Eligible taxpayers who opt in to Republic Bank Early Access may receive their federal refund up to 5 days sooner than standard funding. An additional $25 Early Access fee applies for this service. For more information about the product, see the Republic Bank Product Page. Eligibility Requirements The following limitations apply:
TaxAct Intelligence (Beta) is an in-product assistant that is available at no additional cost in TaxAct Online. While you work on your return, you can ask where to enter information, what a screen means, and similar entry or return questions. TaxAct Intelligence does not provide tax advice and is not a live tax expert. IMPORTANT: […]
If you have partnered with Santa Barbara TPG, you can now offer Fast Forward by SBTPGTM to eligible taxpayers. If they opt-in to the Fast Forward program, taxpayers can receive their federal refund up to 5 days earlier than standard funding. There is an additional $25.00 Fast Forward Fee for this service (the fee is […]
In TaxAct Professional Enterprise Edition, checking in/out a client return is a multi-user networking feature. In a multi-user or office network setup, a user may check files in or out of internal document storage or cloud repositories (such as TaxAct’s secure servers or a local server directory) to control concurrent access and editing rights. See […]
You can create a customizable, dynamic onboarding form in Client Portals. Add your own questions and use a client’s prior-year return to generate a personalized document checklist. Watch the video Guided Organizer for a demonstration. Preparer steps To get started, in TaxAct Pro click the Portals tab. Alternatively, log in to My Account and click […]
You can manage your data within your TaxAct account by submitting a privacy request to delete certain personal information. To submit a privacy request, follow the steps below: Individual To remove certain personal information from your account: Professional To remove certain personal information from your account: Privacy Portal You can also submit a request by […]
Form 4868 is used to request an extension of time to file an individual tax return, Form 1040. See Form 4868 – Filing a Federal Individual Tax Return Extension for more information. To enter the amount paid with Federal Form 4868 on your return, follow the steps below. Then, click on the About dashboard (Dashboards) […]
A return may need to be paper-filed in the following situations: Before mailing the return(s), be sure to read the filing instructions. They will include important information such as where to file, what to attach to the return (i.e. W-2s, 1099s, etc.), refund or balance due, information about estimated tax payments, etc. Returns Rejected on […]
To select or change a taxpayer’s filing status in the TaxAct program, follow the steps below. Desktop TaxAct Online Dashboard Classic Related Links
TaxAct calculates both the itemized deduction and the standard deduction for the taxpayer’s filing status and applies the option that results in the greatest tax benefit. To manually select a deduction method in TaxAct program, follow the steps below: Desktop TaxAct Online Related Links
Steps to Check for Program Updates: Open your TaxAct program. Click Online in the upper menu bar. Select Check for Updates from the dropdown menu. Follow the on-screen instructions to select and install the federal or state updates you need. NOTE: This process verifies and installs the latest program updates. Your data will remain intact and will not be lost during the update.
Arizona’s e-file system will undergo scheduled maintenance from 12:00 PM on Friday, October 9, 2026, through 7:00 AM on Tuesday, October 13, 2026. During the maintenance period, all processing will be paused. You can continue to submit returns; however, they will not be processed until after the maintenance period has ended.
Desktop You can access worksheets in TaxAct Professional Editions as a form in the Forms Explorer. See Entering in Program – Fillable Forms for detailed instructions. If an Unable to open form directly pop-up appears, it will have a list of forms that you still need to enter your data into first. TaxAct Online You […]
Estimated tax payments are advance payments of federal and, where applicable, state income tax on income not subject to withholding. Common sources include self-employment income, interest, dividends, rental income, capital gains, pass-through income, and other forms of taxable income. Individual estimated tax obligations are generally calculated and remitted using Form 1040-ES, Estimated Tax for Individuals. […]
To navigate back to the Q&A Interview view, follow the steps below: Desktop You can get back to the Q&A from the Forms view by clicking Q&A near the top of your screen. TaxAct Online Dashboards Classic Navigation From the left menu, you can select the relevant topic type (Income, Deductions, Credits, Taxes, Miscellaneous) and choose […]
To determine which forms/schedules are “active” in the current return, as opposed to those forms that are not being used in the current return, you need to view the Forms and Schedules list. Active forms/schedules are either automatically created (and required as a part of every return), or you have entered information in the TaxAct […]
TaxAct is committed to protecting your tax information. We partner with the IRS, state tax administrators, and other software providers to prevent tax and identity fraud. As part of this effort, we implement advanced security measures, including: We continually update our security protocols to keep your information safe. The TaxAct Service & Support team: Update […]
If you are required to include additional files with a client return, you will be prompted to attach those files during the e-filing process. Check the Federal and State sections of the TaxAct program to make sure you’ve added any necessary attachments. You can attach a PDF document to your Federal return for the following […]
If a taxpayers employer offers a tax-deferred retirement plan, such as a traditional 401(k) or 403(b), contributions made to the plan are generally pre-tax and are not included in taxable wages. Because these contributions are already excluded from income, they are not deductible on a tax return. Some taxpayers may still be able to make […]
A taxpayer may receive Form 1099-MISC or Form 1099-K reporting income or transactions related to their rental or royalty income. You will be able to enter information for those income forms during the Schedule E interview process. You can enter Qualified Business Income (QBI) for a rental property when entering the details about that rental […]
Rule F8962‑070 is an IRS e‑file rejection code that means the return was rejected because the IRS has records showing the taxpayer had advance premium tax credit (APTC) from a Health Insurance Marketplace, but Form 8962 Premium Tax Credit was not included with the e‑filed return. A taxpayer would receive Form 1095-A if they or […]
To enter capital loss carryover from a prior year in the TaxAct Professional Editions program, follow the steps below: Related Links
If you own a business, freelance, or earn money through gig work, you are generally considered self-employed. You can enter Qualified Business Income (QBI) related to self-employed or sole proprietor income when entering the details about that Sole Proprietorship. You may receive Form 1099-NEC or Form 1099-K reporting income or transactions related to your self-employment. […]
The standard deduction is calculated based on your demographic information and filing status. To compare your itemized deductions with your standard deduction or to force the program to switch to one or the other, go to our Force Standard or Itemized Deductions FAQ. Desktop To claim itemized deductions in the TaxAct Professional Editions program, follow […]
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. See the IRS Instructions for Schedule A for details on what types of taxes can be entered […]
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. Alternatively, you can access this form directly through the Forms Assistant navigation: Related Links
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 Professional Editions program, follow the steps below: Alternatively, you can access this form directly through the Forms Assistant navigation: Related Links
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 […]
Desktop To add farm income information, filed on Federal Schedule F, in the TaxAct Professional Editions program, follow the steps below: TaxAct Online To add individual farm income information in the TaxAct Online program, follow the steps below: Dashboard Classic Form 1099-K If you received Form 1099-K related to your farming income, enter or edit […]
Desktop To enter the interest income from a seller-financed mortgage in the TaxAct Professional Editions program, follow the steps below: TaxAct Online To enter the interest income from a seller-financed mortgage in the TaxAct Online program, follow the steps below: Dashboard Classic Related Links
If the taxpayer who made contributions to a retirement plan such as a SEP, SIMPLE, or Keogh plan as a self-employed individual, they may be able to claim a deduction on their tax return for those contributions. The TaxAct program offers the Publication 560 Worksheet for qualified self-employed individuals to calculate their maximum deductible contribution […]
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 […]
You can use the Tax Calculator to answer a few simple questions about a taxpayer’s income and expenses to get an idea of whether they should expect a refund and how much, or if they’ll owe the IRS when they file taxes in the future. To use the Tax Calculator in a TaxAct return: Desktop […]
The disability status information entered in the Basic Information section is transferred to other parts of the TaxAct return: To enter or modify either the taxpayer’s or spouse’s blind or totally disabled status in your TaxAct return, follow the steps below: Related Links
To view this report at any time from the Professional Reports page, click Dashboard in the Navigation menu. For help accessing the Professional Reports, see Accessing Professional Reports for detailed instructions. This report is broken into a couple different parts. E-Files Over Time Click Daily, Weekly, or Monthly to view the E-Files Over Time graph […]
You can access Professional Reports in two ways: From Practice Manager From within TaxAct Professional Editions Menu and Navigation Once you access Professional Reports, your home page is the E-File Details Report. See Professional Reports Guide for reports available in the Navigation menu. Related Links
For help accessing the Professional Reports, see Accessing Professional Reports for detailed instructions. Once you have accessed Professional Reports, you can view reports from the navigation menu, including: Dashboard Reports To view this report at any time, click Dashboard in the navigation menu. This report is broken into a couple different parts. See Dashboard Reports […]
You can choose to edit your preparer preferences during setup by clicking the Preparer Preferences button. You can access and edit this information any time by clicking Preparer > Preferences. In the Preparer Preferences window, you can choose settings for your Client Manager, Electronic Filing Manager, and specify general preferences. Preference Options Client Manager Appointment […]
Search for a Client Click the Search button at the top of the screen next to Add Client and enter text. Click Next. Add, Edit, or Delete a Client You can add, edit, and delete client records in the Client Manager, which displays all current client information and the status of each return. See Adding, […]
Installation Before proceeding, ensure that you have TaxAct Professional Editions installed. See Downloading and Installing TaxAct for installation procedures. Setup Import Master Information Returning users can save time by utilizing TaxAct’s Import Prior Year Online Master Information feature. Practice, Preparer, Client, and General information will be automatically populated based on last year’s entries. When you […]
When you’re ready to e-file a client return, we recommend using the E-file Center, where you can submit single or multiple returns. From here, you can also view e-filing information for other preparers in your practice and navigate to e-file and refund status reports. To access the E-file Center, you must be in a client’s […]
The Print Center offers multiple printing options in one convenient place. Multiple documents can be printed in one job. The Print Center also consolidates the printing of client returns, organizers, consent forms, labels, and blank forms. You can access the Print Center in any of the following ways: What is a Client Organizer? The Client […]
The Print Center offers multiple printing options in one convenient place. Multiple documents can be printed in one job. The Print Center also consolidates the printing of client returns, organizers, consent forms, labels, and blank forms. You can access the Print Center in any of the following ways: From the Print Center, click the Labels […]
The Print Center offers multiple printing options in one convenient place. Multiple documents can be printed in one job. The Print Center also consolidates the printing of client returns, organizers, consent forms, labels, and blank forms. You can access the Print Center in any of the following ways: From within the print center, you can […]
TaxAct offers several methods for you to keep your client returns safe and secure, including: You will be required to sign in each time you open the software and after 30 minutes of inactivity on your PC, or every 24 hours (whichever comes first). The IRS Security Summit’s requirements apply to all professional tax products […]
The first time you launch the software, the TaxAct Setup Wizard will walk you through steps to set up Master Information, including Practice, Preparers, Client Status, Directories, and General categories. You can edit and access your Practice, Preparer, Client, and Return information through a secure online account anywhere, anytime. You’ll need to sign in to […]
TaxAct Online Add State Remove State WARNING: Removing a state will delete all the data you have entered for that state. Desktop Add State Remove State WARNING: Removing a state will delete all the data you have entered for that state. Related Links
Integrated E-Signatures, Powered by Drake Software, is fully integrated with TaxAct Pro. This makes it easier to get the signatures you need to e-file. You must have a Client Portals subscription to purchase and use Integrated E-Signatures. See Professional Editions: Client Portals – Overview for more information about Client Portals. Once you have a Client […]
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. TaxAct Online Dashboard Classic Desktop Related Links
A valid SSN or ITIN must be obtained by the extended filing deadline in order to receive certain credits on the 20YY return. For most calendar year taxpayers, the extended filing deadline is October 15 of the following year; however, there may be an exception for taxpayers living outside of the country. See IRS Publication […]
To report 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. TaxAct Online Dashboard Classic Desktop Related Links
To access the student worksheet, follow the steps below. TaxAct will generally 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.). TaxAct Online Dashboard Classic Desktop
A state income tax refund received during the current tax year may be taxable at the federal level if the taxpayer claimed an itemized deduction for state and local taxes on the prior-year federal return and received a tax benefit from that deduction. If the taxpayer claimed the standard deduction on the prior-year return, the […]
Federal income tax operates under a pay-as-you-go system, requiring taxpayers to remit tax throughout the year as income is earned or received. This obligation is generally satisfied through wage withholding, estimated tax payments, or a combination of both. Taxpayers who fail to pay sufficient tax during the year may be subject to the underpayment of […]
Based on the Modified Adjusted Gross Income (MAGI) on a return, the student loan interest deduction allowed on the return may be phased out or eliminated. The TaxAct program automatically calculates the eligible amount of student loan interest deduction for the return, based on the student loan interest expense entered in the program (in conjunction […]
Amounts a taxpayer receives 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 the taxpayer tax return using the TaxAct program. If you an IRS Form W-2 Wage and Tax Statement was […]
Many states impose a corporate income tax. In some states, corporations may also be subject to a franchise tax, business privilege tax, net worth tax, or similar annual business tax. Requirements, tax bases, and filing obligations vary by state. For details about each state’s franchise tax requirements and rates, see the states DOR website. Franchise […]
Using SmartExtractTM (Beta) Powered by Drake Software, you can upload your client’s supported tax documents and import extracted tax data directly into a tax return. This helps streamline data entry by importing information from supported tax forms. This feature uses AI-assisted extraction to help reduce manual data entry from supported tax forms. SmartExtractTM (Beta) is […]
A “Backdoor Roth IRA” is an informal term commonly used to describe making a nondeductible contribution to a Traditional IRA and then converting an amount from the Traditional IRA to a Roth IRA. IMPORTANT: The IRS does not use “Backdoor Roth IRA” as an official term for this transaction. The nondeductible Traditional IRA contribution is […]
To open an online return in the Desktop app, you must first have the TaxAct Desktop software installed. See Downloading and Installing TaxAct for steps to download and install the Desktop software. Once the Desktop app is installed, follow the instructions below to open an online return in the program:
Benefits The Financial Hub allows you to track your income and expenses year-round, which will then make tax time easier. TaxAct has partnered with Plaid to import transaction information from your connected accounts. Using the Financial Hub, you can see your income, expenses, and transactions for all connected accounts in one place. You can also […]
A special allocation on Form 1065 Schedule K-1 allows a partnership to allocate income, losses, or other tax items to partners in a manner that differs from their ownership percentages, based on the partnership agreement. To make a special allocation for partners share of recourse/non-recourse debt, follow the steps below: TaxAct Online Desktop Related Links
File a 2025 return for Forms 1065, 1120, 1120-S, 1041, or 990 for calendar year 2025 and fiscal years that begin in 2025 and end in 2026. For a fiscal or short tax year return, fill in the tax year space at the top of the form. See the following IRS instructions for details: Instructions […]
You can check the status of a client’s e-filed return through the Professional Reports dashboard within your Practice Manager. Visit the Preparer’s e-Filing Center webpage for more information.
