). On smaller devices, click in the upper left-hand corner, then click State. Click Subtractions in the Idaho […]
The process of applying for the qualified education expense credit involves three Georgia tax forms, which should be completed in the following order: Georgia Form IT-QEE-TP1 Qualified Education Expense Credit Preapproval Form Georgia Form IT-QEE-SSO1 Qualified Education Expense Credit Letter of Confirmation Georgia Form IT-QEE-TP2 Qualified Education Expense Credit Computation The Qualified Education Expense Credit […]
Georgia has a number of Non IND-CR Credits and Pass-Through Credits which are entered on Georgia Schedule 2 and flow to Line 20 of Georgia Form 500. To enter these credits in TaxAct®: From within your TaxAct return (Online or Desktop), click State, then click Georgia (or GA). On smaller devices, click in the upper […]
For Connecticut income to be correctly reflected on Line 6 of Form CT-1040NR/PY, you must complete the Part-Year Residents and Nonresidents section of the State Q&A. This information will be included in the calculation of the percentage to prorate the tax figured on Line 10. To enter this information in TaxAct: From within your TaxAct […]
To enter Form MO-CR Credit For Income Taxes Paid To Other States Or Political Subdivisions: From within your TaxAct return (Online or Desktop), click State, then click Missouri (or MO). On smaller devices, click in the upper left-hand corner, then click State. Click Other Credits in the Missouri Quick Q&A Topics menu to expand, then […]
If you have claimed the Mortgage Interest Credit on Form 8396 Mortgage Interest Credit on the federal return, your home mortgage interest from Form 1098 Mortgage Interest Statement is reduced on Federal Schedule A (Form 1040) Itemized Deductions by the amount of the credit. The credit is generally 20% of the interest paid on the […]
Per the Mississippi Department of Revenue Individual Income Tax FAQs webpage: Can I obtain a refund for taxes withheld from gambling winnings in Mississippi? No. Taxes withheld by Mississippi casinos as a result of gambling winnings are not refundable in Mississippi. Mississippi residents are not required to report Mississippi gambling winnings as income on their […]
All wages you earn as a Massachusetts resident are taxable to Massachusetts, even if you work out of state. Typically, there is withholding reported for both states in this situation. Some employers will list the amounts earned in and out of Massachusetts in different boxes of Form W-2. This can cause an issue for residents […]
To enter health care coverage information for Massachusetts Schedule HC Health Care Information and Form MA 1099-HC Individual Mandate Massachusetts Health Care Coverage in the TaxAct program: From within your TaxAct return (Online or Desktop), click State, then click Massachusetts (on smaller devices, click in the top left corner of your screen, then click State, then […]
As a senior citizen, you may be eligible to claim a refundable credit on your personal state income tax return. The Circuit Breaker tax credit is based on the actual real estate taxes paid on the Massachusetts residential property you own or rent and occupy as your principal residence. Massachusetts Senior Circuit Breaker Credit data […]
Massachusetts College Tuition Deduction Massachusetts allows a deduction for undergraduate tuition if the total paid exceeds 25% of the taxpayer’s Massachusetts adjusted gross income. Qualified expenses include only those expenses designated as tuition or mandatory fees required for enrollment at an eligible educational institution The deduction is equal to the amount by which the tuition […]
If you have a Form W-2 Wage and Tax Statement reporting wages for Massachusetts and another state, these wages may duplicate on the Massachusetts return. If this is the case, you will need to make an adjustment on the Massachusetts return. On Line 3 of Form 1, report total state wages and allocated tips from […]
Per Maryland Form 502 Instructions, on page 4: 7. Enter the name of your county on the MARYLAND COUNTY line. If you lived in Baltimore City, leave the MARYLAND COUNTY line blank. In order to correctly calculate the Baltimore City Tax Rate, the County field in the address section must be left blank. In order […]
Maryland State Retirement Pickup Contributions (Maryland STPICKUP) are entered as “Maryland state retirement pickup” contributions in the Federal Q&A, or directly on Form W-2 Wage and Tax Statement. This information will then transfer to Line 3 of Maryland Form 502. Entering the STPICKUP in the Other Box 14 description and amount fields will cause the […]
Form 1099-G Certain Government Payments received from the State of New York may reflect a different amount than what was actually received as a refund in the prior year. For example, both the school tax credit and the use tax on a return are adjusted as needed before the amount is calculated for Form 1099-G. […]
The mandatory contributions for New Jersey Unemployment Insurance/Workforce Development/Supplemental Workforce Funds (UI/WF/SWF), Disability Insurance (DI) and Family Leave Insurance (FLI) can be entered in the Federal Q&A on the screen titled Wages – W-2 – Other Information, or in the W-2 Quick Entry, under Other Box 14 Entries not previously entered above. TaxAct® will transfer these amounts to […]
Pensions from New York state and local governments are entered in the Federal Q&A in the Retirement Plan Income section. This would also be reported on Line 10 of Form IT-201. Exclusions of these pensions from New York income are reported on Line 26 of Form IT-201. Unlike the regular Pension and Annuity Income Exclusion, […]
If you’re a public employee of New York State or its local governments, you may have 414(h) contributions shown on your Form W-2 Wage and Tax Statement. Members or employees of the following organizations will need to enter 414(h) contributions on Form IT-201, Line 21 or Form IT-203, Line 23: NYS and Local Retirement systems, […]
Per the NY Instructions for Form IT-201: New York State county of residence Enter the county in New York State where you lived on December 31, 2024. If you live in New York City, use one of the following county names: If you live in use county Bronx Bronx Brooklyn Kings Manhattan New […]
If you are under the New Jersey filing threshold, Lines 30 through 49 of your New Jersey Form NJ-1040 should not be completed. Per the New Jersey Instructions for the NJ-1040 New Jersey Resident Return, page 22: Line 29 – New Jersey Gross Income Subtract Line 28c from Line 27 and enter the result. If zero or […]
Due to the large number of different jurisdictions that could be paired with a New Jersey return, the taxpayer must determine the amounts for lines 1 and 9 of New Jersey Schedule NJ-COJ. These amounts (income properly taxed by both New Jersey and other jurisdiction during the tax year and an actual tax paid to […]
Per the NH Form DP-10 Instructions Interest and Dividends Tax Return, page 3: LINE 2 DISTRIBUTIONS SUBJECT TO THE NEW HAMPSHIRE INTEREST AND DIVIDENDS TAX Enter any taxable annuities or the actual cash or property distributions you received or constructively received from any of the taxable income classes described in RSA 77:4. These distributions are […]
New Hampshire uses Form DP-10 for full or part-year residents. The DP-10 only has to be filed if the taxpayer received more than $2400 (single) or $4800 (joint) of interest and/or dividends. TaxAct® supports this form in the New Hampshire program. The taxpayer can enter the date of residency during the New Hampshire Q&A. You […]
Per Publication OR-17 Oregon Individual Income Tax Guide, page 68: American Indian (ORS 316.777) [Subtraction code 300] Are you an American Indian? If so, you might not have to pay Oregon income tax on your income. You may be able to subtract all or part of your income if all the following are true: You […]
Per the Oregon Department of Revenue Frequently asked questions webpage: We are filing an Injured Spouse Claim and Allocation form, federal Form 8379, with our joint federal return. What should we do for our Oregon return? If you want your Oregon refund apportioned between spouses, you need to request it in writing. When your return […]
Federal pension income is pension provided to the user through the federal government. This could be from services with the Department of Agriculture, Air Force, Department of Defense, etc. This would be income paid to the retiree or the beneficiary. You may be able to subtract some or all of your taxable federal pension included […]
In Pennsylvania, if the distribution code on Form 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. shows as “7” for normal distribution, then the distribution amount will not transfer to the PA-40 form or be included in gross income on the state return. If the distribution code shows as a “1” or “2” […]
The locality withholding from Box 19 of Form W-2 Wage and Tax Statement does not transfer to the Pennsylvania return. The locality withholding would only transfer to your federal return, Schedule A (Form 1040) Itemized Deductions, Line 5, for itemized deductions. If you have more than two local withholding amounts, you can combine the amounts of your locality withholdings and […]
When entering a military address, the only valid city entries are APO (Army Post Office), DPO (Diplomatic Post Office), or FPO (Fleet Post Office). Related Links What are APO/FPO/DPO addresses, and how can I send a care package to one? Note that any link in the information above is updated each year automatically and will […]
When entering names or social security numbers on the tax return, it is very important to enter them exactly as they appear on the social security card the individual was issued by the Social Security Administration (SSA). The IRS matches the name and SSN on the return with the records from the Social Security Administration. […]
Returns can still be electronically filed if the taxpayer or spouse (or any of their dependents) has an Individual Taxpayer Identification Number (ITIN) instead of a Social Security Number (SSN). If the dependent does not have a SSN or ITIN yet, the taxpayer can e-file without the dependent and file an amended return later, or […]
Usually, tax relief assistance payments are not taxable. People in a presidentially-declared disaster area who receive grants from state programs, charitable organizations, or employers to cover medical, transportation, or temporary housing expenses do not include these grants in their income. In the case of a federally-declared disaster, an affected taxpayer can call 1-866-562-5227 to speak […]
The IRS News From Around the Nation webpage provides news specific to local areas, primarily disaster relief or tax provisions that affect certain states. In the case of a federally declared disaster, an affected taxpayer can call 1-866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues. Note that any link in the […]
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 […]
You cannot deduct a contribution to a donor advised-fund if the sponsoring organization is a war veterans’ organization, a fraternal society, or a nonprofit cemetery company. There are also other circumstances in which you cannot deduct your contribution to a donor-advised fund. Generally, a donor-advised fund is a fund or account in which a donor […]
Pre-tax medical premiums are not an itemized deduction because you have already received a tax benefit as the premiums were not included in your gross wages in Box 1 of Form W-2.
All financial information and Social Security Numbers are blacked out on a redacted return. For insurance purposes, this is often done so they can confirm that your spouse and/or child(ren) are listed on your return as they expect them to be.