The Michigan Department of Treasury is transitioning additional tax types to a new processing vendor. The transition will affect Michigan e-filed returns submitted between October 30 and November 12, 2026. ACH direct debit payments included with affected submissions will not be withdrawn until November 13. No additional penalty or interest will be charged because of […]
Form IT-216, Claim for Child and Dependent Care Credit, is used to calculate the New York State Child and Dependent Care Credit. The rules for the credit change substantially beginning with tax year 2026. Credit Qualifications Tax year 2025 and prior For tax year 2025 and prior, the New York Child and Dependent Care Credit […]
To enter the credit for taxes prepaid to Utah in TaxAct: NOTE: If an amount has already been entered in the Estimated Payments section of the Federal Q&A, they will already appear on this screen. TaxAct Online From within your TaxAct return, click on the State Q&A tab and then click on Utah directly below the […]
Virginia Schedule FED is generally required when a Schedule C business includes a vehicle expense/mileage deduction (car and truck expenses) that requires federal line-item detail to be reported on Schedule FED. The appropriate expense amounts and other information entered in the Federal Q&A section for Schedule C will automatically flow to Schedule FED. If you […]
TaxAct will transfer the amount of W-2 income entered during the Federal Q&A to the amount in the Gross Wages from Federal box, including your military income. To view or verify your U.S. Military Enlisted Pay in the TaxAct program: TaxAct Online From within the TaxAct return, navigate to the State tab from the side menu. […]
Below are instructions for entry of multiple state estimated tax payments. These steps are necessary to ensure that the correct amount flows to the individual state return you are currently filing and the Federal Schedule A line 5 State and local income taxes or general sales tax in the event you are itemizing deductions on the […]
Michigan Schedule of Apportionment (MI-1040H) is not limited to businesses with assets or employees. It is used to apportion business income when that income is taxable both within and outside Michigan. The form uses a sales factor apportionment method which is calculated by dividing total Michigan sales by total sales everywhere. “Sales” includes gross receipts from […]
If you were a Massachusetts resident for part of the tax year and also received Massachusetts-source income while you were a nonresident, you may need to file Form 1-NR/PY as both a nonresident and a part-year resident. Complete Schedule R/NR, Resident/Nonresident Worksheet, to calculate the portion of income earned while a Nonresident and the portion […]
The public pension exemption is calculated on Missouri Form MO-A, Part 3 (Section A). It applies to eligible federal, state, and local government pensions, including but not limited to military and Missouri state employee retirement benefits. Eligible taxpayers may subtract public retirement benefits up to the maximum Social Security benefit amount, subject to coordination with […]
The Arizona Credit for Increased Excise Taxes is a refundable credit available to taxpayers who are not claimed as dependents by another taxpayer and whose federal adjusted gross income is: $25,000 or less if married filing jointly or head of household $12,500 or less if single or married filing separately. The credit is generally $25 […]
An amount up to $50,000 per tax year 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 […]
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, follow the steps below. TaxAct Online From within the TaxAct return, navigate to the State tab from the side […]
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: TaxAct Online From within the TaxAct return, navigate to the State tab from the side menu. Click California under the State tab to access […]
Delaware allows eligible taxpayers aged 60 and older to subtract up to $12,500 of qualifying pension and eligible retirement income. For taxpayers under 60, the limit is $2,000. This exclusion applies to certain retirement income sources. For more information, visit Delaware.gov – Personal Income Tax FAQs To review or modify Pension Exclusion subtractions for a […]
Georgia allows a Retirement Income Exclusion on Form 500 Schedule 1 for taxpayers who are: Age 62-64, or Permanently and totally disabled regardless of age. The maximum retirement income exclusion is $35,000 for those 62-64 (or permanently disabled under 62). For taxpayers 65 or older, the retirement exclusion is $65,000 per qualifying individual. This exclusion […]
Any child support received should be reported on Line h of Vermont Schedule HI‑144 in the column for the household member who received it. It is included in the household income calculation, subject to any applicable adjustments, and contributes to the final Household Income amount reported from the schedule. To enter or review this information […]
The Indiana Partnership Long-Term Care deduction will be reported Form IT-40 Schedule 2, Line 11 using code 608. To enter the Indiana Partnership Long-Term Care deduction in TaxAct: TaxAct Online From within the TaxAct return, navigate to the State tab from the side menu. Click Start/Edit to begin the State return. On the page Review and […]
If you are eligible to claim the Indiana Renters Deduction and paid rent to more than one landlord during the year, follow the steps below to enter the information into TaxAct. TaxAct Online From within the TaxAct return, navigate to the State tab from the side menu. Click Indiana under the State tab to access the […]
New Mexico Form RPD-41326 Rural Health Care Practitioner Tax Credit Claim is a fillable form. Once the fillable form is completed, it will become a part of the return and will be electronically filed and/or printed with the return. NOTE: New Mexico requires documentation to support a claim for the Rural Health Care Practitioner Tax Credit. Eligible […]
Contributions to eligible West Virginia SMART529 college savings programs may qualify for a modification reducing federal adjusted gross income on your West Virginia income tax return. Taxpayers who make payments or contributions to qualifying prepaid tuition contracts or college savings plans administered under West Virginia’s SMART529 program may claim the modification in the year the […]
Military personnel stationed inside or outside Virginia may be eligible to subtract up to $15,000 of qualifying military basic pay received during the taxable year if they are on extended active duty for more than 90 consecutive days. If qualifying basic pay exceeds $15,000, the subtraction is reduced dollar-for-dollar by the excess amount. For example, […]
Maine allows certain individuals who collect sales tax on casual rentals of living quarters to report and remit that tax on their individual income tax return instead of filing separate sales tax returns, provided they meet eligibility requirements and the tax due does not exceed the filing threshold. Casual rentals include the rental of a […]
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. The information entered in this section will flow to Schedule IA 126, and from there the credit will flow to Line 51 of Iowa Form IA 1040. TaxAct Online […]
Massachusetts allows renters to deduct 50% of rent paid for a principal residence, up to $4,000. The Massachusetts rental deduction is reported on Line 14 of Massachusetts Form 1. The program will automatically determine your rental deduction based on the amount of qualifying rent you paid during the tax year. TaxAct Online To enter the […]
Form 4013 – Resident Tribal Member Annual Sales Tax Credit, Line 4 requires a two-digit Tribal Code which from a federally recognized Tribe in Michigan. Only Tribes with a State/Tribal Tax Agreement can file Form 4013. To access the Form 4013 Michigan Resident Tribal Member Annual Sales Tax Credit: TaxAct Online From within the TaxAct […]
TaxAct supports Form MI-1040CR-7 (Home Heating Credit). To enter the information for Form MI-1040CR-7: TaxAct Online From within the return, navigate to the State tab from the side menu. Click Michigan under the State tab to access the Michigan Quick Q&A Topics screen. Click Credits from the list of topics. On the screen titled Credits for […]
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 the Michigan Homestead Property Tax Credit: TaxAct Online To enter the Michigan Homestead Credit Claim in TaxAct Online: From within the […]
For the security of your personal information, a printed or digital copy of your TaxAct Online return is only available after you have signed into your account. You can then print or save a PDF of the return. TaxAct Support cannot mail, fax, or email a paper or electronic copy. For help with your username […]
Paid Family Medical Leave (PFML) is a state-offered benefit designed to provide eligible employees who work in Massachusetts with up to 26 weeks of paid leave for medical or family reasons. PFML is funded through employer and employee contributions and is separate from both the federally mandated benefits offered by the Family Medical Leave Act […]
A CP14 notice is issued when IRS records show a tax balance due after processing a return. The notice shows the tax reported on the return, the payments the IRS applied to your account, and the remaining underpayment they have calculated. Check the payments as outlined on the notice the IRS has applied to your […]
Preparers have the option to use the “Do Not File Client Copy” watermark on the printed client copy of a return. This is in addition to the “Do Not File” watermark. To print the client copy with this watermark: From within your TaxAct Professional Edition program, on the Client Manager screen, double-click the client’s return […]
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 displayed on Schedule 7 Line 6, and Item 5 in Section 2 of Schedule H. Indiana Schedule 7 reports additional information required for the Indiana return. […]
You can create and file tax returns for the current and two prior tax years with TaxAct. Go to Access Current or Prior Year Return for instructions to access and/or view previously e-filed returns. Open/Create If you were a prior-year TaxAct Online user, but you did not finish your prior-year return (or if you need to […]
You can now download files for all your clients at once by following the steps below: For more information about using Client Xchange, see the Client Xchange User Guide. Error If your clients have a large number of files, you may get an error that says: “There was a problem preparing your download. The page […]
As 2025 TaxAct state editions are updated, details will be added below to highlight what’s new in each release. Download Information | Federal Update Information | https://www.taxact.com/forms Alabama 2025 1040 V1.0 01/09/2026 – Form 40NR (Nonresident return) not approved for paper or electronic filing. V1.01 01/15/2026 – Form 40NR can be e-filed or paper-filed. No limitations. […]
Maryland is upgrading its tax systems as part of the transition to Maryland Tax Connect. During this transition, some online services will be unavailable, and acknowledgments will be delayed. Maryland Tax Connect for Individual Filers is scheduled to launch on September 1, 2026, when normal processing is expected to resume. You can still e-file Maryland […]
To locate the TaxAct Terms of Service, see https://www.taxact.com/terms-of-service. To locate the TaxAct Privacy Notice, see https://www.taxact.com/privacy-notice.
Overview TaxAct proudly offers Audit Defense, Powered by Drake Software. This offering is a post-filing service that gives your clients (taxpayers) access to credentialed tax experts when they receive an IRS notice, state notice, audit inquiry, or experience tax-related identity theft. For eligible cases, the Audit Defense team assists with case communications and documentation related […]
Table of contents Foreign Wages Online Desktop Foreign Retirement Income Online Desktop Related Links 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 […]
When you are a full-year resident of any state, generally you are required to include on that return all income earned regardless of the state you earned it in. If you also have income earned in another state where you did not live (your nonresident state), you are usually allowed a credit on your resident […]
If the school district tax withholding was not listed separately from the Ohio locality withholding on your Form W-2, enter the amounts in the Q&A interview as if they were listed separately to get the correct school district withholding amount to transfer to Ohio Form SD 100, School District Income Tax Return. Follow the steps […]
Overview Beginning with Tax Year 2026, E-Signatures will be offered through TaxAct Professional’s new Client Portals software. While the e-signature experience may look a little different, the new solution is designed to give professional tax preparers more flexibility, lower-cost signature options, and a more integrated client collaboration experience. Signature Options As part of this change, […]
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 […]
To calculate estimated tax payments needed for the current tax year (available only in the early-release version of the software): From within your TaxAct return, click Federal. On smaller devices, click the menu in the top left corner of your screen, then click Federal. Click 2025 Estimated Tax Payments, then click Yes. Continue with the […]
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 […]
If your preparer has requested approval on one or more files, follow these steps to review and submit your decision: Click Approve File in the email you receive. Log in to your account. Click the Files tab. Under From [Company Name], locate the file. Click the yellow Pending Approval button to review the file, then […]
In TaxAct Pro, click the Portals tab. Alternatively, log in to My Account and click Client Portals. Click the Clients tab. Locate the client in the list and click once to open their Portal details. Tip: You can use the Search bar or click a column header to sort. Click the Client Files tab. Click […]
You will receive an email that says [Firm Name] has requested files. The email includes two links. If the firm entered an optional message, it also appears in the email. The first link is the direct upload link and can only be used once. The second link opens your regular portal login page. To upload […]
The Request Files feature sends an email to the client with a secure link they can use to upload files directly to the To [Company Name] folder without logging in to their portal. The link can only be used one time; however, the client can upload as many files as needed during that upload session. […]
Upload Files Navigate to your preparer’s Client Portals website and locate the Guest Exchange panel. Click Upload Files. The upload screen is displayed. Complete the required information fields. Click Select to browse for the file(s) to upload. Click Upload. A verification window appears. Click Upload again to confirm. An email notification is sent to the […]
The Guest Exchange is a panel that appears on your Client Portals login page. Clients can use this panel to upload files to you or as an alternate way to download guest exchange files from you. Before using Guest Exchange, you must turn it on so it is accessible to you and your clients. Outgoing […]
You have received an invitation to use a Portals account from your tax professional. This article provides an overview of how to use your new portal to connect with your preparer. Activation When your tax preparer creates your portal, you will receive an invitation email. This email contains your username and a link to create […]
The following tabs are client-specific and are visible after opening the client details using these steps: In TaxAct Pro, click the Portals tab. Alternatively, log into My Account and click Client Portals. Click the Clients tab. Locate the client in the list and click once to open their Portal details. Tip: You can use the […]
Upload To upload documents to your clients (taxpayers), follow the steps below. In TaxAct Pro, click the Portals tab. Alternatively, log into My Account and click Client Portals. Click the Clients tab. Locate the client in the list and click once to open their Portal details. Tip: You can use the Search bar or click […]
New Portal To add a new portal for your client (taxpayer), follow the steps below. Steps vary depending on whether you have already created a client return in the Client Manager or not. Bulk client account creation is not supported. Client Return Already Exists Client Return Doesn’t Exist Yet Activation Email To send an activation […]
Using Client Portals Messenger, you can: Exchange messages with your client. Export a transcript of your conversation with that client. To message your client (taxpayer), follow these steps: In TaxAct Pro, click the Portals tab. Alternatively, log into My Account and click Client Portals. Click the Clients tab. Locate the client in the list and […]
When you purchase Client Portals for TaxAct Pro, you will have access to a new tab within your desktop program. This tab is visible to the Firm owner once your purchase is complete (you may need to log out and log back into the desktop program to see the new tab). Edit Access To add […]
Client Portals has the features you need to provide appointment-free tax preparation. The following guide will walk you through the steps for purchasing, configuring, and using your new Client Portals subscription. If you have not purchased, review product information in Professional Editions: Client Portals – Overview or visit the Client Portals product page. Purchasing You […]
Client Portals Powered by Drake Software provides a secure client file exchange, allowing preparers and their clients to exchange confidential tax documents securely and conveniently. It is web-based and works with most browsers and computers. Since it is a paperless document exchange, preparers spend less time printing, faxing, emailing, or mailing returns and other documents […]
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 […]
You can edit returns for the current and two prior tax years using the TaxAct Online program. Returns over two tax years old are unable to created or edited. You can access pdfs and print copies of returns that you previously e-filed or paid for in TaxAct Online as far back as 2019. If you need […]
Once you receive your order confirmation, you can download and install your TaxAct Desktop program. NOTE You can also download and install previously purchased software at no additional charge by following the steps below. To download TaxAct (Consumer), follow the steps below: Sign in to your TaxAct Account online. Click My Account > My Downloads. […]
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 […]
To print a client return or forms, you must have the TaxAct program and return file on your computer. If you no longer have the return file, contact the IRS at 1-800-829-1040 to request a copy. TaxAct does not retain copies of returns that were prepared and e-filed with the TaxAct Desktop program. The print […]
New Customers There are multiple options available to accommodate the specific needs of your tax practice. See https://www.taxact.com/professional/products/pricing for detailed package and pricing information. Once you determine the type of returns you’ll be preparing and how many users you need (Single User or Multi-User), choose the edition or bundle that fits your practice and click Pre-Order. […]
Orders are billed at the time of purchase. Multiple Charges If you see multiple charges on your credit card, review your TaxAct account to check the status of your filings. The e-filing status will help you understand why you may see multiple charges. If you purchase the federal program, and then later add a state […]
To update your payment information, follow these steps: Sign in to your TaxAct Account online. Click Orders & Downloads. Select the blue link update credit card information. Click the Order ID and follow the on-screen instructions to update your payment details. This option may not be available for all account types. For more information, see […]
Client Xchange is no longer available after October 31, 2026. If you have not downloaded your documents, please do so as soon as possible. See Client Xchange – Bulk Download Files for details on how to download your files. See Professional Editions: Client Portals – Overview for details on the new client portal experience. If […]
How do I access TaxAct tools in Claude? You can connect Claude to TaxAct using TaxAct’s Model Context Protocol (MCP) server. Once connected, you can explore filing options, compare costs for your situation, and get guided help in chat—similar to working with TaxAct from your browser, without leaving Claude. Watch the video TaxAct in Claude […]
Call the IRS With Your Tax Questions Live assistance is available Monday through Friday, typically from 7 AM to 7 PM local time. Individuals: 1-800-829-1040. Businesses: 1-800-829-4933. Automated assistance is available 24/7. Individuals can call 1-800-829-1040 to contact the IRS toll free. Contact Your Local IRS Office IRS Taxpayer Assistance Centers (TACs) provide in-person help […]
TaxAct is committed to protecting your tax information. We partner with the IRS, state tax administrators, and other software providers to prevent tax and identity fraud. As part of this effort, we implement advanced security measures, including: Strong password requirements Email address verification Account lockouts after multiple failed sign-in attempts Trusted device and IP address […]
Your Adjusted Gross Income (AGI) amount from last year is used as an electronic signature for this year’s return. This information helps the IRS confirm the identity of the person filing the return. Error codes beginning with “IND-031” and “IND-032” are issued when the AGI entered does not match the information in the IRS e-file […]
Are all taxpayers who file electronically required to pay any balance due electronically? No. Taxpayers who prefer to pay by check or money order should file Form 1040-V Payment Voucher. What if I filed last year’s return using an ITIN (IRS Individual Taxpayer Identification Number)? If the taxpayer had an ITIN (IRS Individual Taxpayer Identification […]
You can e-file extension requests for a group of eligible individual taxpayers by following the steps below. Open the Client Manager. Select the clients you want to include: Click the first client, then hold CTRL and click additional clients. Right-click on one of the selected clients and choose E-File > 1040 Extension (Batch). Alternatively, click […]
While working on your taxes using TaxAct, you have the option to promptly engage with one of our credentialed tax experts. Open your return in TaxAct. Click Get Live Tax Advice in the top right corner. Select the level of service that you want by choosing Chat or Speak under either Xpress Connect or Unlimited […]
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 […]
For tax purposes, travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. An ordinary expense is one that is typical and widely accepted in your line of work. A necessary expense is one that is helpful and appropriate for running your business. It does not […]
Safe Harbor Payment To reduce or avoid penalties, pay the following by April 15th: 90% of your current year tax, or 100% of last year’s tax (110% if your prior-year AGI amount was greater than $150,000; $75,000 if MFS) Underpayment Penalty & Interest Paying the safe harbor amount helps reduce penalties, but interest may still […]
If you need an extension of time to file your tax return, you can create and file an extension Form 4868 to request a 6-month extension of time to file your return through TaxAct. Note the following: If you expect a refund, you don’t need to file an extension, but it will protect you from late-filing […]
To create a TaxAct account, follow the steps below. From the TaxAct Home Page, click Create Account in the upper right-hand corner. Enter your email address and a mobile phone number. NOTE: You cannot create a new account using an email address or phone number that is already linked to another account. If you have […]
To delete a return, follow the steps below. If you wish to add or remove a state from a return, see Add or Delete State Return for more information. Important Notes: Once a return is deleted, it cannot be restored. You cannot delete a return if: It has already been e-filed or printed. An extension has […]
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 […]
TaxAct Online has a Classic view and a Dashboard view. Classic has a dark purple menu on the left and Dashboard has a white menu with light purple highlighting. If you are in the Dashboard View, you can switch back to Classic View by following these steps: On the left, click Resources. On smaller devices, […]
Annual PCI compliance validation is required for all merchants who process credit card payments through Drake Pay®. This validation ensures alignment with current PCI Data Security Standard (PCI DSS) requirements and industry best practices for secure payment processing. Drake Pay has partnered with MAXpci to facilitate PCI compliance. After enrolling in Drake Pay, you will receive an […]
To upgrade to a different TaxAct product, follow the steps below. Steps vary depending on whether you use the Online or Desktop program. Online Dashboards Open your TaxAct return. In the navigation pane on the left, click Resources. Under My Return, click the Upgrade Options tile. Locate the name of the TaxAct software you’d like to […]
Enterprise Editions files can be shared on a network, either your own local server or online to TaxAct’s secure servers. During the TaxAct Professional Edition setup process, you’ll be prompted to set up your practice. At this point, you need to choose whether to save shared files on your local network, or on TaxAct’s secure […]
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 […]
The IRS Free File (FFA) program is offered through the IRS/State website. Guidelines for each trusted partner are detailed on the site. If you qualify, there are a few points worth noting. You are under no obligation to buy any products or services. When choosing a company, be sure to click the link to their […]
TaxAct offers separate online and desktop consumer business programs for businesses registered as a Sole Proprietorship, Partnership, Corporation, or S-Corporation. We offer two online or desktop purchase options for the federal business programs: as a separate product or in a bundle with our 1040 product. Sole Proprietorship is not offered as a bundle because is […]
To access or print the application summary, follow these steps: Go to https://www.irs.gov/tax-professionals/e-file-provider-services . Log in to your account. Steps vary depending on which login type you use with IRS. Select your organization from the choices given and click Submit. Read and accept the Terms of Service. You will be redirected to the External Services […]
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 […]
If you owe tax, you have several options for paying the tax due on your federal tax return. IMPORTANT: The tax liability, or balance due on the return, is paid separately from your TaxAct fees. The TaxAct fee does not include taxes owed. For more information about TaxAct product fees, see the TaxAct Product Fee Payment […]
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 […]
As 2025 TaxAct federal editions are updated, details will be added below to highlight what’s new in each release. Download Information | State Program Updates | TaxAct forms 1040 Edition 2025 Limitations Form 1062 – Deferral of Tax on Gain From the Sale or Exchange of Qualified Farmland Property to Qualified Farmers is not available. […]
If you receive a special offer for discount pricing on a TaxAct product that has a link, you must click the special offer link provided in the message. Discounts will not be applied if you skip this step. After clicking the link, register for a new account or sign in to your existing account, as applicable, […]
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.
The taxpayer’s prior year Adjusted Gross Income (AGI) amount is used as an electronic signature for the e-filed return. This information helps the IRS confirm the identity of the person filing the return. Error codes beginning with “IND-031” and “IND-032” are issued when the AGI entered by the taxpayer does not match the information in […]
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 […]
NOTE: Refund Advance loans have ended for 2026. If you are interested in learning about a Refund Advance, visit https://www.taxact.com/refund-advance. The following answers some frequently asked questions. How can you offer this at no extra cost? It’s true—you don’t have to pay any fees for a Refund Advance loan. If you are eligible for a Refund […]
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 […]
TaxAct State Editions Anticipated release dates for TaxAct State Editions are listed below, with most releasing in January. For more details about forms available in each return type, go to https://www.taxact.com/forms. For more information on state release information, including updates on the availability of forms to print, see State Program Updates. 2026 Alabama 2026 Return […]
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 […]
For more general information about Trump Accounts, see the Trump Account Elections – Form 4547 (IRC 530A) FAQ. If you are ready to add Form 4547 to your return, follow the steps below. Make sure you have entered dependent information in your return before proceeding. You are prompted to complete the questionnaire for each child […]
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 […]
Executive Order 14247 mandates the transition to electronic payments and phases out disbursements by paper check. In accordance with this order, the IRS will be phasing out paper checks beginning on September 30, 2025. See the news alert IR-2025-94 for details. When filing your return through TaxAct, if you have a refund you can select either Direct […]
Tax return preparers who prepare all, or substantially all, of a federal tax return for compensation are subject to certain requirements including registration in the IRS PTIN Requirements for Tax Return Preparers webpage. The Preparer Tax Identification Number (PTIN) is mandatory for all paid preparers since January 1, 2011. Tax preparers must pay a fee […]
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 […]
Below are the top FAQs for signing into your account: Sign-In Instructions (Online or Desktop) Recover Your Account (Locked or Disabled) If you can no longer access the phone number or email address on your account, use the “alternative verification” steps detailed in the above FAQ. Manage or Update Account Information (Name, Address, Username, or […]
The IRS doesn’t initiate contact with taxpayers by email, text messages, or social media channels to request personal or financial information. This includes requests for PIN numbers, passwords, or similar access information for credit cards, banks, or other financial accounts.The IRS provides tips a list of common scams on their Recognize tax scams and fraud […]
The Earned Income Credit (EIC) is a refundable federal tax credit that may reduce your tax and increase your refund if you qualify. It’s designed to help working individuals and families with low to moderate income amounts. For full details, see IRS Publication 596. Rules for All Taxpayers To qualify for the EIC in 2025, […]
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 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, […]
Use the e-File and Tax Refund Status webpage to check the status of your own income tax return filed through the TaxAct. Note. If you cannot find your return status: You may be entering the wrong Social Security Number (SSN). The SSN entered should be the primary taxpayer SSN for the return (first SSN listed on Form […]
You can purchase the professional program for the current and immediately prior tax years online. If you want to use a TaxAct professional edition program for an earlier year, call Sales at (319) 536-3571 for assistance. Go to our Previous Year Editions webpage for more information. You can electronically file returns for the current and […]
The TaxAct mobile app is now available for iOS and Android users! Visit the Apple App Store or the Google Play Store, search for TaxAct, and download the app to your device. Once installed, sign in using the same username and password you use on the TaxAct website.
After selecting the appropriate TaxAct product for your tax situation, you’ll need to pay the associated fee. This is different from a balance due (taxes owed) on the actual federal or state return. Online Program Fees Visit the Online DIY Tax Filing page for product and pricing details. You can pay using a credit or […]
The IRS has not announced the date that they will begin accepting individual returns in 2027. The official filing season start dates are posted each year on the IRS website. The IRS accepts returns on a first-come, first-served basis. Because of this, we strive to have our product ready in time for you to be […]
If you rent a property for less than fair market value, the IRS generally treats it as not rented for profit. You must still report the rental income that you receive for this activity. According to IRS Publication 527, not-for-profit rental income is reported on Schedule 1, rather than on Schedule E. You cannot deduct […]
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 […]
Rule F8962‑070 is an IRS e‑file rejection code that means the return was rejected because the IRS has records showing that you or a member of your tax family had advance premium tax credit (APTC) from a Health Insurance Marketplace, but Form 8962 Premium Tax Credit was not included with the e‑filed return. You […]
To report the sale of your main home on an installment contract in the TaxAct program, follow the steps below. By completing this section, you are calculating: The gain or loss on the sale of your main home, If a gain, how much will be excluded, Total gross profit from sale (Form 6252, Line 16), […]
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 […]
If you had to repay an amount that you included in your income in an earlier year, you may be able to deduct the amount repaid from your income for the year in which you repaid it; OR if the amount you repaid is more than $3,000, you may be able to take a credit […]
If you had to repay an amount that you included in your income in an earlier year, you may be able to deduct the amount repaid from your income for the year in which you repaid it. Method 1 — Deduction Figure your tax for 20YY claiming a deduction for the repaid amount. If you […]
Rental Income from Personal Property 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 […]
To separately report more than one foreign country for (Schedule K-1 (Form 1065), Box 16 or Schedule K-1 (Form 1120-S), Box 14), you would need to create a separate Schedule K-1 and only complete Box 16 or Box 14, respectively. See Schedule K-1 (Form 1065) – Entering in Program or Schedule K-1 (Form 1120-S) – Entering […]
To enter the interest income from a seller-financed mortgage in the TaxAct program, follow the steps below: TaxAct 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 Seller-Financed Loan […]
The TaxAct program will allow you to e-file up to 20 Seller-Financed Mortgage (SFM) statements. If you have more than 20 SFM statements, you can still complete your tax return in TaxAct, but you will not be able to e-file. To ensure the correct amounts will be transferred to the main return, total the amounts […]
When a return results in a refund, taxpayers have several options for receiving their refund proceeds. Direct Deposit You can elect to have a refund directly deposited into up to three accounts at a bank or other financial institution (such as a mutual fund, brokerage firm, or credit union) in the United States. If you […]
You can enter vehicle expense information in the TaxAct program while entering expenses on Schedule C. See the Schedule C – Entering Sole Proprietorship in Program FAQ for details. This will transfer to Schedule C (Form 1040), Profit or Loss From Business, Line 9. To enter Schedule C Vehicle Expenses in TaxAct: TaxAct Online From […]
If you itemized deductions on your prior year tax return, then a state refund that you received this year may be taxable.If you claimed the standard deduction on the prior-year return, the state tax refund is generally not includible in federal taxable income because no federal tax benefit was derived from the payment of state […]
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. Box 15 on Form W-2, Wage and Tax Statement, must list the state for which the employer withheld […]
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. TaxAct Online Dashboard From within your TaxAct return, click Deductions & Credits. On […]
TaxAct does not calculate this allocation for state taxes. If the amounts for Prior Year State Income Tax Refund (to be included in taxable income on the current year’s return) and the deduction for Prior Year State and Local Estimates Paid After 12/31/20YY need to be adjusted, the taxpayer would need to manually perform this […]
If you have a situation where you made a contribution to a Roth IRA and later recharacterized part or all of it to a traditional IRA, review the IRS Instructions for Form 8606. NOTE: A conversion of a traditional IRA to a Roth IRA, and a rollover from any other eligible retirement plan to a […]
If you have a situation where you made a contribution to a traditional IRA and later recharacterized part or all of it to a Roth IRA, review the IRS Instructions for Form 8606. NOTE: A conversion of a traditional IRA to a Roth IRA, and a rollover from any other eligible retirement plan to a […]
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 […]
To enter long-term care premiums paid, 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. Enter your medical insurance premiums paid (if applicable), […]
To claim personal property taxes paid in the TaxAct program, follow the steps below. The TaxAct program will transfer the information to Schedule A (Form 1040). If you don’t know if your vehicle registration fees are based on value, contact your taxing authority for verification. NOTE: For tax purposes, taxes you pay on your home […]
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). TIPS: If you review the […]
As a trader (including day traders), you report all of your transactions on Form 8949, Sales and Other Dispositions of Capital Assets. If you are in the business of buying and selling securities for your own account, you may also file a Federal Schedule C (Form 1040) Profit or Loss From Business to report any […]
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 […]
Before you enter your foreign currency transactions, you must determine whether the gain or (loss) is subject to IRC (Internal Revenue Code) 1256 or 988. If you are unsure how to classify your trades, it is best to seek professional tax advice from your broker or a qualified tax professional (Enrolled Agent, CPA, or attorney). […]
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 […]
All TaxAct Customer Support: (319) 373-3600 Tax Professional Support: (319) 731-2682 Refer to our Contact TaxAct Service & Support page for support hours.