The Patient Protection and Affordable Care Act, signed into law on March 23, 2010, amends Section 108(f) of the Internal Revenue Code of 1986 to expand the exclusion from taxable income the assistance received for student loan forgiveness for health care professionals working in underserved areas. Per the Patient Protection and Affordable Care Act, page […]
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 […]
The TaxAct program does not support a separate Schedule D (Form 1040) Capital Gains and Losses for Alternative Minimum Tax (AMT) purposes. You would need to manually complete the form, enter the amount on Line 17 of Form 6251 Alternative Minimum Tax – Individuals, and paper-file the return. Note that any link in the information […]
The law sets the self-employment tax rate as a percentage of your net earnings from self-employment. This rate consists of 12.4% for social security and 2.9% for Medicare taxes. The maximum amount of net earnings subject to the 12.4% social security portion of the self-employment (SE) tax for 2023 is $160,200. All net earnings of […]
Per the IRS Due Diligence Law webpage: Requirements for paid preparers when claiming certain credits or head of household filing status Under the Internal Revenue Code, a penalty can be assessed against a paid tax return preparer for not meeting due diligence requirements when preparing a return or claim for refund claiming the: Earned income […]
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 IRS Instructions for Form 2106 Employee Business Expenses, page 2: Line 1. If you were a rural mail carrier, you can treat the amount of qualified reimbursement you received as the amount of your allowable expense. Because the qualified reimbursement is treated as paid under an accountable plan, your employer shouldn’t include the amount […]
Per the IRS Other Deduction Questions webpage: Question My spouse and I are filing separate returns. How can we split our itemized deductions? Answer If you and your spouse file separate returns and one of you itemizes deductions, the other spouse must also itemize, because in this case, the standard deduction amount is zero for […]
Per IRS Publication 501, page 24: Higher Standard Deduction for Age (65 or Older) If you are age 65 or older on the last day of the year and don’t itemize deductions, you are entitled to a higher standard deduction. You are considered 65 on the day before your 65th birthday. Therefore, you can take a […]
If you make a State Estimated Tax payment in January that is applied to the Fourth Quarter Tax Payment of the previous year, you would enter that state tax payment on Schedule A (Form 1040) Itemized Deductions for the year the payment was made. Example: If you made a State Estimated Tax payment on January […]
You can only deduct interest on the first $375,000 of your mortgage if you bought your home after December 15, 2017. Per IRS Publication 587 Business Use of Your Home, page 18: Home mortgage interest. You will figure the business portion of your home mortgage interest using Form 8829 (if you file Schedule C (Form […]
Tax Reform Update: Employee business expenses can be claimed on Form 2106 Employee Business Expenses only by Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses. Home mortgage interest and real estate taxes are transferred to Schedule A (Form 1040) Itemized Deductions in the following circumstances: […]
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 […]
The following TaxAct Business Tax Products are uniquely suited to prepare one federal return: Business 1065 Partnership return Business 1120-S S Corporation return Business 1120 C Corporation return Business 1041 Estate and Trust return The Professional Editions allow for preparation of multiple returns. Note. An EFIN (Electronic Filing Identification Number) is required to file electronically […]
Contributions to a 529 plan are not deductible on the federal return. Per the IRS 529 Plans: Questions and Answers webpage: Q. What is the main advantage of a typical 529 plan? A. Earnings are not subject to federal tax and generally not subject to state tax when used for the qualified education expenses of […]
To calculate the vehicle expenses amount to report on Line 9 of Schedule C (Form 1040) Profit or Loss From Business (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 […]
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 […]
Per IRS Publication 3 Armed Forces’ Tax Guide, page 15: Combat Zone Defined A combat zone is any area the President of the United States designates by Executive order as an area in which the U.S. Armed Forces are engaging or have engaged in combat. An area usually becomes a combat zone and ceases to […]
For military personnel, your permanent residence is generally considered to be your residence when you entered the military. However, if you or your spouse have earned income in the state in which you were stationed, you may need to file a state tax return as a nonresident of that state. You will need to determine […]
Per IRS Publication 3 Armed Forces’ Tax Guide, page 35: Spouse incapacitated. If your spouse can’t sign because of disease or injury and he or she tells you to sign, you can sign your spouse’s name in the proper space on the return, followed by the words “by [your name], Husband (or Wife).” Be sure […]
If you owe a debt to someone else and they cancel or forgive that debt, the canceled amount may be taxable. The Bipartisan Budget Act of 2018 extends the exclusion from gross income of discharge of qualified principal residence indebtedness, which generally allows taxpayers to exclude income from the discharge of debt on their principal […]
To report Form 1099-MISC Miscellaneous Income, Box 12 (if you need help reporting Form 1099-MISC, 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 Box 12 – Section […]
Noncash Charitable Contribution Limit. The TaxAct program currently allows a maximum of 45 entries for noncash charitable contributions. These would be reported on nine Forms 8283 Noncash Charitable Contributions. The total noncash charitable contributions are reported on Federal Schedule A (Form 1040) Itemized Deductions, Line 17 as an itemized deduction. Note that any link in […]
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 […]
A nonrefundable credit can reduce your tax liability to 0 (zero); however, it cannot result in a refund. If, for example, you qualify for a $350 nonrefundable credit and your tax liability is only $200, you will only receive a $200 credit. If your tax liability is zero, you would not receive the credit at […]
Per IRS Instructions for Form 1120-H, page 1: Purpose of Form A homeowners association files Form 1120-H as its income tax return to take advantage of certain tax benefits. These benefits, in effect, allow the association to exclude exempt function income (defined later) from its gross income. Electing to File Form 1120-H A homeowners association […]
If you filed a tax return with a spouse who died in 2022 and you want to change the name of the taxpayer on the refund check, you must file Form 1310 Statement of Person Claiming Refund Due a Deceased Taxpayer. This form can be e-filed with the return. To access Form 1310 in the […]
The TaxAct® program does not support the Heavy Highway Use Tax return on Form 2290 Heavy Highway Vehicle Use Tax Return. This is a separate tax return from Form 1040 U.S. Individual Income Tax Return. You can find it on the IRS website. Related Links Instructions for Form 2290 Note that any link in the information […]
Per Form 8888 Allocation of Refund (Including Savings Bond Purchases), you cannot have your refund deposited into more than one account or buy paper Series I savings bonds if you file Form 8379 Injured Spouse Allocation. Related Links Direct Deposit Direct Deposit Into Multiple Accounts Form 8888 E-Filing – Incorrect Bank Information for Direct Deposit […]
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 […]
Railroad employees have these possible entries in Box 14 of Form W-2 Wage and Tax Statement: RRTA Compensation Tier I Tier II Medicare Tax Additional Medicare Tax If you’re a railroad employee covered by the Railroad Retirement Act (RRTA), these amounts are located in Box 14 with the previous descriptions. Enter the correct amounts for […]
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.
The IRS’s moving expense deduction has been temporarily suspended since 2018. The only exceptions are for active-duty members of the Armed Forces who are required by military order to move because of a permanent change of station. An amount with code “P” will transfer to Line 4 of Form 3903 Moving Expenses for moving expenses. Form 3903 can be […]
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.
Per IRS Instructions for Form 5695: The Consolidated Appropriations Act, 2021: Extends the residential energy efficient property credit to qualified biomass fuel property costs on line 5, and provides definitions in these instructions. Extends the 26 percent residential energy efficient property credit rate to property placed in service in 2021. For property placed into service […]
The TaxAct® program allows the entry of six children on Form 8839 Qualified Adoption Expenses. If you need to enter more than six adopted children, you will need to override some fields in TaxAct and paper file your return. You may only override fields in the TaxAct Desktop (download) program. For Part II of your manually […]
The Patient Protection and Affordable Care Act allows small businesses and tax-exempt organizations to earn a tax credit for providing or maintaining employee health insurance. Starting in 2014, businesses with ten or fewer full-time equivalent (FTE) employees with an average annual salary of $25,000 or less can earn the maximum credit of 50%, while tax-exempt […]
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 […]
The Free Application for Federal Student Aid (FAFSA) worksheet in the TaxAct® program is only used if you choose to print the worksheet for help completing the application on the FAFSA website. If you do not choose to print the worksheet, it will have no effect on your tax return. By default, the worksheet starts […]
The filing requirements for a federal tax return depend on factors such as the taxpayer’s income, the taxpayer’s age and filing status, the age of the spouse on joint returns, if the taxpayer is claimed as a dependent on someone else’s return, earnings from self-employment, and more. The IRS Interactive Tax Assistant (ITA) Do I […]
The TaxAct® program does not support IRS Form 1040-C U.S. Departing Alien Income Tax Return. Form 1040-C is used by aliens who intend to leave the United States or any of its possessions to report income received or expected to be received for the entire tax year, and pay the expected tax liability on that […]
Per IRS Publication 501 Dependents, Standard Deduction, and Filing Information, page 8: Head of Household You may be able to file as head of household if you meet all the following requirements. You are unmarried or considered unmarried on the last day of the year. See Marital Status, earlier, and Considered Unmarried, later. You paid […]
For purposes of calculating the Earned Income Credit (EIC), unemployment is not included in earned income but is included in Adjusted Gross Income (AGI). If your AGI results in a lower EIC, you must use that amount. The TaxAct® program will automatically do this calculation for you on the Form 1040 Earned Income Credit Worksheet. […]
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 […]
Tax Reform Update Most of the miscellaneous itemized deductions you may have claimed in the past have been suspended. These deductions include: Unreimbursed employee expenses (travel expenses, dues/licenses, tools/supplies, education, etc.) Expenses related to the collection of income (investment fees, safe deposit box rental, tax advice, etc.) Tax preparation fees
If you are claimed as a dependent on someone else’s tax return (such as your parent’s), then your qualifying educational expenses can only be used on your parent’s return. Your return would not qualify for the education credits or deduction on your own return, because you are claimed as a dependent on another taxpayer’s return. […]
Per IRS Publication 17, page 8: Who Should File Even if you don’t have to file, you should file a federal income tax return to get money back if any of the following conditions apply. 5. You qualify for the health coverage tax credit. See Form 8885, Health Coverage Tax Credit, and its instructions, for […]
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 […]
If your dependent receives a Form SSA-1099, you are not supposed to report it on your tax return. Your dependent needs to report the SSA-1099 on their own tax return (if they are required to file). If you need help reporting Form SSA-1099, go to our Forms SSA-1099 and RRB-1099 – Entering Social Security or […]
Per IRS Frequently Asked Questions Dependents webpage: Question: My child was stillborn. May I claim my child as a dependent on my tax return? Answer: In order to claim a newborn child as a dependent, state or local law must treat the child as having been born alive, and there must be proof of a […]
If you list a child in the process of being adopted as a dependent on your tax return, you need to provide a valid Adoption Taxpayer Identification Number (ATIN) in order to file. If you have not received the ATIN for your child yet, there are two options: File for an extension with Form 4868 Application […]
Per IRS Publication 501 Dependents, Standard Deduction, and Filing Information, page 11: Tests To Be a Qualifying Relative The person can’t be your qualifying child or the qualifying child of any other taxpayer. The person either (a) must be related to you in one of the ways listed under Relatives who don’t have to live […]
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 […]
The TaxAct® Online program supports up to 50 entries on the Detailed Information for Contributions of cash or check in the Charitable Contributions section of the Itemized Deductions.