Generally, you can recharacterize (correct) an IRA contribution by making a trustee-to-trustee transfer from one IRA to another type of IRA. Trustee-to-trustee transfers are made directly between financial institutions or within the same financial institution. You generally must make the transfer by the due date of your return (including extensions) and reflect it on your […]
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 […]
A valid SSN or ITIN must be obtained by the extended filing deadline in order to receive certain credits on the 20YY return. For most calendar year taxpayers, the extended filing deadline is October 15 of the following year; however, there may be an exception if you are living outside of the country. See IRS […]
You can use the Forms Assistant to search for and add Schedule OI (Form 1040-NR) to your return. In dashboard navigation, go to Resources, scroll to the Assistants section, and select Forms Assistant. In classic navigation, click Tools > Forms Assistant. On desktop, click Forms and locate the federal form in the Forms Explorer. […]
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 […]
To indicate in the TaxAct program that you receive your mail in care of a third party, 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 […]
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 […]
The amount you can contribute to a Health Savings Account (HSA) is limited to zero for any month you are enrolled in Medicare. See IRS Publication 969 for details. To enter HSA contribution amounts in the program, follow the steps below. Online Dashboard From within your TaxAct return, click Deductions & Credits. On smaller devices, […]
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 […]
The TaxAct program will automatically create Form 4562 if the date of the improvement entered on Form 8829 is in the current tax year. TaxAct supports only one addition/improvement for Federal Form 8829. If you have more than one addition/improvement, you can still file your return with TaxAct, however you will need to file a […]
See IRS Publication 519 for details on which forms you are required to file, including information regarding the different rules for your period of residence and period of nonresidence. TaxAct supports the creation of dual-status returns. To accommodate for this situation, taxpayers need to prepare multiple returns in TaxAct. An example of how taxpayers would […]
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 […]
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 are prompted to enter the information for the Business Use of Home when entering Schedule C – Entering Sole Proprietorship in Program.
You are prompted to enter the start-up costs when entering Schedule C – Entering Sole Proprietorship in Program. Note. If you have already made amortization entries, then you will be brought to the screen Business Income – Amortization Review. The current year expense and amortization amount will appear on Form 4562. When you print the […]
There are two main methods of accounting available for a business to use: cash method accrual method To change your method of accounting, you generally must file Form 3115. You can use the Forms Assistant to search for and add Form 3115 to your return. In dashboard navigation, go to Resources, scroll to the Assistants […]
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: TaxAct 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 […]
If you received Form(s) W-2, Wage and Tax Statement, and some or all of your wages are exempt by tax treaty, you will need to manually adjust your W-2 entry to reflect only the wages that are not exempt by tax treaty. Wages which are exempt by tax treaty should be reported on Schedule OI. […]
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. If the IRS doesn’t approve your installment […]
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 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 […]
Form 8862, Information To Claim Certain Credits After Disallowance, is used to claim the Earned Income Credit (EIC) if this credit was previously reduced or disallowed by the IRS, and you now wish to claim the credit on this year’s return. To enter information regarding Form 8862 in the TaxAct program, follow the steps […]
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 […]
To access Form 8845 Indian Employment Credit in the TaxAct program, follow the steps below. The credit amount in the TaxAct program will transfer to Form 3800, General Business Credit, which will transfer to Line 6 of Schedule 3 (Form 1040), Additional Credits and Payments. Online Dashboard From within your TaxAct return, click Resources. […]
Income earned from assets held in a UGMA or UTMA account is generally considered the child’s unearned income for federal tax purposes, even if the assets were gifted by a parent, grandparent, or another person. If your child has interest, dividends, or other unearned income, you must decide whether to file Form 8814, Parents’ Election […]
The TaxAct program does not support the returns for the U.S. Virgin Islands; however, if you were a U.S. Citizen or Resident Alien and not a Bona Fide resident of the U.S. Virgin Islands, you may only need to file Form 8689, Allocation of Individual Income Tax to the U.S. Virgin Islands, and send a […]
Form 8843, Statement for Exempt Individuals and Individuals with a Medical Condition, is used to exclude days of presence in the U.S. for certain individuals. The form needs to be filed with your Form 1040-NR, and if you don’t need to file a return, send the form to the IRS. Attach Form 8843 to your […]
Form 8840, Closer Connection Exception Statement for Aliens, is used to claim the closer connection to a foreign country exception to the substantial presence test. Note. You must have selected to file Form 1040-NR in order to access Form 8840. For information about the substantial presence test, go to IRS Publication 519. You can use […]
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 […]
To enter a description and an amount for Line 8 of Schedule 1 (Form 1040) to reduce the taxable wage amount from Form 1040, U.S. Individual Income Tax Return Line 1, if that is appropriate in your situation, go to our Form 1040 – Other Income FAQ. For details about tax treaties and exemptions for […]
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 […]
See Topic No. 157 Change Your Address – How to Notify the IRS for details on when you need to file Form 8822 – Change of Mailing Address. Federal Form 8822 is available in the following TaxAct programs: Professional Editions – 1040, 1065, 1120-S, and 1120 returns Consumer 1040 Edition You can use the Forms […]
See Form 8801 – Entering Credit for Prior Year Minimum Tax in Program for details on how to access the Form 8801 data entry. To remove your entries, go back through the form entry steps and remove the information that you had provided. Additional Information IRS Form 8801 in certain circumstances when a taxpayer paid […]
Federal Form 8801, Credit for Prior Year Minimum Tax – Individuals, Estates, and Trusts is for the calculation of a credit in certain circumstances when one has had the Alternative Minimum Tax (AMT) in a prior year. Certain numbers are automatically pulled into the form from the current year’s return in anticipation that the form […]
Federal Form 8621 is an Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund. You can use the Forms Assistant to search for and add Form 8621 to your return. In dashboard navigation, go to Resources, scroll to the Assistants section, and select Forms Assistant. In classic navigation, […]
What changed in 2025: The cap on the state and local tax (SALT) deduction increases: From $10,000 to $40,000, if you’re filing jointly (MFJ) or as head of household (HOH) From $10,000 to $20,000, if you’re married filing separately (MFS) NOTE The limit increases by 1% each year through 2029 You can claim this higher deduction […]
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 […]
What’s new in 2025: The maximum Child Tax Credit (CTC) increases from $2,000 to $2,200 per qualifying child. Up to $1,700 of the credit may be refundable as the Additional Child Tax Credit (ACTC). Both the credit amount and refundable portion will be adjusted for inflation, so it may increase over time. The enhanced credit […]
If you have both a distribution from an IRA and contributions to an IRA in the current year, which may not be deductible because of your income level, you will need to use Worksheet 1-1 from IRS Publication 590-B, on page 15 when completing Form 8606, Nondeductible IRAs. This worksheet parallels and replaces the calculations […]
If you did not electronically file 8379 Injured Spouse Allocation when you filed your original tax return, you need to send the form to the Internal Revenue Service Center for the area where you live. Be sure to attach a copy of all Forms W-2, W-2G, or 1099, showing federal income tax withholding, to Form […]
To complete Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, (usually only done by the custodial parent), 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 […]
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 […]
Form 4797, Sales of Business Property, reports the sale of business property. To enter the sale of business property, 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 […]
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 […]
Investment (margin) interest deduction is claimed on Form 4952, Investment Interest Expense Deduction and the allowable deduction will flow to Schedule A (Form 1040) Itemized Deductions, Line 9 to be claimed as an itemized deduction, up to the amount of your investment income. To enter the information for Form 4952 in the TaxAct program, follow […]
You can use the Forms Assistant to search for and add Form 4972, Tax on Lump-Sum Distributions, to your return. In dashboard navigation, go to Resources, scroll to the Assistants section, and select Forms Assistant. In classic navigation, click Tools > Forms Assistant. On desktop, click Forms and locate the federal form in the […]
To enter a loss from a Ponzi-type investment scheme in TaxAct, 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 Itemized or Standard Deductions drop-down, then […]
Use Form 4684, Casualties and Thefts, Section B to report a casualty or theft loss on property used 100% for business. In TaxAct, enter the loss by following the steps below. Once entered, TaxAct will automatically carry the information to Form 4797 and then to Schedule 1 of Form 1040 as needed. Online Dashboard From […]
Personal casualty losses attributable to certain qualified disasters may be claimed as a qualified disaster loss on Form 4684 for the year the loss was sustained. See the current Instructions for Form 4684 and IRS Publication 547 for the definition of a qualified disaster loss and the disasters that qualify. If you have a casualty […]
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 […]
Form 3903 calculates the deductible moving expenses for active-duty military due to a military-ordered permanent change of station (PCS). 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 Instructions for Form 3903 for details. […]
Form 2848, Power of Attorney and Declaration of Representative, is used to authorize an individual to represent the taxpayer/corporation/partnership before the IRS. The authorized individual must be eligible to practice before the IRS. This power of attorney authorizes the representative to perform duties such as signing consents, extending the time to assess tax, recording […]
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 […]
If you paid child and dependent care expenses, but the individual care provider has not provided, and will not provide their Social Security Number (SSN) to you, you may still be able to claim the Child and Dependent Care Credit. You must show that you have completed your due diligence to obtain the information. You […]
If filing jointly, figure your and your spouses earned income separately. Your earned income amount will transfer to Line 4 of Form 2441, and your spouse’s earned income will transfer to Line 5 of Form 2441. If your spouse was a student or disabled, see the IRS Instructions for Form 2441. If you reported amounts on […]
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 […]
If the IRS rejects an e-file because of an Employer Identification Number (EIN) mismatch, you will receive rejection code FW2-502, 1099R-502-01, F2439-502, or FW2G-502. Keep in mind this type of rejection does not automatically mean the EIN is wrong, but it doesn’t agree with IRS records. An invalid EIN can result from one of three […]
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 […]
REJECTION CODE F1040-510 Primary Taxpayer Was Claimed As A Dependent on Another Return If your return was rejected because you were claimed as a dependent on another return, double-check the personal information you entered. If your name, SSN, or other data is incorrect, fix the mistake and resubmit your return. See Changing Basic Information (Name, […]
If your return is rejected with IRS rejection code R0000-902-01, the Taxpayer Identification Number (TIN) for the primary taxpayer has already been used on a return filed with the IRS. In most cases, the taxpayer’s social security number (SSN) was entered incorrectly. To fix this error and refile, go to the Changing Basic Information (Name, […]
See Form 2106 – Entering Unreimbursed Employee Expenses in Program.
Per diem for travel and meal expenses related to your business are entered when you are entering your federal Schedule C expenses. You are prompted to enter your business meals expenses when completing the business income interview. See Schedule C – Entering Sole Proprietorship in Program for details on accessing this section of the program. […]
Form 2106, 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. To file Form 2106 for Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, follow these steps. Online Dashboard From within your TaxAct return, click […]
Form 8283, Noncash Charitable Contributions, is used to report information about noncash charitable contributions. To enter this information 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. […]
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 your return generates a Net Operating Loss (NOL) for the current year, the TaxAct program will display a Green Alert titled “Explanation: Net Operating Loss.” This alert indicates that an NOL has been calculated and requires review. If your NOL is more than your taxable income for the year to which you carry it […]
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 code exception to taxation or if any amount withheld was […]
You can use the Forms Assistant to search for and add Form 1042-S to your return (under Documents Received). In dashboard navigation, go to Resources, scroll to the Assistants section, and select Forms Assistant. In classic navigation, click Tools > Forms Assistant. On desktop, click Forms and locate the federal form in the Forms […]
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 […]
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 code exception to taxation, or if any amount […]
The IRS Instructions for Form 1040-NR detail who must file Form 1040-NR. You can edit your personal information following the steps in Changing Basic Information (Name, SSN, Birthdate), and check the box Nonresident alien. Related Links Form 1040-NR – Itemized or Standard Deduction
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 […]
If you see “PRI” printed next to Line 1 of Form 1040, it’s because one of the following is true: You entered an amount of wages received for work done as an inmate in a penal institution (i.e. a prison or jail). You may have entered wages (or other earned income), and accidentally indicated that […]
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 […]
To enter household employee wages not reported on Forms W-2 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 Wages & Salaries drop-down. Click Add beside Household Employee […]
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 […]
To enter your capital loss carryover from a prior year 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 Investments & Savings drop-down. Click Add beside Capital Loss […]
The IRS instructions do not specify how many homes or properties you may include when deducting real estate taxes on Schedule A (Form 1040), Itemized Deductions. The only limitation appears to be that you cannot deduct on Schedule A the real estate taxes you paid for a property used for business. The taxes for business […]
To enter Form 1098, Mortgage Interest Statement, follow the steps in the Form 1098 – Entering in Program FAQ. To enter Form 1098 for real estate (property) taxes paid, follow the steps below: TaxAct Online Dashboard From within your TaxAct return, click Deductions & Credits. On smaller devices, click the menu at the top […]
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, […]
If you are completing the form and not filing the return, you will need to print the form and mail it to: Internal Revenue Service ITIN Operation P.O. Box 149342 Austin, TX 78714-9342 If you don’t want to mail your documents to the IRS, you may be eligible to use an IRS-authorized Certified Acceptance Agent […]
An Individual Taxpayer Identification Number (ITIN) is a nine-digit number assigned by the Internal Revenue Service to taxpayers who are not eligible to obtain a Social Security Number (SSN). Individuals must have a filing requirement and file a valid federal income tax return to receive an ITIN, unless they meet an exception. It is used […]
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 […]
To enter or review health insurance coverage information 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 Affordable Care Act […]
Generally, the IRS does not require all transactions to be reported on Form 8949, Sales and Other Dispositions of Capital Assets. For transactions with reporting category “A” or “D” (meaning the cost basis was reported to the IRS), if there is no adjustment code/amount they can be reported directly on Schedule D (Form 1040), Capital […]
2024 was the last year to file Form 5405. See First-Time Homebuyer / Home Owner Credit for details about prior year data entry or modification. 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. […]
Bona fide residents of Puerto Rico generally don’t have to file a U.S. federal return if all their income is from Puerto Rico. A federal return is required only when they receive income from outside Puerto Rico that exceeds the usual IRS filing thresholds, and Puerto Rico–source income is typically excluded from that return. U.S. […]
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 […]
Per IRS Publication 530, 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 Settlement or closing costs under Cost as Basis, […]
The standard deduction is calculated based on your demographic information and filing status.To compare your itemized deductions with your standard deduction or to force the program to switch to one or the other, go to our Force Standard or Itemized Deductions FAQ. To claim itemized or standard deductions in the TaxAct program, follow the […]
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 […]
You can include in medical expenses wages and other amounts you pay for nursing services. The services need not be performed by a nurse if the services are of a kind generally performed by a nurse. This includes services connected with caring for the patient’s condition, such as giving medication or changing dressings, as well […]
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 your filing status is Married Filing Separate (MFS), you will need to indicate whether you lived with your spouse during the year. Online Dashboards From within your TaxAct return, click About. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Beside your name, click Edit. […]
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. TaxAct Online Dashboard From within your TaxAct return, click About. On smaller devices, click the […]
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 […]
Under IRS rules, a married couple generally cannot file a joint return if either spouse was a nonresident alien during the tax year. However, when one spouse is a U.S. citizen or resident alien and the other is a nonresident alien, the couple may choose to file jointly by electing to treat the nonresident spouse […]
If your federal return is rejected due to Error Code F1040-511 or F1040SSPR-511, then the primary taxpayer is already listed as “Spouse” on a previously filed return with filing status “Married Filing Separate.” If one of the spouses already filed using “Married Filing Separately” as the filing status, the other spouse cannot file a separate […]
According to IRS Publication 519, most nonresident aliens cannot claim the standard deduction, however, a special rule applies to students and business apprentices from India who are eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty. They can claim the standard deduction if they do not claim itemized deductions. Except for […]
To help maximize your tax benefit, TaxAct compares your itemized deductions to the standard deduction for your filing status and uses whichever provides the greater deduction. To manually select a deduction method in the TaxAct program, follow the steps below: TaxAct Online Dashboard From within your TaxAct return, click Resources. On smaller devices, click the […]
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 […]
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 […]
Paid Family Leave Insurance benefits (PFL) reported on Form 1099-G, Certain Government Payments, are taxable on the federal return, but not the California return. They are treated like unemployment compensation and California excludes unemployment compensation from taxable income. See the Form 1040 – Unemployment Compensation FAQ for detailed steps. Related Links California Schedule CA Instructions […]
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 1120-S), Shareholder’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 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 […]
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 […]
Newspaper Carriers and Distributors typically receive Form 1099-MISC reporting their income. This is entered in TaxAct by following the steps in the Form 1099-MISC – Entering in Program FAQ. After you enter the income, if the income should not be subject to SE Tax, enter an adjustment on Schedule SE (Form 1040). Follow the steps […]
If you receive distributions from a Qualified Tuition Program (529 plan) or Coverdell RSA during the tax year, you will receive a Form 1099-Q. 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). The part […]
Enter your notary income or expenses on Schedule C (Form 1040). See the Schedule C – Entering Sole Proprietorship in Program FAQ for details. After you enter the income, enter an adjustment on Schedule SE (Form 1040), since notary public income is not subject to self-employment tax. Follow the steps in the Schedule SE – […]
If you are a self-employed nonresident alien living in the United States, the information below will help determine whether you are subject to self-employment tax. If you are not, but the tax is calculating on your return, the navigation steps below will allow you to stop that from calculating. Online Dashboard From within your TaxAct […]
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. TaxAct 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 […]
For taxpayers or spouses with an IRS approved Form 4361, follow the steps below to report the exemption in TaxAct. 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. Click […]
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. TaxAct Online Dashboard From within your TaxAct return, click Taxes & Miscellaneous. On smaller devices, click […]
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 your e-filed return or extension (Form 4868) was rejected, the nature of the error you receive dictates which section of the Q&A you will need to review to correct the error. After you have reviewed the applicable section(s) carefully and corrected any data errors, we recommend you print your return and review it again […]
Your return will be rejected if your Social Security Number, name, or a number from your Form W-2 was incorrectly typed. Review and correct your personal information by following the steps in Changing Basic Information (Name, SSN, Birthdate) FAQ. Then, repeat the filing steps to resubmit your return. If the correction requires you to print […]
To report foreign dividend or interest income, enter the information as though you had received a Form 1099-DIV, Dividends and Distributions, or Form 1099-INT, Interest Income, but leave off the Payer’s Federal Identification Number. This number is not required, and the return will still electronically file without the number. The information required by the IRS […]
IRS Instructions for Form 1116 discuss an election to claim the foreign tax credit without filing Form 1116. See Foreign Earned Income – Exclusion and Foreign Tax Credit (or Deduction) for details on entering foreign income and credit information. Form 1116 will not print with your return if it is not necessary.
Interview questions for Part III of Federal Schedule B (Form 1040) only appear automatically in the TaxAct program if you have: Over $1,500 of taxable interest or ordinary dividends, Had a foreign account, Received a distribution from, or were a grantor of, or a transferor to, a foreign trust. If you would like to enter […]
Interview questions for Part III of Federal Schedule B (Form 1040) only appear automatically in the TaxAct program if you have: Over $1,500 of taxable interest or ordinary dividends, Had a foreign account, Received a distribution from, or were a grantor of, or a transferor to, a foreign trust. If you would like to enter […]
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 […]
Canadian sourced retirement income may be entered in one of two ways. The amounts are then carried to the applicable lines of Form 1040. Social Security Benefits Foreign Employer Compensation (FEC) Worksheet Social Security Benefits Under the income tax treaty between the U.S. and Canada, benefits paid under the Canada Pension Plan (CPP), Quebec […]
Federal To apply a federal refund to next year’s estimated taxes, 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 Return Info drop-down. Click Add beside 20YY Estimated […]
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. See the IRS Instructions for Schedule A for details on what types of taxes can be entered […]
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 […]
Create a Passkey You can now set up a passkey to log into your account. This provides a more seamless and secure way to authenticate your TaxAct login. The steps to set up your passkey are detailed for common browsers below. Exact steps may vary depending on your device or browser or passkey selection. Note: […]
You can easily review your return manually, or with the TaxAct Double-Check feature, which can identify missing or incomplete information that may bring your return to the attention of the IRS, and alert you about possible tax saving opportunities. Manual Review Click About or Basic Info, then click Continue on each screen, visually reviewing […]
To enter a foreign address in TaxAct, follow the steps below. Online Dashboard From within your TaxAct return, click About. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Locate the Address line and click Start or Edit. Below the City/State, click Enter a foreign address. […]
If you’re using TaxAct Desktop, you can enter data directly into forms using Forms View. Here’s how to navigate and input data effectively: Accessing Forms View From within the client return, click Forms in the options bar to open the Forms Explorer (if not already visible). Use the Search Forms field at the top of Forms Explorer to find a specific […]
De Minimis Safe Harbor If you bought property or an asset for your business this tax year, this election lets you deduct the full cost of that property or asset now (expense), instead of getting a partial deduction each year for the remaining life of the property or asset (depreciation). This may help you get […]
The taxability of any settlement or judgment depends on what the payment is intended to replace; its character mirrors the nature of the underlying claim. Items treated as ordinary income generally include: Interest paid on an award or settlement. Payments for lost wages or lost business income, in most situations. Punitive damages, even when connected […]
TaxAct supports Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations. Currently, we only support the creation and electronic filing of five copies of Form 5471. If the return requires more than five copies of the form, the only option is to manually complete the additional copies and attach them to […]
To enter or modify your name, Social Security Number (SSN), or date of birth in the TaxAct return, follow the steps below: TaxAct Online Dashboard From within your TaxAct return, click About. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Review the information listed for […]
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 […]
An amount appearing in Box 3 of IRS Form SSA-1099, Social Security Benefit Statement, would not be entered in the TaxAct program in Box 5. Box 5 on the form is the Net Benefits for the current year and has already taken the amount from Box 3 into account. For steps on how to enter […]
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 […]
Form SSA-1099 (or SSA-1099-SM) shows the total amount of social security benefits you received during the tax year. Social security benefits include monthly retirement, survivor, and disability benefits. They do not include supplemental security income (SSI) payments, which are not taxable and do not need to be reported on your tax return. The taxable portion […]
TaxAct supports Form 8594, Asset Acquisition Statement Under Section 1060, in the following programs: Form 1040 (Individual) 1041(Estate and Trust) 1065 (Partnership) 1120 (Corporation) 1120-S (S-Corporations) Per the IRS guidelines (schema) for the e-filing of returns, only one copy of Form 8594 is allowed to be e-filed per return. To file multiple copies, you will […]
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 […]
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 […]
To enter the data on Form 4835 for farm rental 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 Business & Self Employed drop-down. Click Add beside Farm […]
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 […]
If you received a Form 1099-MISC, Miscellaneous Income, instead of a Form W-2, Wage and Tax Statement, the income you received is considered non-employee compensation or self-employment income. You need to complete Schedule C or Schedule F in the TaxAct program and then enter your Form 1099-MISC information. You may also need to complete Schedule […]
In most circumstances, when a Federal Government agency, financial institution, or credit union cancels or forgives a debt of $600 or more, you will receive Form 1099-C, Cancellation of Debt. The amount of canceled debt appears in Box 2. Other important information may appear in additional boxes, such as: Box 1 – Date of identifiable […]
If you received a Form 1099-A, Acquisition or Abandonment of Secured Property, you need to determine if there has been a cancellation of debt. The lender should have sent you a Form 1099-C Cancellation of Debt if any debt was canceled. If you have not received a Form 1099-C, you may want to contact your […]
According to the IRS, taxpayers may not need to report the sale of their 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. Excluding Gain on the Sale of Your Home Most taxpayers can exclude up to $250,000 […]
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 […]
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 […]
Use the steps below to enter mortgage interest that you paid if the amounts were not reported on Form 1098. 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 […]
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. […]
To enter the information in your TaxAct return when another individual (other than your spouse if filing a joint return) received a Form 1098, Mortgage Interest Statement, for interest you also were liable for, follow the steps below. Online Dashboard From within your TaxAct return, click Deductions & Credits. On smaller devices, click the menu […]
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 […]
See below for the detailed steps on how to enter or review your unemployment compensation information in the TaxAct program. It is reported on Schedule 1 (Form 1040). For more information, review Publication 525. Online Dashboard From within your TaxAct return, click Income. On smaller devices, click the menu at the top left corner of […]
Eligible educators 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 were paid or incurred for books, supplies, computer equipment (including related software and services), other equipment, and supplementary materials used in the classroom. NOTE For courses in […]
If you are attempting to select a student for the Student Worksheet, and you are not seeing any options other than “None Selected,” you may be missing basic information for the taxpayer, spouse or dependent. A student will not populate in this drop-down unless you have completed information for a taxpayer, spouse, and/or dependent (most […]
To access the student worksheet, follow the steps below. TaxAct will generally 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.). TaxAct Online Dashboard From within your TaxAct return, click Deductions & Credits. On smaller devices, click […]
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. Entering Education Expenses To enter your education expenses and qualifications, follow the steps […]
The Earned Income Credit (EIC) is calculated by the program automatically if the return qualifies for the credit. To remove the credit from a return that qualifies for it, you need to select the item that disqualifies your return or check the box I don’t want to or cannot claim the earned income credit this […]
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: TaxAct Online Dashboard From within your TaxAct return, click Deductions & Credits. On smaller devices, click the menu at the top left corner […]
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 […]
The TaxAct® program will automatically determine if the credit from Schedule R is applicable on the return based on the information entered (e.g. date of birth). If you are expecting this credit to calculate on your return, and the credit is not appearing on Schedule 3 (Form 1040), make sure that you have made the […]
If there was a name entered on the prior year return that was allowed the taxpayer to qualify for the Head of Household filing status, this information will be imported into the current year’s return. If it is no longer needed/accurate, there are two ways to update the information: Change the Filing Status selection. Once […]
To select or change your filing status in the TaxAct program, follow the steps below. TaxAct Online Dashboard From within your TaxAct return, click About. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Edit beside your name. Continue with the interview until […]
When you import a prior-year return, all of the applicable information is carried forward to your current year return. To change your filing status from “Married Filing Joint” to “Head of Household” after importing, you will need to remove any spousal information from your return. If you want to remove certain information, you will have […]
The disability status information entered in the Basic Information section is transferred to other parts of the TaxAct return: On Schedule R, Credit for the Elderly or the Disabled, to identify if an individual may be classified as disabled, In the Earned Income Credit (EIC) calculation to help determine if an individual can be claimed […]
Preparer Notes can be used by the paid preparer, electronic return originator, or taxpayer to provide additional, voluntary information related to the Form 1040, but it is not required to attach it. These notes are added to the return in the same area where the Election Explanations and Regulatory Explanations are entered. Online Dashboards From […]
If you have an inherited IRA, there are various possible scenarios that determine how you will complete your return using the TaxAct® program. These scenarios are listed below, along with instructions for entering the information in the TaxAct program. Inherited IRAs If you inherited an individual retirement account (IRA), you may have to include […]
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, […]
You can locate the question regarding whether you can be claimed on someone else’s tax return using the steps below. Online Dashboard From within your TaxAct return, click About. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Edit beside your name. As 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 […]
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 […]
When stocks, stock rights, or bonds (not held by a securities dealer) become completely worthless during the tax year, they are treated as if sold on the last day of that year. The resulting capital loss is short-term or long-term depending on the holding period. See IRS Publication 550 for details. In TaxAct, follow the steps […]
If, while holding a short sale, a dividend was issued which ultimately came from your brokerage account, the amount may be able to be deductible as an investment expense on Federal Schedule A (Form 1040). If the payment you had to make to the lender, in lieu of dividends distributed on stock borrowed for a […]
Section 1202 is an exclusion of gain on Qualified Small Business (QSB) Stock. To enter the information for your QSB gain and exclusion, follow the steps below. The TaxAct program will automatically transfer this amount and enter it as a positive number per the previous instructions on the 28% Rate Gain Worksheet. You are responsible […]
See below for steps on entering the Alaska Permanent Fund Dividends (PFD). Per IRS Publication 550, “Alaska Permanent Fund dividends. Do not report these amounts as dividends. Instead, include these amounts on Schedule 1 (Form 1040), line 8g.” Online Dashboard From within your TaxAct return, click Income. On smaller devices, click in the upper left-hand […]