The TaxAct® Desktop and Professional programs support up to 250 entries on the Detailed Information for Contributions of cash or check in the Charitable Contributions section of the Itemized Deductions. Related Links Charitable – Entering Contributions and Donations in Program
There is a limitation for charitable contributions as an itemized deduction on Schedule A (Form 1040) Itemized Deductions. The charitable contribution amounts are reported on Schedule A, Lines 11, 12, 13, and 14. The contribution limitation on Line 14 is computed on the Charitable Contribution Limitation Worksheet. Contributions are compared with the adjusted gross income […]
Per IRS Form 8924, page 1: Who Must File An eligible entity who subsequently transfers ownership or possession (by sale, exchange, or lease) of a qualifying mineral or geothermal interest must file Form 8924 for each transfer of an interest acquired, directly or indirectly, in: A conservation sale in which the previous transferor excluded 25% […]
Commercial revitalization is the rehabilitation of a building in a distressed community. Prior year unallowed commercial revitalization deduction (CRD). If you have prior year unallowed CRDs limited by the passive loss rules, you may continue to include them in the calculations as shown in the Form 8582 Instructions In the TaxAct® program, any CRD entered […]
To see which fuel credits are still available, go to IRS Instructions for Form 4136 Credit for Federal Tax Paid on Fuels. Go to IRS Publication 510 Excise Taxes (Including Fuel Tax Credits and Refunds) for definitions and information on nontaxable uses. The IRS will not begin accepting 2025 returns that include Form 4136 until February […]
If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. Your employer can tell you whether your benefit plan qualifies. The amount you can exclude is limited to the smallest of: The total amount of dependent care benefits you received during the year, […]
One of the eligibility requirements for the child and dependent care credit states that the childcare must be provided so you (and your spouse if filing jointly) could work or look for work. However, if your spouse did not have a job and had no earned income, you still may take the credit if he […]
To review your child tax credit and additional child tax credit in the TaxAct program, go to our Dependents – Entering and Reviewing FAQ. The TaxAct program automatically calculates your credit amount based on your dependent and income information. Some taxpayers cannot take full advantage of the child tax credit because their credit amount is […]
The Child Tax Credit is a nonrefundable credit. This means if your tax liability is $0, you will not receive this credit because there is no tax to reduce. However, you may receive an additional child tax credit calculated on Schedule 8812 Additional Child Tax Credit and reported on Line 28 of IRS Form 1040 […]
TaxAct® requests a valid Social Security Number (SSN) be entered in order for certain credits and deductions to calculate (i.e. child tax credit, other dependent credit, etc.). If you have applied for and are currently waiting to receive the child’s new SSN, you may either: Electronically file the return without the dependent, and then file […]
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 […]
The TaxAct® program supports the preparation of business tax returns, but not the employer reporting forms (example: Form 941, Form 944, Form 940, Form 945, Form 8027, or Form 5500). You can access the forms and other information through the IRS: IRS Publication 15 Publication 15 (Circular E), Employer’s Tax Guide Publication 15-A Employer’s Supplemental Tax […]
When using Form 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts and you incur a net capital loss, by law this loss is limited to $3,000 for the tax year. When TaxAct® calculates your annualized income on Line 3 of Schedule AI and you are claiming a net capital loss, this loss limitation […]
The TaxAct program no longer supports the creation of FinCEN Form 114 (FBAR) as of tax year 2019. Since this is a Bank Secrecy Act (BSA) form, it is not processed by the IRS. You can fill out and e-file the form through the BSA E-Filing System. If you own a foreign bank account, brokerage […]
Per IRS Publication 908 Bankruptcy Tax Guide, page 3: Individuals in Chapter 12 or 13 Only individuals may file a chapter 13 bankruptcy. Chapter 13 relief isn’t available to corporations or partnerships. The bankruptcy estate is not treated as a separate entity for tax purposes when an individual files a petition under chapter 12 (Adjustment […]
Per IRS Publication 908 Bankruptcy Tax Guide, page 2: Bankruptcy proceedings begin with the filing of either a voluntary petition in the United States Bankruptcy Court, or in certain cases an involuntary petition filed by creditors. This filing creates the bankruptcy estate. The bankruptcy estate generally consists of all of the assets the individual or […]
Per IRS Publication 908 Bankruptcy Tax Guide, page 2: CAUTION! This publication isn’t intended to cover bankruptcy law in general, or to provide detailed discussions of the tax rules for the more complex corporate bankruptcy reorganizations or other highly technical transactions. Page 3: Individuals in Chapter 7 or 11 When an individual debtor files for […]
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, […]
Two tax credits that can help you offset the cost of higher education are the American Opportunity Credit and the Lifetime Learning Credit. American Opportunity Credit You may be able to take a credit of up to $2,500 for qualified education expenses for each student who qualifies for the American opportunity credit. This credit equals […]
Form 1125-E Compensation of Officers, must be completed and attached to Forms 1120, 1120-C, 1120-F, 1120-RIC, 1120-REIT, or 1120-S, if the entity has total receipts of $500,000 or more and deducts compensation of officers. Related Links Instructions for Form 1125-E Note that any link in the information above is updated each year automatically and will […]
Enter the deductible officers’ compensation on IRS Form 1125-E Compensation of Officers. Do not include compensation deductible elsewhere on the return, such as amounts included in Cost of Goods Sold (COGS), elective contributions to a section 401(k) cash or deferred arrangements, or amounts contributed under a salary reduction, SEP agreement, or a SIMPLE IRA plan. Note […]
Per IRS Instructions for Form 1120, page 11: Reducing certain expenses for which credits are allowable. If the corporation claims certain credits, it may need to reduce the otherwise allowable deductions for expenses used to figure the credit. This applies to credits such as the following. Work opportunity credit (Form 5884). Employee retention credit (Form […]
Per IRS Partner’s Instructions for Schedule K-1 (Form 1065), page 1: Purpose of Schedule K-1 The partnership uses Schedule K-1 to report your share of the partnership’s income, deductions, credits, etc. Keep it for your records. Do not file it with your tax return unless you are specifically required to do so. (See the instructions […]
TaxAct? will allocate the distributive items reported on Schedule K (Form 1065) Partners – Distributive Share Items (on page 4) to each of the partners according to their weighted percentage of ownership. Their weighted percentage is computed on a daily basis. Enter each partner’s ownership percentage at the beginning of the year through the K-1 Wizard during the Q&A.
Per IRS Instructions for Form 1120-S, page 22: Schedule K Schedule K is a summary schedule of all shareholders’ shares of the corporation’s income, deductions, credits, etc. All corporations must complete Schedule K. Note that any link in the information above is updated each year automatically and will take you to the most recent version of the […]
Per IRS Instructions for Form 1120-S, page 22: Schedule K. Schedule K-1 shows each shareholder’s separate share. Attach a copy of each Schedule K-1 to the Form 1120-S filed with the IRS. Keep a copy for the corporation’s records and give each shareholder a copy. Give each shareholder a copy of the Shareholder’s Instructions for […]
TaxAct will allocate each shareholder’s pro rata share of the distributive items reported on Schedule K (Form 1120-S) Shareholders -Pro Rata Share Items (on page 3) according to their stock ownership. Ownership is computed on a daily basis. Enter each shareholder’s stock ownership at the beginning of the year through the K-1 Wizard from within your TaxAct Return during […]
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 […]
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 […]
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 […]
When you submit your e-filed return, TaxAct immediately begins transmitting the return to the IRS and/or your state tax agency. So, once you submit a return electronically, there is no way to stop or cancel that transmission. If you made a mistake or forgot to include something: If your return is rejected, you can go […]
The statute of limitations for saving Federal returns is generally three years after the date the return is filed. Returns filed before the federal filing deadline are considered filed on the due date of the return. Per the IRS How long should I keep records? webpage: The length of time you should keep a document […]
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 […]
If you need to submit certain forms (or attachments) with your return, you are still able to e-file. However, you will need to complete and mail in Form 8453 U.S. Individual Income Tax Transmittal for an IRS e-file Return along with the forms or attachments. Acceptable attachments to Form 8453 include Form 1098-C Contributions of […]
Preparers must apply to obtain an Electronic Filing Identification Number (EFIN) and become an Authorized e-file Provider. This application can be completed online through the IRS E-file for Tax Professionals webpage. If you need assistance, call the IRS e-help Desk number for electronic filing issues: 1-866-255-0654 (toll free), (if outside of the 50 U.S. states […]
The amount of your nontaxable combat pay should be shown on your Form W-2 Wage and Tax Statement, Box 12, code “Q.” For information about how to report this in your TaxAct return, go to our Form W-2 – E-Filing with Nontaxable Combat Pay FAQ. Per IRS Publication 3 Armed Forces’ Tax Guide, page 24: […]
To deduct expenses related to the business use of part of your home, you must meet specific requirements. Even then, your deduction may be limited. To qualify to claim expenses for business use of your home, you must meet both of the following tests. Your use of the business part of your home must be […]
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary. Even though an […]
Per IRS Publication 526 Charitable Contributions, page 2: A charitable contribution is a donation or gift to, or for the use of, a qualified organization. It is voluntary and is made without getting, or expecting to get, anything of equal value. Organizations That Qualify To Receive Deductible Contributions You can deduct your contributions only if […]
Per IRS Publication 590-A Contributions to Individual Retirement Arrangements (IRAs), page 38: How Much Can Be Contributed? The contribution limit for Roth IRAs generally depends on whether contributions are made only to Roth IRAs or to both traditional IRAs and Roth IRAs. Roth IRAs only. If contributions are made only to Roth IRAs, your contribution […]
TaxAct offers products which handle tax return preparation for Individual, Estates and Trusts, Partnership, S Corporation, C Corporation, and Tax-Exempt Organization returns (1040, 1040-NR, 1040-SR, 1041, 1065, 1120-S, 1120, and 990): TaxAct Federal 1040 for Sole Proprietorship returns. TaxAct Federal 1040-NR for Sole Proprietorship returns. TaxAct Federal 1041 for Estate and Trust returns. TaxAct Professional […]
The Patient Protection and Affordable Care Act (PPACA), commonly termed the Affordable Care Act (ACA) or “Obamacare”, is a federal statute which was signed into law by President Barack Obama on March 23, 2010. Due to this law impacting so many people, there are a number of IRS websites providing information: Affordable Care Act (ACA) […]
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 […]
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 […]
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 […]
See IRS Instructions for Schedule A (Form 1040) Itemized Deductions, for limits on deductions for 2024: Limitations apply to: State and local taxes Home mortgage interest deduction Casualty and theft losses Some charitable contributions Deductions eliminated in 2018 that have not been brought back: Most miscellaneous itemized deductions Note that any link in the information above is […]
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 […]
Even if your student hasn’t graduated from high school, you still may be able to get an education credit for the child’s college-level classes. The student qualifies for the tuition deduction if he or she is enrolled at an eligible school. You must have paid tuition to the college and not the high school in […]
A homeowners association, or HOA, is either a condominium management association, a residential real estate management association, or a timeshare association. An HOA may elect to file Form 1120-H U.S. Income Tax Return for Homeowners Associations as its income tax return, in order to take advantage of certain tax benefits. These benefits, in effect, allow […]
There are different partner types allowed in the formation of a partnership, as allowed per IRS guidelines. A partner classification must be selected on each partner’s Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc. within TaxAct® to calculate the partner’s reportable items correctly. Below is an explanation of these partner classifications. General […]
Partner guaranteed payments are reported on each partner’s Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc. Partnerships may deduct payments or credits to a partner for services or for the use of capital if the payments or credits are determined without regard to partnership income and are allocable to a trade or business activity. […]
Partners’ capital accounts are accounts that show the partners’ equity in the partnership. The partners’ capital accounts include the following items: Contributions made to the partnership by the partners, either in the form of cash or property, increase the capital accounts; Guaranteed payments by the partnership to the partners increase the capital accounts; Profits or […]
Partnerships with foreign partners may be required to make Section 1446 withholding payments. Generally, if a partnership has taxable income effectively connected with the conduct of a trade or business within the United States that is allocable to a foreign partner, the IRS requires the partnership to report and pay a withholding tax under IRC Section […]
The purpose of Schedule M-1 Reconciliation of Income (Loss) and Analysis of Unappropriated Retained Earnings per Books is to reconcile the entity’s accounting income (book income) with its taxable income. Because tax law is generally different from book reporting requirements, book income can differ from taxable income. Here is a list of common book-tax differences […]
If you use a geothermal pump, solar panels, solar water heater, small wind energy system, or fuel cells, you may be able to continue claiming residential energy credits from the use of such devices on future tax returns. Residential energy credits should be claimed on Form 5695. Access current and prior-year versions of Form 5695 on […]
The following taxpayers are not eligible to use the Self-Select Pin method and need to mail a paper return: Primary taxpayers under age 16 who have never filed. Secondary taxpayers (spouse) under age 16 who did not file in the prior year.
IF the noncustodial parent qualifies, they can claim: claim the child as a dependent the child tax credit for the child (up to $2,000) ONLY the custodial parent can claim: head of household filing status due to that child earned income credit due to that child the credit for child and dependent care expenses the […]
If you electronically filed your New York return and the return was rejected for a Form W-2 Wage and Tax Statement error, you should check the W-2 and correct any input error(s). If no input error was found, please call New York State’s e-file help desk at 1-518-457-6387. They will provide you with the information […]
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 […]
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 […]
If you e-file your tax return, you can use EFW to make up to four (4) estimated tax payments. This is a free option. The payments can be withdrawn from either a checking or savings account. At the same time you file your return, you can schedule estimated tax payments for any or all of […]
The TaxAct program supports IRS Form 1041 U.S. Income Tax Return for Estates and Trusts, but not Form 706 United States Estate (and Generation-Skipping Transfer) Tax Return, which is a separate return from the estate income tax return. Related Links Instructions for Form 706 Publication 559 Survivors, Executors, and Administrators Note that any link in […]
If you realize a net business loss on Schedule C (Form 1040) Profit or Loss From Business, you are not required to file Schedule SE (Form 1040) Self-Employment Tax or pay self-employment taxes. However, the IRS does provide an optional self-employment tax calculation method which may give you credit toward Social Security without increasing your […]
Before you can prepare your state return, you need to prepare your federal return. The federal return data will transfer to your state return, and the State Q&A interview section will prompt you for information specific to your state. To add a state return, go to our States – Adding or Removing Return FAQ. Related […]
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 […]
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. […]
If you report a self-employment tax adjustment on Schedule SE (Form 1040) Self-Employment Tax, the TaxAct® program will automatically utilize Section B – Long Schedule SE. To enter or review a self-employment tax adjustment, go to our Schedule SE – Adjustments FAQ. Related Links Instructions for Schedule SE Self Employment Tax Note that any link […]
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, […]
The Tax Cuts and Jobs Act of 2018 suspended most of the itemized deductions you may have claimed in the past. Rental fees for safe deposit boxes are no longer deductible. Related Links Instructions for Schedule A Itemized Deductions Note that any link in the information above is updated each year automatically and will take […]
Due to tax reform, the deduction for uniform expenses not covered by your employer has been eliminated for tax years 2018-2025.