To enter or review short-term and long-term capital losses carried over from a prior year, follow the steps below. This allows the TaxAct program to transfer the info to Schedule D Capital Gains and Losses. If you import your prior year return in TaxAct, these amounts will be transferred automatically from your prior year TaxAct […]
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 […]
Collectibles include works of art, rugs, antiques, metals (such as gold, silver, and platinum bullion), gems, stamps, coins, alcoholic beverages, and certain other tangible properties. If you have a gain or loss on the sale of a collectible, you must create a Form 1099-B Proceeds From Broker and Barter Exchange Transactions in the TaxAct program […]
To get Line 19 of IRS
You may need to allocate amounts of the Form 1095-A to another individual at zero percent. For more information, see IRS Instructions for Form 8962. To indicate zero allocation in the TaxAct program, follow the instructions in FAQ Form 1095-A – Entering Health Insurance Marketplace Statement in Program. During the interview, when entering the recipient’s […]
Per the Form 8962 Instructions: “If an individual in your tax family was enrolled in a policy with an individual in another tax family and you are not taking the PTC, the taxpayer who is claiming the individual not in your tax family may agree to reconcile all APTC paid for the policy.” For more […]
Per the Form 8962 Instructions: “You need to allocate policy amounts (enrollment premiums, SLCSP premiums, and/or APTC) on a Form 1095-A between your tax family and another tax family if: The policy covered at least one individual in your tax family and at least one individual in another tax family; and Either: a. You received a […]
To enter or review Form 1095-A Health Insurance Marketplace Statement in TaxAct, follow the steps below. Access your HealthCare.gov account to review your uploaded Form 1095-A. 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. […]
The alimony recapture rule helps ensure that alimony payments are made as true ongoing support rather than large upfront property settlements disguised as alimony. If alimony payments decrease substantially during the first three calendar years after they begin, part of the payments may need to be “recaptured.” This means the payer may have to include […]
The IRS has an annual maintenance period (called a “blackout”) during which certain types of returns are not accepted electronically. This is also referred to as the e-filing shutdown or cutover schedule. Individual Returns The individual shutdown for tax year 2025 begins on Saturday, December 26, 2026 at 11:59 a.m. Eastern Time. The IRS […]
TaxAct Federal Desktop programs are available in early and final release versions. The early release version is usually released in late October for Professionals and December for Individual Consumers. The final versions of our Federal 1040 software programs are typically released in early January. The state modules begin releasing in early January and can continue […]
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, […]
The new tax bill was signed into law on July 4, 2025. This is a major tax law change that extends many benefits from the 2017 Tax Cuts and Jobs Act, while adding new deductions and incentives for specific groups of taxpayers (seniors, tipped workers, overtime recipients, etc.). It offers opportunities for both individuals and […]
What changed in 2025? New deduction for interest that you pay on a qualifying vehicle loan. Maximum annual deduction is $10,000. You can claim it even if you take the standard deduction. Verify final assembly in the U.S. Use the NHTSA VIN Decoder to confirm final assembly location. https://www.nhtsa.gov/vin-decoder Have your 17-character VIN ready. You […]
Each time you sign in, you may be prompted to verify your identity via a 6-digit verification code sent by text (standard text rates apply), email (only if you do not receive the code via text), or using an authenticator app. This extra layer of protection ensures only you can access your account. To choose how to […]
Follow these steps if you have forgotten your password: Click Sign In at the top-right of the TaxAct website. On the Sign In screen, enter the username, email address, or the mobile phone number associated with your TaxAct account. Click Sign In. On the Sign in with Password screen, click I forgot my password. Follow […]
There are two methods for printing Form 4868. One method is to return to the extension steps, review your entries, and then print a copy of the form. See below for details. The other method is to use the Custom Print section – see Printing Your Return and Individual Forms for details on this […]
If you have not fully completed the Federal Q&A interview, it can be difficult to locate the Federal Quick Q&A Topics. You need the program to think you have completed the Q&A if you want to access the topics, but we recommend fully completing the Q&A first to enter your information correctly. To skip 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 […]
Generally, if you are under age 59 1/2, you must pay a 10% additional tax on the distribution of any assets (money or other property) from your traditional IRA. Distributions before you are age 59 1/2 are called “Early Distributions.” The 10% additional tax applies to the part of the distribution that you have to […]
IRS Form 5329 is the federal tax form used 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 in TaxAct: TaxAct Online From within the TaxAct return, click Federal. On smaller devices, click the menu […]
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 […]
The IRS may reject your tax return if you did not include information about your Advanced Premium Tax Credit on IRS Form 8962 from the federal healthcare marketplace. This occurs when the IRS database shows that you should have provided this information (whether this is accurate or not). If you did receive Form 1095-A showing […]
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 […]
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. You can enter Qualified Business Income (QBI) for a rental property when entering the details about that rental property. […]
If you own a business, freelance, or earn money through gig work, you are generally considered self-employed. You can enter Qualified Business Income (QBI) related to self-employed or sole proprietor income when entering the details about that Sole Proprietorship. You may receive Form 1099-NEC or Form 1099-K reporting income or transactions related to your self-employment. […]
To add information about your farm, filed on Federal Schedule F, follow these steps: TaxAct Online Dashboard Classic Classic From within your TaxAct return, click Federal. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click the Business Income drop-down, then click Farming income or loss. Click […]
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 […]
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 […]
What changed in 2025? A new tax law allows a deduction for qualified overtime income. You can claim a deduction of up to $12,500 (single) or $25,000 (married filing jointly). Both itemizing and non-itemizing taxpayers are eligible to take this deduction. IMPORTANT: Social Security and Medicare taxes still apply (this only affects income tax). What […]
To report a Roth IRA distribution, begin by entering the data from your Form 1099-R (gross amount, taxable amount, Box 7 code). Then follow the instructions for Form 8606 to compute how much (if any) is taxable or subject to penalty. Finally, if the distribution incurs the 10% early-distribution penalty (or a recapture) and no […]
Form 1099-R reports distributions from 401(k)’s, pensions, annuities, retirement or profit-sharing plans, IRAs, insurance contracts. A copy of that form is also sent to the IRS. See Form 1099-R – Basic Information for more information. NOTE Generally, if you are under age 59 1/2, you must pay a 10% additional tax on the distribution […]
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 […]
To enter a description and an amount for “Other Income” that needs to be reported on Form 1040, follow the steps below. Other Income refers to any income that is not reported elsewhere on another form or schedule. In 2024, the amount flows to Schedule 1, line 8z with “Worksheet attached” on the description […]
To enter a description and an amount for “Other Income” that needs to be reported on Form 1040, follow the steps below. This would be any income that is not reported elsewhere on another form or schedule. The amount flows to Schedule 1, line 8z with “Worksheet attached” on the description line. The worksheet […]
What changes in 2025? A new tax law allows a deduction for qualified tip income. You can deduct up to $25,000 per return. Tips are still subject to Social Security and Medicare tax. What counts as “qualified tips”? For an amount to be considered a tip (and therefore “qualified”), it must meet all four conditions: […]
If you were not an employee of the company or person who paid you, your payment (compensation) is reported on Form 1099-NEC instead of Form W-2. To enter the applicable Schedule C information, and Form 1099-NEC, follow the steps below. Refer to IRS Publication 334 for additional information regarding self-employment tax, what it is, […]
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. […]
To navigate back to the Q&A Interview view, follow the steps below: TaxAct 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 the My Return section, select Federal Search. Below Step-by-Step Guidance, click Get Started. Classic […]
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. After Filing Form 4868, To enter the amount paid with Federal Form 4868 on your return, see Form 4868 – Reporting An Amount Paid with Extension. Form 4868 is only an extension of time to file, not […]
If you believe you may be at risk for tax-related identity theft, fill out IRS Form 14039 and either fax or mail it to the IRS so they can mark your account to identify any questionable activity (the fax number and mailing address are provided below the signature section on the second page of the form). […]
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 […]
If your dependent received an Identity Protection PIN (IP PIN), you will need to enter this PIN on your tax return. To enter your dependent’s IP PIN, follow the steps below. Online Dashboards From within your TaxAct return, click Federal and then Taxes & Miscellaneous. On smaller devices, click the menu at the top […]
Generally, the IRS will process and issue refunds within 21 days. In some situations, your refund may take longer to be processed by the IRS or your financial institution. The IRS Where’s My Refund? page provides an actual personalized refund date as soon as the IRS processes your tax return and approves your refund. The […]
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 […]
Anyone who prepares and files Oregon Personal Income Tax Returns for compensation must be licensed with the Oregon Board of Tax Practitioners; unless they are a Certified Public Accountant (CPA), a Public Accountant licensed by the Oregon Board of Accountancy, or a member of the Oregon State Bar. Additional information is provided on the Oregon Board of Tax Practitioners website. Enter your state […]
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 […]
Reject Codes R0000-504-02, SEIC-F1040-501-02, SEIC-F1040-535-02, SEIC-F1040-536-01 and SEIC-F1040-537-01 If a federal return is rejected by the IRS with rule number SEIC-F1040-501-02, SEIC-F1040-535-02, or R0000-504-02, a child’s name, social security number (SSN), or birth date does not match IRS records. For rejection R0000-504-02, the child was claimed as a dependent; for rejections SEIC-F1040-501-02 and SEIC-F1040-535-02, 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 […]
Preparing your Federal Return is easy using TaxAct. The Interview will take you through your return from start to finish. If you prefer to jump around, you can use the Menus or Site Map to jump to specific topics. When using TaxAct Online, there are two views that you may see. Dashboards and Classic Navigation. […]
TaxAct supports importing Schedules K-1 created using the TaxAct Business Tax Products into your Individual (Form 1040) return. Once you have completed the Partnership (Form 1065) or S-Corporation (Form 1120-S) return, you should have a K1importXX.dat file saved on your computer (XX indicates tax year – for example, the filename for 2024 will be K1import24.dat). […]
TaxAct Online provides an easy-to-use interview format which will take you through your return from start to finish. You can also skip to any part of the interview by using the menus or the topic list. Alternatively, you can search or use one of the Assistants. Menus To navigate to a major section in the […]
Donation Assistant is a useful way to calculate the Fair Market Value (FMV) of donated items, such as items donated to Goodwill, Salvation Army, or any other charitable or non-profit organizations. This calculator provides certified resale values, so you can accurately determine the value of your donated items and maximize your deduction. Follow the steps […]
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 […]
There are many variables to consider when determining if an individual qualifies as a dependent for tax purposes. As each situation can be different, TaxAct does not make the determination of which dependents qualify; this must be determined by the user. TaxAct calculations are based on the user entering eligible dependents into the program. If […]
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 […]
If you are claimed as a dependent on another person’s tax return, you must indicate this when filing your own return. Selecting this checkbox: Limits your standard deduction amount. Prevents you from claiming dependents of your own. May make you ineligible for certain tax credits and deductions (though you may still qualify for others depending […]
If you are claimed as a dependent on another person’s tax return, you must indicate this when filing your own return. For detailed steps on making this selection, see the Dependent of Another Taxpayer Filing Their Own Return FAQ.
To enter or edit a dependent in the TaxAct program, follow the steps below. Online Dashboard From within your TaxAct return, click About. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click Add Dependent. If a dependent was updated from the prior year, you can […]
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 […]
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 […]
To enter or edit a dependent in the TaxAct program, follow the steps below. Online Dashboard From within the TaxAct return, click About. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Click Add Dependent. If a dependent was updated from the prior year, you can […]
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 – Adding, Reviewing, or Deleting FAQ for details). During the interview process, on the screen titled W-2: Enter Your information, below […]
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. TaxAct Online Dashboards From within your TaxAct […]
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 Form W-2 – Adding, Reviewing, or Deleting for […]
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 […]
Nontaxable combat pay is generally reported on Form W-2 Wage and Tax Statement in Box 12 with code “Q.” To fill out Form W-2, Box 12 – Letter code and Amount, you must first add Form W-2. If you need help, go to the Form W-2 – Adding, Reviewing or Deleting FAQ. Then, follow the […]
Reporting your income from Form W-2 is simple in TaxAct. In the TaxAct program, you can import, add, review/edit, and delete multiple copies of Form W-2. To add multiple copies of Form W-2, see Form W-2 – Filing Multiple Copies for instructions. Adding To add a Form W-2 in TaxAct: TaxAct Online If it’s your […]
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 income from Form W-2 is simple in TaxAct. In the TaxAct program, you can import, add, review/edit, and delete multiple copies of Form W-2. To add multiple copies of Form W-2, see Form W-2 – Filing Multiple Copies for instructions. Adding To add a Form W-2 in TaxAct: Desktop From within the TaxAct return, […]
The Import feature is included in all the TaxAct programs at no extra charge. This feature allows you to import key information from last year’s return, saving you valuable time. There is no need to enter information such as your name, Social Security Number (SSN), address, etc. You will be given the option to choose […]
You may need to mail a paper return to the IRS or state agency if: You prefer mail over e-file (personal preference) Your e-file was rejected and must be paper-filed to correct the problem* You’re filing your return after the October deadline (IRS is no longer accepting e-filed returns) Before mailing the return(s), be sure […]
If the IRS rejects an e-file, and the reject states that the Name, Social Security Number (SSN), or Date of Birth of either the primary taxpayer or spouse does not match the information currently available in the IRS database, that does not necessarily mean the information you are entering is incorrect, just that it does […]
To enter or modify the taxpayer’s (or spouse’s) name, Social Security Number (SSN), or date of birth in the TaxAct return, follow the steps below: TaxAct Online Dashboard From within your TaxAct return, click About. On smaller devices, click the menu at the top left corner of your screen, then make your selection. Review the […]
To fix the rejection for prior year AGI/PIN mismatch, follow these steps: From within your TaxAct return, click in the top left corner of your screen, then click Filing. Click E-file, and continue with the interview process until you reach the screen titled We recommend using your 20XX AGI to verify your identity. Click the […]
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 […]
You may be able to exclude some of the gain on the sale of your home used for business purposes if you meet the ownership and use tests, and if the part of your property used for business is within your home (in other words, not a separate part of your property). Per IRS Publication […]
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 complete the […]
Business start-up costs are the expenses you incur before you actually begin business operations. Your business start-up costs will depend on the type of business you are starting. They may include costs for advertising, travel, surveys, and training. These costs are generally capital expenses. Note. Organizational costs usually only pertain to a corporation or partnership. […]
If your return was rejected due to incorrect AGI or PIN information, you’ll see a red alert when attempting to resubmit without correcting the issue. This alert will remain visible until you update at least one of the affected fields. Verify and update the AGI and/or PIN fields in your return. If your rejected return indicated you were a “first-time filer […]
Online Navigation Instructions From within your TaxAct return, click the Print Center dropdown, then click Instructions/Reports. Click the checkbox next to the instructions you want to print, then click the data entry field below Number of Copies and type the amount. Click Print, then click the [Name]_20XX_Tax_Return.pdf PDF link. The PDF will open in a […]
To determine which forms/schedules are “active” in the current return, as opposed to those forms that are not being used in the current return, you need to view the Forms and Schedules list. Active forms/schedules are either automatically created (and required as a part of every return), or you have entered information in the TaxAct […]
How do I get paid? Funds are deposited into the bank account you provided during the merchant application process. How quickly are payouts deposited into my account? Typically, payments are deposited into the bank account (provided during the merchant application process) within 2 business days from the date of sale. Is there a minimum amount […]
To have your preparation fees deducted from your client’s refund, you must apply to work with a TaxAct partner bank who offers this service. To start the application, log into your TaxAct account and click on Bank Enrollment. Once your application is accepted, you can offer your clients the option to pay their fees via their […]
If you encounter an error when trying to check out a client return, it may be due to one of the following issues: The file’s Read-Only attribute is enabled. The file has become corrupt. The TaxAct program cannot locate the file. The file has been deleted. Deselect Read-Only (For additional assistance, visit Microsoft Support) Close TaxAct. Click the Search field on your taskbar, type File […]
The instructions for the four forms listed below may be found on the IRS website: Instructions for Form 1040 and 1040-SR Form 1040 U.S. Individual Income Tax Return Schedule 1 (Form 1040) Additional Income and Adjustments to Income Schedule 2 (Form 1040) Additional Taxes Schedule 3 (Form 1040) Additional Credits and Payments Note that any link in the information above is updated […]
Your account will be temporarily locked or disabled after multiple failed sign-in attempts. To regain access, either: Wait 15 minutes and try again Recover your password (steps below) Ensure that you are using the correct username. Password Troubleshooting If you have issues signing in: Double-check password spelling (use the “eye” icon) Turn off caps lock […]
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 […]
Each time you sign into your account, you are prompted to verify your identity with a 6-digit verification code sent by text (standard text rates apply) or authenticator app. You must have a valid, domestic phone number associated with your account to use TaxAct and complete verification steps. This extra layer of protection ensures that […]
Online Sign In Go to Sign In Enter your username. Select Remember this device if using a private device. Click Sign in. Complete the ReCAPTCHA. Enter your password and click Continue. Enter the verification code to complete sign-in. See Related Links for details. NOTE: You must use the online sign in to manage or update account […]
In accordance with the IRS guidelines set forth by the IRS Safeguards Program and the Security Summit, TaxAct Professional account passwords expire every 90 days. If you recently received an e-mail notifying you that your password will expire within seven days, you may follow the instructions below. To reset your password before it expires: Sign […]
TaxAct supports the use of several different third-party authenticators. For common issues that arise during verification, please see the troubleshooting links for each authenticator below. Duo Mobile https://guide.duo.com/common-issues Authy (mobile devices only) https://help.twilio.com/categories/19752372315419 Google Authenticator https://support.google.com/accounts/answer/185834?hl=en Microsoft Authenticator https://support.microsoft.com/en-us/account-billing/troubleshoot-problems-using-microsoft-authenticator-a3a74493-566b-4c2e-b949-a2789bac0fd3
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 | […]
If you re-file a return after it was initially rejected, the TaxAct program may prompt you to enter a credit/debit card number, even if you already paid when you first filed. You will not be charged again if: The primary identification number remains the same (Social Security Number (SSN) for personal tax returns or Employer […]
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 […]
What is the Drake Pay® Back-Office Portal? The Back-Office Portal is a tool available to all users so they can review transaction data, disputes, and deposits for all locations. Users can also view their fee profile, other business specific information, and export data with which reports can be created. How do I access the Drake […]
When you purchase prepaid or unlimited e-filing, that purchase is assigned to your account. When you sign into TaxAct with the username and password associated with that account, your Practice ID should automatically be added to your Preparer Information. To enter the verification information for your e-filing: From within your TaxAct Professional Edition program, click […]
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 > […]
If you choose to have your tax refund deposited onto a Serve® prepaid debit card, you can enjoy a secure, flexible, and easy way to access your funds. The Serve® card is accepted anywhere American Express® Cards are accepted, and offers a range of benefits. Benefits Free online registration No credit checks No minimum balance […]
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 […]
Audit Defense is a post-filing service that gives you access to credentialed tax experts if you receive an IRS notice, state notice, audit inquiry, or experience tax-related identity theft. Audit Defense covers the following post-filing issues: You can elect to add Audit Defense coverage when you file your return. You will receive a confirmation email […]
As of January 1, 2025, savings bonds can no longer be purchased using a tax refund. To purchase a savings bond, taxpayers can visit https://treasurydirect.gov/.
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 […]
For the security of your personal information, a printed or digital copy of your TaxAct Online return is only available after you have signed into your account. You can then print or save a PDF of the return. TaxAct Support cannot mail, fax, or email a paper or electronic copy. For help with your username […]
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 […]
The information included below is to assist you in researching your specific tax question. On the right side of any screen in the TaxAct program, there is an IRS Instructions or State Instructions link to provide additional information specific to the screen you are viewing. Our FAQs are available on our Most Popular Help Topics […]
Deadlines for federal returns vary by return type. Most states comply with the federal filing deadline, but we recommend that you check with your individual state taxing authority to confirm. See State Return Due Dates for details. Note: If your area has been declared a federal disaster area, check the IRS Tax Relief in Disaster Situations webpage for more […]
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: […]
If you claimed the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC), the IRS shows your refund will be released mid-February. Refunds should be available in your account by the first week of March if you chose direct deposit and there are no other issues with your tax return. The IRS […]
Form 8868 is used to request an automatic 6-month extension of time to file Form 990, 990-EZ, 990-PF, or 990-T. You cannot use Form 8868 to extend the due date of Form 990-N. Note. Filing an extension ONLY extends the time to file your return and does not extend the time to pay any tax […]
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 […]
An amended Form 1041 should be filed only if the IRS or state has already accepted the original 1041 return and you need to make changes due to an error, omission, or legislative update. If you filed the original return through TaxAct, you can create an amended return for free, however, there may be fees […]
If you filed the original return through TaxAct, you can create an amended return for free, however, there may be fees for any additional forms required that were not included in the original return. NOTE: While the IRS technically allows you to electronically file up to three amended returns per tax year, TaxAct consumer and […]
Form 7004 is used to request an automatic extension of time to file certain business income tax, information and other returns, including Forms 1041, 1065, 1120, and 1120-S. Generally, Form 7004 must be filed on or before the regular due date of the applicable tax return and can be filed electronically for most returns. Notes […]
Filing your return is just the beginning! There are a lot of different situations and questions that arise after filing a tax return. Below are some of the most common questions that arise after filing. Refund Status After your return has been accepted, you can check the status of your refund on the IRS Where’s […]
TaxAct does not support e-filing of superseded returns; they must be paper-filed. To file a superseded return, modify the return and mail it to the address in the filing instructions. The IRS will treat it as superseded if it receives it within the original deadline (including extensions). Amended returns can be e-filed through TaxAct, following […]
Generally, for a credit or a refund, Form 1120-X must be filed within 3 years after the date the corporation filed the original return, or within 2 years after the date it paid the tax, whichever is later. A return filed early is considered filed on the due date. It often takes the IRS 3 […]
If the S corporation is amending its federal return, it may also have to amend certain state returns. If the income, deductions, credits, or other information provided to any shareholder on Schedule K-1 is incorrect, file an amended Schedule K-1 (Form 1120S) for that shareholder with the amended Form 1120S. Also give a copy of […]
A feature of the TaxAct Enterprise Edition is the ability to store, share, and collaborate with others on a network. It’s great for offices with multiple preparers who wish to share workloads, data, and responsibilities. The program can be used with your existing Local Area Network (local storage option) or an Internet connection (cloud-based storage) […]
Form 990-EZ Short Form Return of Organization Exempt From Income Tax cannot be used in certain situations. The following are examples when Form 990 Return of Organization Exempt From Income Tax must be utilized: If Form 990, Part IX, Line 2 exceeds $5,000, Form 990 will be generated in the TaxAct program. Per IRS Instructions […]
As a taxpayer, it is your responsibility to ensure that your tax return has been successfully filed and accepted by the IRS or your state agency. Check your e-file status – Visit our Check E-File Taxes Status FAQ for assistance with our E-File and Tax Refund Status webpage. Track your federal refund – Use the IRS Where’s My Refund? webpage to […]
The requirements for filing a state extension vary by state. The process for your specific state will be explained in the filing steps. See Form 4868 – Filing a Federal Individual Tax Return Extension (Consumer) for detailed steps. In some cases, no extension form is needed. The program will indicate what is required for your […]
You can complete Form 4868 within your TaxAct Professional Edition program by following these steps: Open the client’s return. Click on the Filing tab and select File Extension. For the question Would you like to complete a Federal Extension?, click Yes. Follow the walk-through Complete Form 4868 or Estimate My Tax (prior to completing Form 4868). […]
If you live outside the United States of America, you can still order TaxAct software through the website, as long as all of the following are true: You have a valid US address, You have a valid US phone number, You will pay for your order with a US-based credit card. If you are a […]
You can use the TaxAct Consumer Edition products Online (using a web browser) or on your Desktop (download the program). We offer a number of programs and packages to fit everyone’s tax filing needs. When you click the links below, they will each take you to a different webpage, and you can click either Online […]
You may be required to include additional files with your return. If you are, you’ll be prompted to attach those files during the e-filing process. Check the Federal and State sections of the TaxAct program to make sure you’ve added any necessary attachments. You can attach a PDF document to your Federal return for the […]
TaxAct is excited to offer live support calls with tax experts. For details about this program, see the Terms of Service. To schedule a call with one of our tax experts or to find out more about this program, go to our TaxAct Xpert Help webpage. Tax Guidance
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 […]
Important Security Updates for the 2024 Tax Season As part of the IRS Security Summit, all professional tax products across the industry—including TaxAct Professional Edition solutions—must comply with enhanced security requirements to better protect both your data and your clients’ information. To meet these standards, TaxAct Professional has implemented the following multi-layered security measures for […]
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 […]
Refund or Tax Due Amount Changes at the Top of the Screen Any changes made to your return after filing will automatically update the Federal and/or State refund or tax due amounts displayed at the top of the screen. Be sure to print or save a copy of the original return you filed with the […]
Filing Taxes for Children and Dependents A child’s earned income (such as from a W-2) should not be reported on a parent or guardian’s tax return. Does Your Dependent Need to File a Return? Whether a child or dependent is required to file depends on: The amount of earned and/or unearned income Marital status Age (65 or older) Whether they are blind Even if not […]
Understanding the Affordable Care Act (ACA) and Your Federal Tax Return To help you better understand how the Affordable Care Act of 2010 (also known as ACA, the Health Care Law, or Obamacare) may affect your federal tax return, TaxAct has compiled key information regarding related forms and terminology. Not all items listed below will […]
As a Professional Preparer, you can choose different options of paying for e-filing with TaxAct Professional software. If you have not already verified your EFIN information with TaxAct, see EFIN Verification Process. Unlimited e-Filing If you decide to purchase a professional bundle, unlimited e-filing is included. Pre-Paid e-Filing If you are interested in Pre-Paid e-filing, contact […]
If you receive a Form 1099-NEC Nonemployee Compensation with an amount in Box 1, the IRS position is that you have your own business. Your “business” is whatever you do to earn the income that is reported to you on the Form 1099-NEC, Box 1. When you complete the Schedule C (Form 1040) section of the […]
Finding Supported Federal and State Tax Forms by Product You can view which federal tax forms are supported by each TaxAct product by selecting the relevant product below: Free Deluxe Premier Self Employed Estates and Trusts (Form 1041) Partnership/LLC (Business 1065) C Corporation (Business 1120) S Corporation (Business 1120-S) Tax Exempt Organizations (Form 990) Once you select […]
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, […]
Interference from a security software is the most likely cause of peculiar behavior after TaxAct updates or installations. Security software programs may incorrectly interpret modification of the TaxAct program’s main .exe file as malicious behavior, and quarantine program files. If program files are removed or otherwise not accessible, the TaxAct program will not function as […]
Troubleshooting: Professional Reports Not Displaying in TaxAct If Professional Reports is not displaying in your TaxAct program, it may be due to settings related to your Internet Options, Windows network, firewall, or security software. Step 1: Check SSL and TLS Settings Close the TaxAct program or any open TaxAct webpages. On your Windows taskbar, click the search field (typically labeled “Type here to search”) and […]
If you get an error message that the prXXmaster.dat (or other DAT) file is locked or the program is unable to read or write to it, there has been an interruption of, or conflict with, the TaxAct program (substitute XX for the tax year in use). This could be caused by security software, Windows rights […]
During enrollment through the Marketplace, the Marketplace will determine if you are eligible for advance payments of the premium tax credit, also called “advance credit payments.” If you enrolled in Marketplace coverage last year, you will receive Form 1095-A detailing the coverage. You must enter the details of Form 1095-A on your tax return. To […]
If you received IRS Letter 12C, you will need to provide the IRS with the requested documentation so they can finish processing your return. Letter 12C typically requests the following items: a copy of the Form 1095-A that you received showing your Marketplace health insurance coverage, the completed Form 8962 that reconciles the advanced Premium […]
How to Handle Suspicious Emails Claiming to Be from TaxAct® If you receive an email that appears to be from TaxAct but seems suspicious: Do NOT: Click any links within the email Reply to the sender Open any attachments How to Identify a Legitimate Email from TaxAct: We will never ask you to provide, verify, or update […]
If you’re using TaxAct Professional Editions, you can enter data directly into forms using Forms View. Here’s how to navigate and input data effectively: Accessing Forms View From within the client return, click Forms in the options bar to open the Forms Explorer (if not already visible). Use the Search Forms field at the top of Forms Explorer to find a specific […]
The data entry fields are color coded to indicate the type of field it is. There are three types of fields, user entry fields (green), calculated fields (blue) and overridden fields (red). Calculated fields (displayed in blue) are fields in which the program has calculated the data. The data could be text, a number or a […]
Error: “Not a Valid Win32 Application” When Installing TaxAct If you downloaded the TaxAct program but see a “Not a valid Win32 application” error when trying to run the installer ([filename].exe), it’s likely that the file became corrupted during download. Step 1: Delete the Corrupted File Go to your Downloads folder and delete the TaxAct installer file. If you need […]
To order a state module for your TaxAct Desktop program: Log in to your TaxAct Professional program. At the top, click Online, then click Order State Program. This launches the TaxAct website. Add the necessary state to your shopping cart and complete your purchase. While still logged into the website, from the Navigate menu, select Orders […]
IRS General Audit Categories IRS Notices Letter (or Correspondence) Audit Office (or Desk) Audit Field Audit Taxpayer Advocate State Notices. IRS Notices and Audits Information: For information on a specific IRS notice, review the Notice Review – IRS Notice Listing FAQ. To contact TaxAct for assistance with your IRS or state notice, see the Received […]
The default location for TaxAct Professional Edition files is: C:\TaxAct\TaxAct [20XX*] Professional [Preparer’s] Edition\Client Data\[Practice ID] (Where XX is the last two digits of the TaxAct program year.) When you find the file, make sure the TaxAct program is closed, and Double-click the file to open it in the TaxAct program. If you […]
You will see an Alert in the program titled Error or Omission: Missing Form 1095-A if you indicated in the return that you purchased health insurance through a government-sponsored Marketplace, but have not yet entered the information from Form 1095-A Health Insurance Marketplace Statement in the program. This Alert will prevent the electronic filing of […]
If you encounter the following Red Alert during the e-filing process: Error or Omission: Electronic FilingThis return does not qualify for electronic filing. It means that the IRS will reject the return based on their e-filing rules. Why This Happens: Your return must include at least one of the following to be eligible for e-filing: Taxable Income Adjustments to Income Tax […]
At this time, there are no plans to release a TaxAct Desktop product for Mac operating systems. However, Mac users can still complete their tax returns by using TaxAct Online Products, which are fully compatible with most modern web browsers. For details on supported browsers and system compatibility, please visit our System Requirements page.