Tax reform eliminated the deduction for union dues for tax years 2018-2025. Per IRS Publication 529 Miscellaneous Deductions: This publication explains that you can no longer claim any miscellaneous itemized deductions, unless you fall into one of the qualified categories of employment claiming a deduction relating to unreimbursed employee expenses. Miscellaneous itemized deductions are those […]
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 […]
Note: Losses you Can deduct for tax years 2018 through 2025: if you are an individual, losses of personal-use property from fire, storm, shipwreck, or other casualty, or theft are deductible only if the loss is attributable to a federally declared disaster (federal casualty loss). See Pub. 547 for more information. If the event causing […]
The Federal Tax Calculator is a powerful tool available in the TaxAct® program that helps customers perform “what-if” scenarios for future tax years. If you need help accessing the Tax Calculator, go to our Tax Calculator FAQ. Keep in mind that the Tax Calculator is a report for taxpayers to project their earnings and expenses […]
Excess housing allowance is generated when the housing allowance the clergy member received from the church or organization is more than the amount actually used to provide a home. If you need more information refer to IRS Publication 517 Social Security and Other Information for Members of the Clergy and Religious Workers. If you need […]
To enter the death of a taxpayer or spouse in the TaxAct® program, go to our Death of Taxpayer Prior to Filing Return FAQ. If both the taxpayer and spouse are entered as deceased, the TaxAct program will show the name and date of death for both at the top of the federal return. The representative […]
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 […]
If your dependent has two last names or a hyphenated last name, both last names need to be entered in the last name data entry field as it appears on their social security card. If the social security card has a middle initial/name on it, that will need to be entered after the first name […]
In the federal section of the interview process, you will report your Form W-2 Wage and Tax Statement information in the TaxAct program. The state withholding amounts will flow to your state return in addition to your federal return. Fill out Form W-2 in your TaxAct return, and enter your State Taxes and Local Taxes […]
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 […]
For tax years 2018 – 2025, the following occupations can take this deduction: Armed Forces reservist Qualified performing artist Fee-basis state or local government official Employees with impairment-related work expenses To access the home office expenses section, go to our Form 2106 – Entering Unreimbursed Employee Expenses in Program FAQ. Related Links Business – Use […]
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 […]
Form 1098-T should be sent for anyone who had education expenses or received scholarships, fellowships, or grants. If you, your spouse, or your dependent had education expenses and did not receive Form 1098-T, you may need to still report the amounts on the return. If your expenses are more than your scholarships, fellowships, and grants, you may […]
A “technical termination” occurs when there is a sale or exchange of 50% or more of the total interests in a partnership’s capital and profits within a 12-month period. The partners may not have intended to terminate the partnership; even so, it is considered “technical” and is legally recognized as the end of one partnership […]
All 50 States, Washington D.C., and five U.S. territories had an ENERGY STAR Appliance Rebate program in 2010. A few states still have active programs. For specific information for each state, go to the ENERGY STAR Rebate Finder webpage. For information on residential energy credits, go to our Energy Star Federal Tax Credits for Energy Efficiency FAQ. […]
Per IRS Instructions for Form W-2, page 7: Instructions for Employee Box 10. This amount includes the total dependent care benefits that your employer paid to you or incurred on your behalf (including amounts from a section 125 (cafeteria) plan). Any amount over $5,000 is also included in box 1. Complete Form 2441, Child and […]
The amount of dependent care benefits you can exclude or deduct is limited to the smallest of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse’s earned income, or $5,000 ($2,500 if married filing separately) Any […]
You can elect to have someone of your choosing discuss your federal tax return with the IRS by completing the Third Party Designee section. To enter the Third Party Designee in the TaxAct® program: From within your TaxAct return (Online or Desktop), click Federal (on smaller devices, click in the top left corner of your […]
The TaxAct® program will not always calculate all the possible preference items from the list on Form 6251 Alternative Minimum Tax—Individuals. Checking or unchecking certain boxes will affect the calculations on Form 6251. To access Form 6251, go to our Form 6251 – Alternative Minimum Tax – AMT FAQ. Note that any link in the information above […]
If you are completing the parents’ return, DO NOT enter the information for Form 8615 Tax for Certain Children Who Have Unearned Income but DO complete Form 8814 Parents’ Election To Report Child’s Interest and Dividends. To enter information for the child’s return (Form 8615): From within your TaxAct return (Online or Desktop), click Federal […]
The Form 1099-INT Interest Income or Form 1099-OID Original Issue Discount you received will show the amount of any penalty you were charged. The TaxAct program will transfer the information to line 22 of Schedule 1 (Form 1040) Additional Income and Adjustments to Income after you report it on Form 1099-INT or Form 1099-OID. To […]
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 […]
Per IRS Publication 936: Home mortgage interest. You can deduct home mortgage interest on the first $750,000 ($375,000 if married filing separately) of indebtedness. However, higher limitations ($1 million ($500,000 if married filing separately)) apply if you are deducting mortgage interest from indebtedness incurred before December 16, 2017. The TaxAct® program does not calculate for […]
Per IRS Publication 936, page 4: Late payment charge on mortgage payment. You can deduct as home mortgage interest a late payment charge if it wasn’t for a specific service performed in connection with your mortgage loan. To enter home mortgage interest in the TaxAct program, go to our Form 1098 – Entering in Program […]
A qualified tuition program (also known as a 529 plan) is a program set up to allow you to either prepay or contribute to an account established for paying a student’s qualified education expenses at an eligible educational institution. Your state government or eligible educational institution can tell you whether or not they participate in […]
If you claimed the First-time Homebuyer Credit, there are certain situations (e.g. if the home ceases to be your main residence within a three-year period following the date of purchase) in which you may need to repay the credit in full. To access repayment of first-time homebuyer credit in the TaxAct program, go to our […]
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 […]
Identity theft occurs when someone uses your personal information to file a fraudulent tax return. Usually, the tax return is filed with your name, Social Security Number (SSN), and other identifying information in an attempt to obtain a fraudulent refund. Be alert to possible identity theft if you receive an IRS notice or letter that […]
Before you file your current year’s tax return, you should make sure you have all necessary documents including Form W-2 Wage and Tax Statement. You should receive a Form W-2 from each of your employers. Employers have until January 31, 2025, to send you a 2024 Form W-2 earnings statement. If you haven’t received your W-2, […]
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 […]
TaxAct® will automatically calculate the earned income credit based on the information entered in your return. If you qualify for the credit, the amount will be included as a payment on your Federal Tax Summary. You must enter your income and dependent information before the credit can calculate. To enter or review your earned income […]
Below you will find information to help you determine if you are eligible to file your tax return with the filing status of Head of Household. If necessary, review IRS Publication 17 Your Federal Income Tax (For Individuals) for additional details before making a final determination. You can also go to the IRS Interactive Tax […]
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 […]
Per the IRS instructions, a domestic partnership does not need to complete and file with the IRS Schedules K-2 and K-3 or furnish to the partner(s) their Schedule K-3 if each of the following 4 criteria are met: No or limited foreign activity Foreign activity is defined as Foreign income taxes paid or accrued, Foreign […]
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 […]
What is the Recovery Rebate Credit? The Recovery Rebate Credit was added to 2020 individual tax returns in order to reconcile the Economic Impact (stimulus) Payments issued in 2020 and 2021. You will record the amount you received in stimulus funds, if any, on Form 1040 U.S. Individual Income Tax Return, Line 30. By completing […]
The Oregon surplus credit, known as the “kicker,” is a way for state government to return some of your taxes to you when revenues are more than predicted. The Oregon Department of Administrative Services determines whether there is a surplus and the amount to be returned to taxpayers as a kicker. If there’s a surplus, […]
Georgia HB 1302 was signed March 23, 2022. This bill will provide a one-time tax refund for Georgia taxpayers who filed tax returns for both the 2020 and 2021 tax years. Taxpayers who have already filed their Georgia tax return The Georgia Department of Revenue will automatically update your account and will send the refund […]
If you received advance Child Tax Credit (CTC) monthly payments last year, you should be getting Letter 6419 from the IRS. This letter details the total advance payments you received last year and lets you know how much of the credit you can still expect to claim when filing your 2021 tax return. However, the […]
What is the Recovery Rebate Credit? The Recovery Rebate Credit was added to 2020 individual tax returns in order to reconcile the Economic Impact (stimulus) Payments issued in 2020. You will record the amount you received in stimulus funds, if any, on Form 1040 U.S. Individual Income Tax Return, Line 30. If you received the […]
This amended return cannot be filed electronically. Please repeat the Filing steps to print and file a paper amended return. This business rule is triggered for any of the following reasons: The filing status on the original return differs from the amended return. The original return was not e-filed and accepted. The original return must […]
The Illinois Invest In Kids Scholarship Tax Credit Program offers a 75% income tax credit to individuals and businesses that contribute to qualified Scholarship Granting Organizations (SGOs). To enter the Invest in Kids Scholarship Tax Credit: From within your TaxAct return (Online or Desktop), click State to expand, then click Illinois (or IL). On smaller […]
The American Rescue Plan, signed into law on March 11, 2021, includes a provision that makes the first $10,200 of unemployment nontaxable for each taxpayer who made less than $150,000 in 2020. If you are married, and your spouse also received unemployment, both of you can exclude $10,200. What if I filed my 2020 return […]
What if I wasn’t required to file a tax return in 2020? The IRS has created a non-filer sign-up tool to help you submit your claim. If you did not file a 2020 return but still plan to, do not use this tool; instead, file your 2020 return as planned. I filed a return in […]
The American Rescue Plan of 2021 includes three provisions that may impact taxpayers with children: Child Care and Development Block Grant Child and Dependent Care Tax Credit Expansion Paid Leave Tax Credit For more details on each of these provisions, go to the White House Fact Sheet webpage, published June 11, 2021. Related Links Child Tax Credit: […]
Are PPP loan proceeds taxable income on my tax return if my PPP loan was forgiven under COVID-19 relief? No. Loan proceeds received under the Paycheck Protection Program (PPP) are not taxable income, regardless if the loan was forgiven or not. Forgiven PPP loans are not considered cancellation of debt income, and as such, you […]
The American Rescue Plan, signed into law on March 11, 2021, includes a provision that eliminates the requirement to repay excess advance premium tax credits for tax year 2020. Put simply, you won’t owe the IRS anything if you received more PTC that you were eligible for. When was the TaxAct program updated for this […]
Line 30 of the Form 1040 is calculated based on entries the taxpayer has entered for the amounts received for EIP1 (Economic Impact Payment #1) and EIP2. If the amount entered as received differs from the amount of credit available, which is based on the filing status and number of dependents claimed on the return, […]
The American Rescue Plan Act of 2021 was signed into law by President Biden on March 11, 2021. For details on what this means for you, visit our Third Stimulus Payment Frequently Asked Questions page. The American Rescue Plan includes the following tax provisions: Individuals earning $75,000 or less AGI per year will receive $1,400 […]
The IRS has created several tax credits for small business to help them deal with the impacts from the COVID-19 pandemic. Credits related to offering sick pay and family leave due to COVID-19 are reported on IRS Form 7202 Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals Per IRS Instructions for Form […]
At TaxAct, we know you have a lot of questions about stimulus payments. In response, we have created Stimulus Center, where you can find the answers you need. You can find information about previous stimulus payments as well as the latest, third round of payments. Please visit the Stimulus Center often, as changes are happening […]
To enter or review Form 8915-E in the TaxAct program: From within your TaxAct return (Online or Desktop), click Federal (on smaller devices, click in the top left corner of your screen, then click Federal). Click the Retirement Plan Income dropdown, click the Disaster Distributions dropdown, then click [Name] Qualified 2020 disaster retirement plan distributions […]
How does the IRS get my bank information for any 2021 stimulus payments? If the IRS issues additional stimulus payments in 2021, direct deposit will be the fastest way to get your money. The IRS will obtain your direct deposit bank account information from the most recent tax return filed. So, if you are getting […]
Some Vermont taxpayers may have received incorrect 1099Gs recently, which prompted the Vermont Department of Labor to recall all 1099s. 1099s will be reissued and taxpayers asked to return the incorrect documents. Please note that this only affects 1099Gs issued by VDOL and not those issued by the Vermont Department of Taxes. If you received […]
Per IRS Form 8919, you must file this form if all of the following apply. You performed services for a firm. You believe your pay from the firm wasn’t for services as an independent contractor. The firm didn’t withhold your share of social security and Medicare taxes from your pay. One of the reasons listed […]
The TaxAct 2020 Professional and Consumer 1040 Editions include the ability to import state withholding numbers from a W-2, for those states that allow it. States that do not allow year to year transfer of withholding numbers include: Alabama Arizona Connecticut Idaho Illinois Indiana Iowa Kentucky Maryland Minnesota North Dakota South Carolina Virginia West Virginia […]
Tax Reform Update: Employee business expenses can be claimed only by Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses. If you were partially reimbursed for your employee business miles, your total business miles and reimbursements for the current year are entered on Form 2106 Employee […]
Some states have chosen to fully adopt the tax provisions included in the Federal Further Consolidated Appropriations Act (FCAA) and Coronavirus Aid, Relief, and Economic Security (CARES) ACT. Others, like North Carolina, have chosen to adopt only some of those provisions. Because this “decoupling” occurred very late in the tax season, you may need to […]
You can check the status of your paper or electronically-filed amended return Form 1040-X using the Where’s My Amended Return? (WMAR) online tool or the toll-free telephone number 866-464-2050 three weeks after you file your amended return. Both tools are available in English and Spanish and track the status of amended returns for the current […]
Where is my Adjusted Gross Income (AGI) located on my prior year return? Form 1040 U.S. Individual Income Tax Return, Line 11 – (round amount to the nearest dollar) If you used TaxAct Desktop to file the return, you can find the return file on your computer. Go to our Consumer Editions – Locating Return […]
Last updated: 4/13/2020 Additional COVID-19 response topics TaxAct Stimulus Registration | COVID-19 and your Taxes page | COVID-19 Response: IRS Extends Time to File and Pay Tax Bill | COVID-19 Response: State Deadlines Extended | Everything You Need to Know About the Stimulus Payments | IRS Filing and Payment Deadlines Questions and Answers | IRS […]
Generally, a corporation must file its income tax return by the 15th day of the fourth month after the end of its tax year. A new corporation filing a short-period return must generally file by the 15th day of the fourth month after the short period ends. A corporation that has dissolved must generally file […]
Per the PA Department of Revenue What taxes are imposed on a local level? webpage: Local taxes are not administered by the PA Department of Revenue, but by local tax authorities in each area. For a list and brief description of local taxes which can possibly be levied by a municipality (i.e. borough, township, or city), school […]
Use IRS Form 9465 Installment Agreement Request to request a monthly installment plan if you can’t pay your full tax due amount. The IRS encourages you to pay a portion of the amount you owe and then request an installment for the remaining balance. Form 9465 is available in all versions of TaxAct®. You can file Form 9465 […]
For tax years beginning on or after January 1, 2016, all taxpayers and tax preparers must file Corporation Business Tax (CBT) returns and make payments electronically. This mandate includes all returns, estimated payments, extensions, and vouchers and is being enforced by the state. TaxAct will still allow taxpayers and tax preparers to print New Jersey […]
Per IRS Publication 559 Survivors, Executors, and Administrators, page 25: The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts aren’t taxable gifts. Gifts, excluding gifts of future interests, that aren’t more than the annual exclusion for the calendar year. Tuition or medical expenses […]
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 […]
The BluPrint Financial Savings Report is no longer available.
Per the VA Tax 2019 Virginia Tax Relief Refund webpage: Who’s eligible? You’re eligible for the 2019 Tax Relief Refund if: You filed a 2018 Virginia individual resident, nonresident, or part year resident income tax return by July 1, 2019; and You have a 2018 tax liability in Virginia. Why are we sending these refunds? […]
On December 22, 2017, President Trump signed into law Public Law 115-97, Tax Cuts and Jobs Act (clicking the link will allow you to review the entire bill from the U.S. Government Printing Office website). TaxAct’s 2018 Tax Calculator reflects the difference in estimated taxes based on the tax reform rules (calculated on the information you enter in the calculator). […]
IRS Form 8990, Limitation on Business Interest Expense Under Section 163(j) may be required for Forms 1065, 1120 and 1120s depending on how you answer one question on Schedule B. Although TaxAct does not support IRS Form 8990, you can still prepare and e-file your return in TaxAct. You will need to attach Form 8990 to your return in […]
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 […]
TaxAct® supports the creation of FinCEN Form 114 (FBAR); however, it must be filed separately from your income tax return with the Financial Crimes Enforcement Network (FinCEN). Since this is a Bank Secrecy Act (BSA) form, it is not processed by the IRS. Additionally, TaxAct does not support the e-filing of this form. Beginning July […]
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 […]
If you have already successfully imported your accounting records via CSV file and find you need to make an adjustment, you can re-import the accounting records. Re-Importing the trial balance will override all previous data imported through the Accounting Records Import. If you know which item needs adjusting, you can review the Examiner screens under […]
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 […]
Each shareholder’s distribution amount for the corporation’s fiscal year should be reported on Schedule K-1 (Form 1120-S) Shareholder’s Share of Income, Deductions, Credits, etc., Line 16, with “D” as the reference code. When the shareholder follows the IRS Shareholder’s Instructions for Schedule K-1 (Form 1120-S), this amount will not flow through to his income tax return as […]
TaxAct does not support the electronic filing of an estate or trust return for the state of Virginia for the 2017 tax season. The state of Virginia has a requirement that the Trust and Estate return must be submitted electronically. In cases where the software does not support this, they have created Form 770, Waiver […]
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 […]
For tax year 2017, e-file for Alabama 1041, 1065, 1120, or 1120S returns is unavailable in TaxAct. We regret this inconvenience and we will offer this option again next year. Alabama does impose an e-file mandate for some fiduciary, partnership, and corporation returns, but many can still paper file. Whether you are preparing a fiduciary, […]
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 […]
Effective 2020 and later, Mortgage Insurance Premiums are no longer deductible.
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 […]
On February 9, 2018, President Trump signed the Bipartisan Budget Act of 2018. Division D, Title I of this Act details the extension of expiring provisions. Although these are federal provisions, they may have an impact on your state filing. We will release updates to all states affected in a timely manner once the IRS […]
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 […]
An individual can claim their spouse’s exemption if using the filing status Head of Household or Married Filing Separately, and only when specific conditions are met. In the TaxAct® program, this entry is made on the screen titled Spouse Exemption in the Basic Info section. Per IRS Instructions for Form 1040, page 15: Line 6b – […]
For tax year 2023, the Alternative Minimum Tax Exemption amounts increased to $126,500 for married filing jointly or qualifying widow(er) status, $81,300 for single and head of household status, $63,250 for a married filing separately, and $28,400 for estates and trusts. In addition, nonrefundable credits are allowed against AMT. Comparable rates by year: Year Married […]
If you need to remove the spouse exemption on your return: From within your TaxAct® return (Online or Desktop) click on the Federal tab. On smaller devices, click in the upper left-hand corner, then select Federal. Click Basic Information to expand the category, then click Name and Address Continue to the screen titled Spouse TEMPORARILY […]
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 […]
Form 5498 IRA Contribution Information is information for your personal records and is not required to prepare your tax return. Taxpayers should retain this information for their personal records, but there are no tax consequences to the taxpayer until the funds are distributed from the account. When distributions are made, they are then reported on […]
You can prepare a state tax return in TaxAct® desktop software or TaxAct Online. Most of the information required for your state return is entered in the Federal tab and flows to the state return. The State tab then prompts you for additional information specific to your state. You must complete the Federal tab to […]
The worksheet in the TaxAct® program titled Form 6251 – Home Mortgage Interest Adjustment Worksheet – Line 4 calculates the amount to transfer to Line 4 of IRS Form 6251 Alternative Minimum Tax – Individuals as an adjustment to the AMT tax calculated. To view the worksheet in TaxAct Online: Sign in to your TaxAct Online return Click the My […]
Per IRS Instruction 1040, page 78: Death of a Taxpayer If a taxpayer died before filing a return for 2023, the taxpayer’s spouse or personal representative may have to file and sign a return for that taxpayer. A personal representative can be an executor, administrator, or anyone who is in charge of the deceased taxpayer’s […]
If you cannot get a W-2 from your employer, you can file Form 4852 Substitute for Form W-2, Wage and Tax Statement. TaxAct does not provide Form 4852, so you’ll need to print a hard copy of your return, attach Form 4852, and mail it to the IRS. To submit a substitute for Form W-2: Download and […]
The Earned Income Credit amounts have increased slightly for the 2018 tax year. The maximum amount of earned income and adjusted gross income (AGI) must be less than: $49,194 ($54,484 if married filing jointly) with three or more qualifying children $45,802 ($51,492 if married filing jointly) with two qualifying children $40,320 ($46,010 if married filing […]
If you need to remove the spouse exemption on your return, and you do not see the related screen in the Q&A, the following steps will help: From within your TaxAct® return (Online or Desktop), click on the Federal tab. On smaller devices, click in the upper left-hand corner, then select Federal. Click Basic Information to […]
In the TaxAct program, all information entered on the federal return flows to the attached state return(s). If taxpayers need to file using one filing status on the federal return (e.g. Single), and a different filing status on the state form (e.g. Registered Domestic Partner or Civil Union), it is not possible to have this filing […]
IRS Publication 555 Community Property outlines the requirements for filing the federal tax return for married filing separate spouses, California or Washington same-sex spouses, or registered domestic partners (RDPs) domiciled in Nevada, Washington, or California. See the publication for additional details and definitions. TaxAct supports the completion of these returns so they can be e-filed. […]
The IRS does not provide instructions for what to enter in the “Occupation” field, which appears at the bottom of your federal tax return, to the right of the signature lines. Enter whichever term best reflects your current occupation. Terms such as Student, Laborer, Self-Employed, Homemaker, Unemployed, and Retired are fully acceptable. The contents of the “Occupation” field do […]
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 […]
On January 3, 2013 the President signed the American Taxpayer Relief Act of 2012. This bill settled many of the “fiscal cliff” tax issues and extended (or made permanent) many tax cuts that were scheduled to expire. A brief overview of the tax law changes are discussed below: Above-the-Line Deductions: Tuition and fees deduction extended […]
The HealthWatch report in the TaxAct® program provides comprehensive information on the new health care law rules, how to get signed up through your state’s health insurance marketplaces, and provides a potential penalty calculation if you were not to get minimum essential health insurance in 2017. To review and/or print the HealthWatch Report in your […]
The Tax Increase Prevention Act of 2014 includes the following key provisions: Extension of deduction for certain expenses of elementary and secondary school teachers Extension of parity for employer-provided mass transit and parking benefits Extension of mortgage insurance premiums treated as qualified residence interest Extension of deduction of State and local general sales taxes Extension […]
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 […]
If you need to calculate late filing or late payment penalties, you will need to work directly with the IRS. TaxAct CANNOT calculate late filing nor late payment penalties. Go to IRS Instructions for Form 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts for more information. If you owe tax and are filing […]
If you are claimed as a dependent on someone else’s return, you cannot claim dependents on your own return. If you have inadvertently answered you are being claimed as a dependent on another taxpayer’s return, your dependents will not appear in Box 6c on page 1 of Form 1040. To correct this, if necessary: From […]
For purposes of the additional exemption on Line 39 of the IRS Form 1040, you are considered to be your “new” age on the day before your birthday. For example, if your 65th birthday is on January 1, 2018, you are considered 65 for 2017.
Per IRS Publication 505 Tax Withholding and Estimated Tax, page 7: Exemption From Withholding If you claim exemption from withholding, your employer won’t withhold federal income tax from your wages. The exemption applies only to income tax, not to social security or Medicare tax. You can claim exemption from withholding for 2022 only if both […]
You can claim an exemption for yourself, your spouse, and each of your dependents. You can generally deduct $4,050 from your adjusted gross income for each exemption you claim in 2017, which will lower your taxable income. The total number of exemptions is reported on Line 6d of Form 1040, and the total dollar amount […]
Per the Iowa 1040X Instructions we must use the tax rate schedules to calculate the tax and cannot use the tax tables. Due to this there may be a small difference between the tax calculated on Iowa Form 1040 and Iowa Form 1040X. Page 3 of the instructions states: Return Calculations: Enter the correct amounts […]
When you print your Indiana return, it may look different from some prior years. Indiana’s instructions to software developers state that they no longer want lines and boxes to be printed on the Indiana tax forms. Our developers have to follow these guidelines for TaxAct’s forms to be approved by the State of Indiana.
Am I eligible for a property tax credit? You may figure a credit for the Illinois property taxes you paid in 2023 on your principal residence (not a vacation home or rental property) for the time you owned and lived at the property during 2023, if that residence was in Illinois. Nonresidents of Illinois may […]
The State of Georgia has an Ad Valorem Tax which is listed on the Motor Vehicle Registration certificate. This tax is based on the car’s value and is the amount that can be entered on Federal Schedule A (Form 1040) Itemized Deductions for an itemized deduction (if the return qualifies to itemize deductions rather than […]
All U.S. citizens are residents of at least one state for tax purposes. Your state of residence is determined by: Where you’re registered to vote (or could be legally registered) Where you lived for most of the year Where your mail is delivered Which state issued your current driver’s license You can be considered a […]
Maine Schedule NRH Schedule for Calculating the Nonresident Credit for Married Person Electing to File Single is required when federal filing status is Married Filing Joint and you elect to file as Single on the Maine return. As this is a relatively uncommon selection, TaxAct® has not yet developed this form for inclusion in the […]
TaxAct® will select the larger of your standard or itemized deductions on the Oregon return. If you are itemizing for Oregon only, TaxAct will print an “Oregon Copy” of Schedule A with your Oregon return. You will need to make all of the necessary entries on the federal Schedule A, even though you are not […]
In Tennessee, bank interest is exempt, along with various other dividend and interest income. Since the program does not have any way of knowing exactly what type of interest is entered in the Federal portion of the return (which flows to the Tennessee program), the user must adjust the amount of interest taxable to Tennessee […]
If you have a qualifying child for the Earned Income Credit (EIC), but do not claim that child as a dependent, you can still claim them for the EIC. You need to list the child in the dependent section of the TaxAct program as a nondependent, and select them for the EIC. Go to our […]
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 […]
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 IRS has stated that all legal same-sex marriages will be recognized for federal tax purposes. This means that “individuals who were in same-sex marriages may, but are not required to, file original or amended returns choosing to be treated as married for federal tax purposes for one or more prior tax years still open under […]
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 […]
Your deduction for a donated car, boat, or airplane is generally limited to the gross proceeds from its sale by the qualified organization. This rule applies if the claimed value of the donated vehicle is more than $500. In certain cases, you can deduct the vehicle’s Fair Market Value (FMV). For details, see IRS Publication […]
Some entries made in the itemized deductions section of the program will not appear on the Deduction Examiner. For example, with amounts entered on Lines 21, 22, or 23 of federal Schedule A, only the amount over 2% of the AGI on the return (i.e. the amount eligible to flow to Line 27 of federal […]
The Tax Cuts and Jobs Act of 2018 suspended most miscellaneous itemized deductions you may have claimed in the past. Expenses related to the collection of income, including investment fees, are no longer deductible. Additional Information For additional information please refer to IRS Publication 550 Investment Income and Expenses (Including Capital Gains and Losses).
Tax Reform Update: Most of the miscellaneous itemized deductions you may have claimed in the past have been suspended under the new law. These deductions include: Unreimbursed employee expenses (travel expenses, dues/licenses, tools/supplies, education, etc.) Expenses related to the collection of income (investment fees, safe deposit box rental, tax advice, etc.) Tax preparation fees
When you import your prior year tax return into the current year return, itemized deduction amounts will transfer to the Prior Year Comparison report, even if you used the standard deduction in the prior year. When you enter itemized deductions in the current year return, the amounts will also appear on the Prior Year Comparison report (in […]
Qualified Tuition Programs (QTPs) are different from Coverdell Education Savings Accounts (ESAs). QTPs include state (529 plans) and private plans. With QTPs, ownership remains with the contributor rather than passing to the designated beneficiary. In other words, a taxpayer can own the QTP, have distributions made to them, and report Form 1099-Q Payments From Qualified […]
Per IRS Publication 970 Tax Benefits for Education, page 12: You can’t claim the American opportunity credit for 2023 if any of the following apply: Your filing status is married filing separately. You are claimed as a dependent on another person’s tax return, such as your parent’s return. Your modified adjusted gross income (MAGI) is […]
Generally, you can claim the American Opportunity Credit if: You pay qualified higher education expenses, You pay the education expenses for an eligible student, and The eligible student is yourself, your spouse, or a dependent you claim on your tax return. Eligible Student To be eligible for the American Opportunity Credit, the student must have […]
TaxAct® will determine which education benefit is most advantageous for you based on the data entered on your return (such as income, filing status, amount of qualified expenses, etc.). See Education Credits & Deductions – Enter, Review, Modify for instructions on how to enter or modify your education information in TaxAct, or to compare the […]
Either you, your dependent, or both of you may enter Form 1098-T Tuition Statement and other education information in TaxAct®. If you claim a dependent, only you can claim the education credit. Therefore, you would enter Form 1098-T and the dependent’s other education information in your return. If you do not claim a dependent, the […]
For a corporation to be treated as an S Corporation, they must file Form 2553, Election by a Small Business Corporation. Once this is filed, they are allowed to file Form 1120-S U.S. Income Tax Return for an S Corporation. Most states automatically accept the federal S election; however some have their own S election […]
Per IRS Instructions for Form 1065, page 2: Purpose of Form Form 1065 is an information return used to report the income, gains, losses, deductions, credits, and other information from the operation of a partnership. A partnership doesn’t pay tax on its income but passes through any profits or losses to its partners. Partners must […]
You can claim both the credit and the exclusion for expenses of adopting an eligible child. Qualified adoption expenses are reasonable and necessary expenses directly related to, and for the principal purpose of, the legal adoption of an eligible child. Qualified adoption expenses include: Adoption fees Attorney fees Court costs Travel expenses (including meals and […]
Form 8396 Mortgage Interest Credit is separate from Form 1098 Mortgage Interest Statement you receive from your bank or financial institution for mortgage interest paid. Form 8396 is for holders of Qualified Mortgage Credit Certificates (MCC) issued by state or local governmental units or agencies; the certificate credit rate is shown on the certificate. To […]
You may be able to claim the child and dependent care credit if you pay for the care of a qualifying individual so you can work or look for work. If you are married, both spouses must have earned income to qualify for the credit. Exceptions apply to disabled or student spouses. The amount of […]
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 […]
You will be asked during the filing process if you would like to submit your state return at the same time. You can indicate which returns you would like to file by checking the box next to each return. NOTE: Certain states require that you e-file the state return at the same time as your […]
We were recently made aware that the Indiana Department of Revenue’s filing system is still not ready to accept forms for testing and approval. TaxACT submitted the applicable information to the state in a timely manner; however, we cannot allow taxpayers to print and mail these returns prior to the state approving the form. Unfortunately, […]
Per the Oregon Department of Revenue instructions, you may need to add an amount to your income on Line 10 of the Oregon Form 40 (Line 33 of Form 40N or 40P) if you answer yes to both of these questions: Are you claiming an Oregon long-term care insurance premiums credit on Line 39 of […]
For 2008 and 2009 tax returns it was possible to take a real estate tax deduction even if you took the standard deduction. In these years, taxpayers who did not itemize could still deduct up to $500 ($1,000 if Married Filing Jointly) of state and local property taxes paid in addition to the standard deduction […]
Correcting Name, Birth Date, or SSN (Video)
Indiana Schedule H reports additional information for the Indiana Part-Year or Nonresident return. Item 4 in Section 2 of Schedule H reports the date of death for the taxpayer and/or spouse. Schedule H already has the year printed in the fields for the taxpayer and spouse, per the Indiana Department of Revenue specifications. If a […]
Indiana Schedule 7 reports additional information required for the Indiana return. Line 5 on Schedule 7 reports the date of death for the taxpayer and/or spouse. If a date of death is entered in the Basic Information section of the Federal Q&A, then the month and day will transfer to the Indiana return and be […]
To enter the credit for taxes prepaid to Utah in TaxACT: From within your TaxACT return (Online or Desktop) click on the State Q&A tab and then click on Utah directly below the blue tabs Click Credits to expand the category and then click Prepaid income taxes The amount entered in this field will flow to Line […]
On Georgia Form 500, Schedule 1, you are allowed to subtract a “retirement income exclusion.” If you are 62-64 years of age (or less than 62 and permanently disabled), the maximum retirement income exclusion is $35,000. For taxpayers 65 or older, the retirement exclusion is $65,000. This exclusion is available for both the taxpayer and […]
The State of Michigan does not accept credit cards for payment of taxes and has no provisions for payments to be taken directly from your checking account at the time of filing your income tax return. For more information concerning this type of payment see the Collection Division website. If you have previously sent your tax […]
UPDATE! As of Tuesday, March 4, 2014, Form 8960 and its final instructions have been incorporated into the TaxACT program. All returns containing this form can now be filed.
The sales and use tax calculation is based on the chart on Page 29 in the New York Instructions for Form IT-201, Line 59. TaxACT assumes the lowest income bracket from the chart for a tax due of $8.00 reported on NY Form IT-201, Line 59. This is why a new return (with no data) started for New York […]
The following links provide access to self-help information you may find useful while completing your return with TaxACT: Form Instructions IRS Website If the links above are insufficient in your situation, email support is always available for your tax questions free of charge – visit the Contact Us section on our website. You should anticipate […]
To review or modify the subtractions from income for a Delaware return: From within your TaxACT return (Online or Desktop) click on the State Q&A tab and then click on Delaware directly below the blue tabs Click Adjustments to expand the category and then click Adjustments subtracted from income Click Pension Exclusion and on the following screen you will […]
TaxACT supports Michigan city tax returns. The Common Form, CF-1040, is accepted by 19 cities: Albion, Battle Creek, Big Rapids, Flint, Grand Rapids, Grayling, Hamtramck, Highland Park, Ionia, Jackson, Lansing, Lapeer, Muskegon, Muskegon Heights, Pontiac, Portland, Saginaw, Springfield, and Walker. The Detroit resident city tax return is completed on Form D-1040(R). The Detroit nonresident city […]
Any child support payments will appear in column 3 of Vermont Form HI-144, and the total will be included in Line t, Household Income. To enter or review this information in TaxACT: From within your TaxACT return (Online or Desktop) click on the State Q&A tab and then click Vermont right below the blue tabs at the top of […]
The Indiana Department of Revenue has implemented a new identity protection program for the 2014 filing season (2013 tax year returns). This program is aimed at protecting identities of Indiana’s taxpayers. Some taxpayers will be selected to confirm their identities through an Identity Confirmation Quiz, which should take no more than two minutes. The selected […]
New Mexico Form RPD-41326 Rural Health Care Practitioner Tax Credit Claim Form is a fillable form. To enter the information for the credit: TaxACT Online Users Forms Method: From within your TaxACT return (Online), click on Jump to Forms & Topics Expand the New Mexico view, and then expand the Forms and Schedules view Scroll down […]
To access the Michigan Tribal Code: From within your TaxACT return (Online or Desktop) click on the State Q&A tab and then click Michigan right below the blue tabs at the top of the screen Click Refundable Credits to expand the section and then click Resident Tribal Member Annual Sales Tax Credit, Form 4013 The […]
There are several miscellaneous tax credits in Missouri that are reported on Form MO-TC. Information about these credits and the credit forms can be found at the Missouri Department of Revenue website Miscellaneous Tax Credits. These credits are calculated on their own specific forms and then reported on the Missouri Income Tax Credits Form MO-TC. At […]
TaxACT Donation Assistant (Video)
Form 1099-MISC (Box 7) Non-Employee Compensation (Video)
File Only State Return (Video)
Cancelled Debts & Foreclosures (Video)
Amending Your Federal Return (Video)
Alternative Minimum Tax (Video)
Per IRS Publication 936 Home Mortgage Interest Deduction, page 8: Mortgage Insurance PremiumsYou can treat amounts you paid during 2013 for qualified mortgage insurance as home mortgage interest. The insurance must be in connection with home acquisition debt, and the insurance contract must have been issued after 2006. Qualified mortgage insurance. Qualified mortgage insurance is mortgage […]
To enter your U.S. Military Enlisted Pay into your Arkansas tax return: Click on the State Q&A Click Arkansas directly below the Basic Info tab Click Income The first screen will ask if you have military wages to enter. Click Yes and enter the proper amounts TaxACT will transfer the amount of W-2 income entered […]
If you were a part-year resident of Alabama, you need to allocate your AL income correctly to avoid being taxed twice on income earned as a part-year resident of another state. To allocate your part-year Alabama source income: From within your TaxACT return (Online or Desktop) click on the State Q&A tab and then click Alabama right below […]
Per Georgia Filing Requirements and Other Filing Questions: Q. Normally Georgia will accept the automatic federal extension to file (form 4868) if it is attached to the Georgia return. What procedure should be used if the federal extension was obtained over the telephone or electronically? A. The instructions to the 4868 indicate that before you […]
The following Connecticut publications address individual income taxes for a nonresident member of the military or a nonresident military spouse. Connecticut Form 1040NR/PY, page 8: Military Personnel Filing Requirements Military personnel and their spouses who claim Connecticut as a residence but are stationed elsewhere are subject to Connecticut income tax. If you enlisted in the service […]
A bar code will appear on your printed Arizona return. Since TaxACT returns include the 2D bar code, they must be mailed to the address provided in the filing instructions for 2D returns. See page 2 of Arizona Form 140 for more information. If you are sending a payment with your Arizona return: Arizona Department of Revenue P.O. […]
Only one person can claim the Minnesota property tax refund. Both renters/owners income needs to be included on the return. Per Minnesota Form M1PR instructions, page 5: Renters: If you lived with a person other than your spouse, each of you should have received a Form CRP from your landlord. You must apply for separate […]
The Massachusetts rental deduction is reported on Line 14 of Massachusetts Form 1. To add a Massachusetts renter’s deduction in TaxACT: From within your TaxACT return (Online of Desktop) click on the State Q&A tab and then click Massachusetts, located directly below the blue tabs Click Miscellaneous Topics to expand that category and then click Rental Deduction You will now be in the […]
Per the Massachusetts Form 1-NR/PY Instructions, page 3: Were you a Massachusetts resident for part of the 2012 tax year? While you were not a resident of Massachusetts in tax year 2012, did you receive Massachusetts source income (e.g., from a job in Massachusetts)? If you answered "Yes" to both line 1 and line 2, […]
To claim the Agricultural Water Conservation Tax Credit, you will need to print off and manually complete New Mexico Form RPD-41319, then enter the calculated amount in your TaxACT return. To enter the amount of the manually calculated credit in the TaxACT program: From within your TaxACT return (Online or Desktop) click on the State […]
The Homebuyer Assistance and Improvement Act of 2010, signed by the President on July 2, 2010 extended the closing deadline from June 30 to Sept. 30 for any eligible homebuyer who entered into a binding purchase contract on or before April 30 to close on the purchase of the home on or before June 30, […]
The IRS developed the “Did I Receive an Economic Recovery Payment?” look up tool which gives taxpayers an easy way to determine if they received the one-time ERP payment and which agency made the payment. Beginning March 8, 2010, taxpayers can call 866-234-2942 to access the phone application. The Web application will be available March […]
New Tax Break for Contributions to Haiti Earthquake Relief A new tax relief law allows people who contributed in 2010 to charities providing earthquake relief in Haiti to take a tax deduction for the contribution on their 2009 tax return instead of their 2010 return. This means you can receive an immediate tax benefit, rather […]
The IRS "Fresh Start" initiative helps struggling taxpayers avoid certain failure-to-pay penalties. Eligible taxpayers have an extra six months (until October 15, 2012) to pay tax and interest due without being penalized. Two categories of taxpayers are eligible: Wage earners who have been unemployed at least 30 consecutive days between January 1, 2011 and April […]
2010 will be the last year to purchase a hybrid vehicle and be eligible for the Alternative Motor Vehicle Credit credit on Form 8910 ‘Alternative Motor Vehicle Credit’. Vehicles must be purchased on or before 12/31/10 to claim the credit on your 2010 return. The Internal Revenue Service has acknowledged that the following 2010 and […]
If you paid tuition and fees for higher education, you may qualify to deduct up to $2,000 or $4,000 (depending on your income) on your return. You can take the deduction for qualified education expenses you paid for yourself, your spouse, or a dependent. You do not have to itemize to take this deduction. You […]
As TaxACT cannot determine whether your pension income is subject to the McFadden or Maples lawsuits, you will need to manually adjust the taxable amount of your pension income during the State Q&A. According to the Arkansas publication Subject 206 Pensions and Annuities: If you received retirement benefits in the form of pension or annuity […]
The Ridesharing Credit is exclusive to the state of California and can be entered in your state return by following these steps: From within your TaxACT return (Online or Desktop) click on the State Q&A tab and then click California located directly below the blue tabs Click Credits to expand the category and then click Special credit […]
To claim an Indiana Partnership Long-Term Care deduction in TaxACT: From within your TaxACT return (Online or Desktop) click on the State Q&A tab and then click Indiana right below the blue tabs at the top of the screen Click Income & Deductions to expand the category and then click Miscellaneous Deductions Continue to the […]
If you are an Idaho resident but are not required to file a tax return, you may still be eligible to receive the grocery credit refund. To enter the appropriate information in TaxACT, depending on your situation: From within your TaxACT return (Online or Desktop) click on the State Q&A tab and then click Idaho right below the […]
The Eligible Single-Family Residence Tax Credit would have been claimed on your 2009 Georgia return. In order to claim the unused credit on your 2012 return, you must have purchased the home between June 1, 2009 and November 30, 2009 and claimed the credit in 2009 through 2011. The credit amount is the lesser of 1.2 […]
The Louisiana R-540X is for your records only and should not to be mailed to the Louisiana Department of Revenue. To amend the Louisiana return, you may either e-file a corrected IT-540 (or IT-540B), or paper file a revised IT-540 (or IT-540B). Form R-540X is only for use as a tool to help reconcile differences of […]
If you lived in Iowa for only a portion of the year, you should file a part-year resident Iowa tax return and allocate your Iowa income using the steps below: From within your TaxACT return (Online of Desktop) click on the State Q&A tab and then click on Iowa located on the left side of the screen, […]
If you paid rent to more than one landlord during the year: From within your TaxACT return (Online of Desktop) click on the State Q&A tab and then click Indiana right below the blue tabs at the top of the screen Click Income & Deductions to expand the category and then click Renter’s Deduction and Property Tax […]
If you choose to report sales tax on casual rentals of living quarters on you Maine income tax return in lieu of reporting the amount on the Maine’s sales tax returns, multiply the rentals received by 7% (0.07). Casual rentals include the rental of a house, cottage, condominium unit, vacation home, camp or any other […]
According to the instructions for Rhode Island Form RI-1040H Rhode Island Property Tax Relief Claim, the property tax relief claim must be filed by April 15, 2013. However, an extension may be allowed at the Rhode Island Division of Taxation’s discretion for sickness, absence, or disability. According to the Division of Taxation, there is not […]
Michigan Schedule of Apportionment MI-1040H is not only used for businesses with assets or employees. There is also a Sales Factor under Part 2: Computation Of Income Attributable To Other State(s), Line 16 that states "Business income included in adjusted gross income that is subject to apportionment (include ordinary and portfolio income, and all other business […]
If you filed an extension and mailed in a payment with the extension, you will need to place the payment information from the extension form in our software for the data to accurately reflect on your return. Please follow the instructions below to enter your payment: From within your TaxACT return (Online or Desktop) click […]
If you received any FIP (Family Independence Program) and other DHS (Department of Human Services) benefits, please enter the amount of those benefits into TaxACT to correctly calculate the Homestead Credit Claim. To enter this information into TaxACT: From within your TaxACT return (Online or Desktop) click on the State Q&A tab and then click […]
Arizona legislature made the decision to not fully conform to federal changes to the Internal Revenue Code in 2009 after the 2009 tax season had already ended. Due to the fact that many Arizona return filers will now have to amend their returns, on August 16, 2010 the State of Arizona Department of Revenue released […]
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 […]
On the 2008 Federal Schedule A, Line 7 was specifically for ‘Personal Property Taxes’. The 2009 Schedule A uses Line 7 for the ‘New Motor Vehicle Tax’. The personal property taxes in 2009 are entered on Line 8 of Federal Schedule A ‘Other Taxes’. To enter this in the TaxACT program: Click on the “Federal […]
For tax year 2008, the Alternative Minimum Tax Exemption increased to $69,950 for married filing joint and qualifying widow(er) status, $34,975 for a married person filing separately and $46,200 for single and head of household status. Prior to Congress passing the legislation, the Alternative Minimum Tax Exemption for 2008 returns was scheduled to drop to […]
There is a worksheet in the 2008 TaxACT program, ‘Recovery Rebate Credit Worksheet’, which transfers to Line 70 of Federal Form 1040 where individuals that did not receive their appropriate Stimulus Payment in 2008 will be eligible to receive this payment through their 2008 tax return. According to the IRS, for 2008 you will generally […]
If you are to receive a refund there is nothing to mail in. If you do owe when completing your filing, a PFC prints out with your return. This form must accompany any payment you make to the Indiana Department of Revenue for that same period. Refer to the filing instructions that print with your […]
The IRS recently updated their website Answers to Frequently Asked Questions for Registered Domestic Partners and Individuals in Civil Unions as a result of the court’s decision in the United States vs. Windsor case which ruled that same-sex couples who are married under state law are considered married for federal tax purposes. CLICK HERE to […]
TaxACT supports New York City business tax returns, including the following forms for corporations (1120): NYC-3L (long form) NYC-4S (short form) NYC-4SEZ (EZ form) New York City business returns can be electronically filed with TaxACT.
TaxACT does support the New York CT-3 forms (CT3M/4M included) for the New York 1120 program. We do not support CT-4, which is a short form for C Corporations. It is possible to use New York Form CT-3 in place of Form CT-4.
TaxACT supports New York City Business Tax returns, including the following forms for partnerships (1065): NYC-204 (standard form) NYC-204EZ (EZ form) New York City business returns can be electronically filed with TaxACT.
TaxACT supports New York City Business Tax returns, including the following forms for S corporations (1120S): NYC-3L (long form) NYC-4S (short form) NYC-4SEZ (EZ form) New York City business returns can be electronically filed with TaxACT.
TaxACT supports West Virginia Form WV-8379 Injured Spouse Allocation. To enter this information in TaxACT: From within your TaxACT return (Online or Desktop), click on the State Q&A tab Click West Virginia directly below the blue tabs Click Miscellaneous Topics to expand the category and then click Injured spouse relief The program will proceed with the interview questions for […]
When there is a federal income tax deduction on the Alabama return, the Alabama Department of Revenue requires that a copy of page 2 of the federal return be provided to support the deduction. This is why page 2 of IRS Form 1040 is printed with the Alabama return.
The federal Schedule A will print if the Arizona Schedule A is part of your Arizona return. According to the Arizona form instructions, you must complete a federal Schedule A to itemize on your Arizona return, even if you do not itemize on your federal return.
The first page of the California return is a scannable form created for ease of use at the state office. The form is scanned on a special machine that can read the line numbers and values faster than a human can type them into the system. The California TaxACT return is printing correctly even though it looks different from the return […]
The Connecticut return will be marked with a Y or a N for Dec. to indicate whether the taxpayer or spouse is deceased. This information will also be included in the scan bar.
Georgia Department of Revenue, Taxpayer Services Division, Innocent/Injured Spouse Relief: Q. Does Georgia have innocent spouse rules? A. The Georgia legislature passed innocent spouse legislation during 1999. Generally a person must have been treated as an innocent spouse under IRS guidelines before innocent spouse status can be considered for Georgia purposes. Q. Every year my […]
Per the State of Georgia’s FAQ: If you are claimed by a parent or guardian on his/her federal return, you should claim one exemption for yourself on your Georgia return.
TaxACT supports Idaho Form 43 Idaho Part-Year Resident/Nonresident Income Tax Return which will show your Idaho taxable wages (this comes from Box 17 of each W-2 in which ID is listed in Box 15). The first question in the Idaho Q&A is whether you are a full-year or part-year/nonresident of Idaho. Depending on that answer, the program will […]
Idaho property tax information will be automatically populated in the Idaho return based on the information entered in the Itemized or Standard Deductions section of the Federal Q&A.
The State and ZIP code fields are required by the State of Maine. Without this information the return would be rejected. You will need to paper file the Maine return for this year.
Michigan Schedule D The Michigan MI-1040D will only print when there is a difference between the federal and the Michigan transactions. The Michigan Department of Treasury only requests the MI-1040D for the related additions and subtractions where there is a difference.
For Michigan returns, you must file for a refund within four years of the due date of the return and keep a copy of your return and all supporting schedules for six years. If you are due a refund, you must file a return within four years of the due date to obtain the refund. […]
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 […]
A bar code will appear at the top of your printed Georgia return. Since TaxACT returns include the 2D barcode, they must be mailed to the address provided in the paper filing instructions for 2D returns. If your Georgia return has a refund: Processing CenterGeorgia Department of Revenue P.O. Box 105597 Atlanta, GA 30348-5597 If your Georgia return […]
The Retirement Income Exclusion on the Georgia return is only available to taxpayers who are either: 62 years of age or older, or permanently disabled to such an extent that they are unable to perform any type of gainful employment TaxACT automatically calculates the exclusion based on the date of birth entered in the Federal Q&A section […]
To adjust the income on California Form 540NR California Nonresident or Part-Year Resident to reflect only the income received while a California resident or received from sources within California while a nonresident: From within your TaxACT return (Online or Desktop) click on the State Q&A tab and then click California right below the blue tabs at the […]
The Alabama Department of Revenue requires all income received from sources both inside and outside Alabama be included on the Alabama return (and then the “Alabama only” wages be indicated if you are a part-year or nonresident). The TaxACT program does this by transferring all wages from Box 16 of any W-2s in the return to the […]
There are certain retirement systems that Alabama does not make taxable, including “any defined benefit retirement plan in accordance with IRC 414(j) (contact your retirement plan administrator to determine if your plan qualifies).” The TaxACT program cannot determine if the plan is eligible to be tax exempt, so the preparer of the return must change the amount […]
The public pension exemption is calculated on Missouri Form MO-A, Part 3 (Section A). It applies to any federal, state, or local pensions (not just Military Retirees and/or Missouri State Employee Retirees). Taxpayers with income exceeding the limits below may qualify for a partial credit. The program will calculate this deduction if you qualify. The […]
If you received any FIP (Family Independence Program) and other DHS (Department of Human Services) benefits, please enter the amount of those benefits into TaxACT to correctly calculate the Homestead Credit Claim. To enter this information into TaxACT: From within your TaxACT return (Online or Desktop) click on the State Q&A tab and then click […]
To subtract the military pay on the Michigan return: From within your TaxACT return (Online or Desktop) click on the State Q&A tab and then click on Michigan Click Subtractions to expand the category and then click Various Schedule 1 subtractions Make the entry for Active duty military pay from U.S. Armed Forces included in […]
To enter the Michigan Homestead Property Tax Credit: From within your TaxACT return (Online or Desktop) click on the State Q&A tab, then click on Michigan directly below the blue tabs Click Refundable Credits to expand the category, click Homestead property tax credit to expand the category, then click Homestead property tax credit claim, Form MI-1040CR […]
The deadline for filing your 2013 home heating credit is September 30, 2014. The filing of an extension for income taxes does not extend the due date for the home heating credit. To enter the information for this credit in the TaxACT program: From within your TaxACT return (Online or Desktop) click on the State […]
Form MI-1040CR-7 can be either electronically or paper filed using TaxACT. To enter the information for Form MI-1040CR-7: From within your TaxACT return (Online or Desktop) click on the State Q&A tab and then click Michigan directly below the blue tabs Click Refundable Credits to expand the category, then click Home heating credit Click Home heating claim, Form […]
The instructions for Form MI-1040CR indicate that to amend the form you originally filed you should complete a corrected paper form and hand write Amended across the top. You can correct the information in the software and print the individual form from the Print menu. This Amended form should then be mailed to: Michigan Department […]
Instructions for Form NJ-1040, Page 6: Guidelines for Part-Year Residents If you were a New Jersey resident for only part of the taxable year, you are subject to the tax if your income for the entire year exceeds $20,000 ($10,000 if filing status is single or married/CU partner, filing separate return), even though the income […]
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 […]
The Virginia Schedule FED is only required if there is car and truck expense on Line 9 of federal Schedule C. If you have a car or truck expense entered on Schedule C, use the following steps to add your Virginia Schedule FED information in TaxACT: From within your TaxACT return (Online or Desktop) click on […]
To enter an adjustment to income for the Texarkana exemption in TaxACT: From within your TaxACT return (Online or Desktop), click the State Q&A tab Click Arkansas in the menu just below the blue tabs Click Adjustments to Income Continue to the screen titled Arkansas – Border City Adjustment and enter the information NOTE: You […]
The TaxACT program supports California Form 3801 Passive Activity Loss Limitations. This form may be used to figure the allowable California passive activity loss (PAL) and any adjustment that must be made to account for any difference between the California PAL and the federal PAL. Per the California Instructions for Form FTB 3801 Passive Activity Loss Limitations, […]
To enter Maryland Form 502V information in TaxACT: From within your TaxACT return (Online of Desktop) click on the State Q&A and then click Maryland directly below the blue tabs Click Subtractions from Income to expand that category and then click Use of Vehicle for Charitable Purposes The program will proceed with the interview questions for you to […]
Georgia tax refunds are considered Other Income for the Retirement Income Exclusion. Refunds from states other than Georgia are not included. On page 14, the Form IT511 Instructions state that "other income that is not taxable to Georgia should not be included in the retirement income exclusion calculation". The GA tax refund is taxable to Georgia and should therefore be included on […]
Per the instructions for Form D-40 Individual Income Tax: District Code section 47-1803.03 (c) states, “Every individual who claims the standard deduction on his or her federal income tax return shall claim the applicable standard deduction specified in section 47-1801.4(26). Every individual who itemizes the deductions on his or her federal income tax return shall itemize […]
Per the Arkansas Form 8453-OL instructions: If you choose to file your State of Arkansas tax return by using one of the online web providers, you are required to complete the AR8453-OL. You must keep the completed and signed AR8453-OL along with your tax return and any W-2s and/or 1099s. In the TaxACT program, you […]
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.
Michigan has different mailing addresses for computer-generated forms than it does for preprinted paper and web forms. FORM MI-1040 Computer Generated: REFUND: Michigan Department of Treasury PO Box 30726 Lansing, MI 48909-8226 PAYMENT: Michigan Department of Treasury PO Box 30727 Lansing, MI 48909-8227 Preprinted Paper and Web Forms: REFUND: Michigan Department of Treasury Lansing, MI […]
Because of changes in the federal Schedule A, you may need to adjust your California itemized deductions. Other taxes claimed on Line 8 of federal Schedule A may include foreign taxes paid, and these are not deductible for California purposes. If this situation applies to your return, you will see the following alert in your […]
If you are a nonresident military taxpayer with ONLY military income, and you are filing a joint resident return with a civilian spouse, you can enter your tax exempt military income as follows: From within your TaxACT return (Online of Desktop) click on the State Q&A and then click Maryland directly below the blue tabs Click on […]
Contributions to the West Virginia Prepaid Tuition Trust/West Virginia Savings Plan Trust may be deductible on your West Virginia return. Taxpayers making payments or contributions to programs of the West Virginia Prepaid Tuition Trust and/or West Virginia Savings Plan Trust, operated under the trade names of SMART529 or West Virginia Prepaid College Plan, may be […]
To enter the Basic Military Pay subtraction in TaxACT: From within your TaxACT return (Online or Desktop) click on the State Q&A tab, then click Virginia directly below the blue tabs Click Adjustments to expand the category and then click Adjustments subtracted from income Click Other Subtractions Select 38-Basic Military Pay from the drop-down menu and […]
The mailing address for Form 760IP Virginia Extension Payment Voucher is: Department of Taxation P.O. Box 760 Richmond, VA 23218-0760
The credit for increased excise taxes is a refundable credit that applies if you are married filing jointly or head of household and your federal adjusted gross income is $25,000 or less. It will also apply if you are single or married filing a separate return and your federal adjusted gross income is $12,500 or […]
Currently, the TaxACT program only allows one Pennsylvania return to be attached to the federal return. In order to file two separate returns in Pennsylvania, you would need to create two additional federal returns and split the income appropriately between these two returns (within the Federal Q&A), and then complete the PA module for each. […]
TaxACT supports the filing of an Oregon return which qualifies for the Amtrak Act. To make this designation in your return: From within your TaxACT return (Online or Desktop) click on the State Q&A tab and then click Oregon directly below the blue tabs Click Miscellaneous Topics to expand the category and then click Return Instructions From the drop down […]
In the State Q&A for California, the Adjustments screen titled California – Adjustments – Alimony Paid states: If you paid alimony, enter the last name of the person to whom you paid alimony. If you are a nonresident alien and did not deduct alimony on your federal return, enter the alimony paid as an addition. Otherwise, […]
Per the Federal Voting Assistance Program, Voting Residency Guidelines: Members of the Uniformed Services and Their Family Members Uniformed Service personnel and their family members may not arbitrarily choose which state to declare as their legal voting residence without meeting the state’s residency requirement. The following are basic guidelines to follow in determining voting residency: […]
Iowa Tax Treatment of Same-Sex Marriages Per Iowa Tax Treatment of Same-Sex Marriages: Return Filing Options for Same-sex Spouses For federal purposes, spouses in a same-sex marriage should file either as single filers, or as head of household. For Iowa purposes, same-sex spouses have three options for filing their Iowa income taxes: A married filing […]
If a student attends two separate colleges in the same year and both are entered on Kentucky Form 8863-K Kentucky Education Tuition Tax Credit, you will see a Red Alert. TaxACT has this Red Alert, which will prevent electronic filing of the return, because Kentucky will not accept returns with duplicate social security numbers on Form […]
If you are a Pennsylvania resident in the military, the following are not taxable: income you earned outside of Pennsylvania while on active duty military pay you received while in a combat zone To enter your federal active-duty pay earned outside Pennsylvania in TaxACT: From within your TaxACT return (Online or Desktop) click on the State Q&A tab, […]
Pennsylvania does not allow electronic filing of tax returns that have a 1099-MISC or 1099-G which report PA withholdings. If you have mistakenly reported PA withholding on either a 1099-MISC or 1099-G (unemployment), correct your data entry and the alert will clear. If the data is reported correctly and you had PA withholding on either […]
Line 6c of IRS Form 1040 asks for three different types of dependents. Number of children on 6c who: Lived with you Number of children on 6c who: Did not live with you due to divorce or separation Dependents on 6c not entered above If the relationship is entered as any of the following, and […]
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 […]
While TaxACT does not support IRS Form 990, the annual information return required for some 501(c)(3) organizations, below you will find all of the information needed to complete the form which can be mailed to the IRS. Generally, tax-exempt organizations must file an annual information return. Tax-exempt organizations that have annual gross receipts not normally […]
To obtain your pin code for Illinois, please visit the link below. Illinois Pin Code