These instructions only preview Federal Form 1040. This selection does not include any schedules or other forms. From within your TaxAct return, click My Return, then click My Return Details. On smaller devices, click the menu at the top left corner of your screen, then make your selection. If using dashboards, click Resources and then […]
Due to maintenance and compatibility concerns, TaxAct no longer provides software for tax years prior to 2022. Filing a Return for 2021 or Earlier: Visit the IRS website to print the necessary tax forms for your specific tax year. For additional assistance, contact the IRS at 800-829-1040.
To help prevent identity theft, protect our tax professional customers, and comply with IRS regulations, you will be required to sign in each time you open the software, and again after 30 minutes of inactivity or every 24 hours—whichever occurs first. These requirements are part of the IRS Security Summit initiatives and apply to all professional tax software solutions across the industry, including TaxAct […]
Due to the complexity involved, the TaxAct program does not offer an automated way to split a joint tax return into two separate returns for Married Filing Separately status. However, the Joint vs. Separate Analysis report can provide a reasonably accurate estimate of potential tax savings between filing jointly and separately. To view actual results, you will need to manually create a […]
TaxAct has simplified the Professional Editions installation process, starting with 2024. You can now click one link and install all desired products at the same time. For Enterprise Editions, once you install the program, you will be prompted to set up your practice the first time you launch the program. See Professional Editions – Online […]
“Not for Filing” Watermark on TaxAct Return A “Not for Filing” watermark will appear on your return if you choose to pay your TaxAct® program fees using your refund. This is because TaxAct does not allow customers to print their final return before the fees are paid. When Does the Watermark Go Away? If your e-filed return is […]
How to Delete an Individual Form in TaxAct To remove a specific form from your TaxAct return: Open Forms Assistant In TaxAct Online, click the Tools dropdown. Select Forms Assistant. Locate the Form Click the + next to the FEDERAL Forms folder to expand it (if not already expanded). Click the + next to any relevant folders to find the form, worksheet, or document you […]
To prevent fraud, TaxAct requires that your federal return be e-filed through its platform before e-filing your state return. If your federal return was not e-filed—whether due to IRS restrictions or because it wasn’t required—you must paper-file your state return. For New York taxpayers, e-filing is generally required. However, an exception allows paper filing if […]
You need a TaxAct Professional account to sign in to the program, and you need to purchase your TaxAct Professional Edition products before installing. See Professional Editions – Downloading and Installation TaxAct for more information. Installing State Editions To install state editions in TaxAct Professional Edition, follow the steps below: Open your return, then click […]
With the TaxAct® Desktop programs, you can e-file up to five (5) returns. You can create an unlimited number of returns for paper-filing. Federal e-file (for up to five (5) returns) is free. You can purchase the Basic, Deluxe, Premier, or Self Employed package. The Deluxe, Premier, and Self Employed packages include one state module. […]
The TaxAct desktop editions install so that they integrate into the same program file (.exe). This means that if you have installed multiple federal editions (1040, 1065, 1120, etc.), all editions will run from the same program. After installing the federal edition for a return type, to create a new return: From within your TaxAct […]
If you can’t see the Republic Bank Refund Advance option when filing your client’s return, try the following: Scroll down – The Refund Advance feature may be located further down the page. Ensure you’ve scrolled all the way. Check eligibility – Your client’s return may not meet the qualifications for a Refund Advance. Verify eligibility with […]
TaxAct Refer-a-Friend Program What is the Refer-a-Friend Program? The TaxAct Refer-a-Friend Program allows you to earn an Amazon Gift Card for every new-to-TaxAct friend you refer who files a paid federal return. The gift card value depends on the offer at the time of referral. Your friends also save—they receive at least 20% off any paid federal product. How Does the Refer-a-Friend Program Work? […]
The refund amount or amount owed displayed in TaxAct remains unchanged after you file, pay, or receive your refund. Just like a printed tax return, the numbers remain static for record-keeping purposes. The amount shown in TaxAct reflects what was filed with the IRS, but it does not update based on payments or refunds received. TaxAct does not provide a live update of […]
You can create a new personal or client return in TaxAct using the following methods. To create a new return in TaxAct Online, follow the steps below. If you need to delete a return, see Delete a Return for more information. Desktop To add a new client return in TaxAct Professional Edition: Go to File […]
You need a TaxAct account to sign in to the program, and you need to purchase your TaxAct Desktop products before installing. See for more information. Installing State Editions If you have already purchased a state return, Sign in to your TaxAct account online. Click Orders and Downloads. Click Download next to the state/return-type you […]
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.
If you receive a corrected form after you’ve already entered the information, it’s easy to fix before you file. You simply need to update the form entries you previously made to match the corrected information you received. If you’ve already filed your return and need to make corrections, you need to file an amended return […]
Once a return has been submitted electronically, it cannot be stopped. It will be transmitted to the IRS and processed. You will receive an acknowledgement from the IRS indicating the acceptance or rejection of your return, generally within 48 hours after they receive it. If the IRS rejects the return, you can make necessary corrections […]
Ensure Adobe Acrobat Reader is Installed. You will need Adobe Acrobat Reader to view, print, or save the tax return. You can view the saved return at any time by opening it in Adobe Acrobat Reader. To generate and save the return as a Portable Document Format (PDF) file, follow these steps: TaxAct Online From within […]
To view and print the receipt for your payment of your TaxAct return: Sign in to your TaxAct Online account. If the navigation menu, choose Tax Returns, and open your return. On the left, click My Return, then My Return Details. Under Payment Information, click My Return Fees. A detailed break-down of the charges will […]
The IRS e-file processing system generally accepts or rejects tax returns within seconds or minutes. If your return is accepted, and you later discover that you made an error on your e-filed return or you have received additional information (example: Form W-2) that needs to be included in the return, you will need to file […]
Below you will find information regarding each states driver license requirements for filing returns. Alabama – The Alabama Department of Revenue is committed to fighting stolen identity refund fraud. To that end, the Department request that taxpayer’s driver license number or State Issued ID number, as well as the state that issued it, the issue date and expiration […]
All TaxAct products can be purchased on our website. Product offerings include: Individual (Form 1040): To order the TaxAct online program, go to our TaxAct Online Products webpage. To order the TaxAct download/desktop program, go to our TaxAct Download Products webpage. Business (Forms 990, 1041, 1065, 1120, or 1120-S): To order the TaxAct business programs, […]
Overview If you need to obtain a copy of your return, copies of tax returns from some prior years are available through your TaxAct Online Account under My Returns and Details. You can access pdfs and print copies of returns that are saved in TaxAct Online as far back as 2019. See Printing Your Return and […]
If you have not have filed your federal income tax return for this year, or previous years, and you are required to file, you need to file your tax return as soon as possible. Go to the IRS Topic No. 153 What to Do if You Haven’t Filed Your Tax Return webpage for more information. […]
Ensure Adobe Acrobat Reader is Installed. You will need Adobe Acrobat Reader to view, print, or save your tax return. You can view the saved return at any time by opening it in Adobe Acrobat Reader. To generate and save your return as a Portable Document Format (PDF) file, follow these steps: TaxAct Online From within […]
If a page fails to load or you experience difficulties signing in to your account, it can be caused by your web browser cache (temporary browsing data for helping pages load more quickly the next time you access them). Clearing your cache will most likely resolve the issue. Before clearing your cache, close all other […]
If you need to find the location where your return files are saved on your computer, or if you can’t find the return you want in the TaxAct program, you can follow these steps to locate your return files. Search In the taskbar at the bottom of your computer screen, click in the field that […]
To create a new return in TaxAct Online, follow the steps below. If you need to delete a return, see Delete a Return for more information. Sign in to your TaxAct Online account. Navigate to My Returns. Click Start a New 20XX Return. Click Start New Individual Return. NOTE: You can add more than one […]
If your return was rejected with either of the following IRS codes, you did not provide the information necessary to verify your e-filed return: IND-031: The primary taxpayer’s prior-year AGI or Self-Select PIN doesn’t match IRS records. IND-032: The spouse’s prior-year AGI or Self-Select PIN doesn’t match IRS records. For more information on these signature […]
If you are a shareholder within an S-corporation, the S-Corporation must file its own tax return on Form 1120-S U.S. Income Tax Return for an S Corporation, which is due on March 15th for calendar year filers. TaxAct® supports the Form 1120-S return and the individual Form 1040 U.S. Individual Income Tax Return. You can […]
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 […]
See IRS Publication 503 for details about who is considered to be a qualifying person for Form 2441 purposes.
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 […]
Complete the following steps to ensure your return is correct. It’s your responsibility to ensure that the return is accurate and has been successfully filed. Step 1: Review Your Return and Locate Information Before beginning the e-file process, print your return and look over your entries (if you intend to e-file your state return, complete […]
The TaxAct desktop software allows you to create a backup file of the current return you are working on. This file can then later be restored should you need to recover that specific version. This file will be designated with a new extension, .baX (where X is the last digit of the tax year. Example […]
How the IRS confirms your identity when you e-file: When you print and mail your tax return, your signature validates the information and personally identifies you. When you e-file, you don’t have that option. In lieu of a physical signature, the IRS uses a Self-Select PIN method to electronically authorize your e-file. How to create […]
As a professional preparer, you may e-file returns for the current tax year as well as the previous two tax years, when supported by the Modernized e-File (MeF) system. For example, during the 2026 filing season (tax year 2025) you may e-file 2025, 2024, and 2023 returns. Note. The IRS shuts down its Modernized e-File […]
The Federal Trade Commission (FTC) requires that entities which engage in an activities that are financial in nature implement certain security practices to ensure customer data is properly protected. One of these requirements is to maintain a log of authorized users’ activity and to watch for unauthorized access. In order to maintain this log, we […]
To enter your scholarship or fellowship income (if scholarship or fellowship income was reported on Form 1098-T), go to the Form 1098-T – Entering in Program FAQ. From within your student worksheet (if you need help accessing your student worksheet in the TaxAct program, go to our Student Worksheet Entries FAQ), continue with the interview […]
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 […]
Points are certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Points may be called loan origination fees, maximum loan charges, loan discount, or discount points. See IRS Publication 527 for details. You must review IRS Publication 527 to determine if you can deduct points on your Schedule E […]
Starting with 2024, the Minnesota Renter’s Credit is claimed by filing Schedule M1RENT with Form M1 (instead of on Form M1PR). If you are eligible to claim the Minnesota Renter’s Credit, you must attach a copy of the Certificate of Rent Paid (CRP) provided by your landlord. Your landlord is required to provide you with […]
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 […]
Unused capital losses will only flow to a beneficiary’s Schedule K-1 (Form 1041) in the final year. If it is not the final year, the capital losses are carried over on the fiduciary return until they can be applied to future capital gains, or until the final year when they may be distributed. See the IRS […]
Taxable scholarship income impacts your total income amount as it is included on Schedule 1, line 8r and then flows to Form 1040, line 8. See IRS Publication 970 for details. If the student is being claimed as a dependent, and their educational expenses exceed the scholarship, grant, or fellowship amount, the education credit or deduction […]
If you receive a Form 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. with a code “6” in Box 7, it is indicating a tax-free exchange of life insurance, annuity, or endowment contracts under Section 1035. Generally, this form has no impact on your Federal tax return; however, it may […]
Schedule C Loss: At-Risk Rules If you have a loss on Schedule C, the interview screen to indicate that All investment is at risk, or that Some investment is not at risk, is at the end of the Q&A for Schedule C or in the Business Income section of the program. If everything that has […]
To view the filing instructions, which include attachment requirements, go to our Print Filing Instructions Online and Desktop FAQ. See IRS Publication 17 for details. Related Links Where to File Paper Tax Returns With or Without a Payment Note that any link in the information above is updated each year automatically and will take you […]
In the TaxAct® program, the federal information you enter flows to the attached state return(s). Because of this, you can’t have a singular TaxAct return with different filing statuses for federal and state returns. If you want to use different filing statuses for your federal and state returns (example: married filing jointly for a federal […]
In order to determine how and where to report stipend income, you must first determine the nature of the stipend income. The IRS explains that your stipend may be reported on Form W-2 or Form 1099-MISC. You are responsible for determining whether you were paid as an employee or independent contractor and whether or not the […]
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 […]
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. […]
To file a return in TaxAct, you must complete the filing steps from within your return. To file your TaxAct return, go to our File My Return with TaxAct FAQ. After you submit your TaxAct return, you should receive an email within 24-48 hours indicating that your return has been received by TaxAct and submitted […]
If the taxpayer was under age 24 at the end of the year and certain conditions apply, they may only qualify to receive the non-refundable portion of the American Opportunity Credit, and not the refundable portion. In the TaxAct program, if the information for the student (who is also the taxpayer on the return) is […]
If you itemized your deductions in the previous year, all or some of your prior year state income tax refund may be considered taxable income on this year’s Federal tax return (Schedule 1 (Form 1040), Line 1). If you claimed the standard deduction, the state refund is not taxable. For information on entering the state […]
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 that are used by many 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. When this stock vests, […]
TaxAct now includes the ability to convert previous year 1040 ProSeries, TaxSlayer Pro™, and Taxwise® client data. Below are some Frequently Asked Questions: What types of returns are converted to TaxAct? ProSeries 1040 Individual (all files ending with .23i or .23I extension), TaxSlayer 1040 Individual (all files ending with .23.ir_ extension), and TaxWise 1040 Individual […]
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 […]
To transfer your TaxAct Desktop Consumer program from one computer to another computer: On your new computer, go to Downloading and Installing TaxAct to download and install the TaxAct program on your new computer. You cannot copy the program from one computer to another because there are file associations and settings that are created when you download […]
To start a new return for the current year: Sign in to your TaxAct Account online. Click Add New 20YY Return. Click on Start New Individual Return or Select Business Type depending on the return type you wish to start. Related Links Access Current or Prior Year Return Consumer Product Offerings Start a Current Year Return […]
To help prevent fraud, it is not possible to e-file most state returns if you have not e-filed your federal return with TaxAct. California is the only state return that can be e-filed without the federal return. If you did NOT e-file your federal return with us You can still prepare your non-California state return, […]
I downloaded the program file but can’t find it on my computer. How do I find it? Try any of the following: Repeat the download process, Use keyboard shortcut CTRL+J in your web browser, or Find the Downloads menu item or icon on your Web browser. You can also use Windows search to locate the […]
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 […]
If a Form 1099-C Cancellation of Debt for canceled debt is issued to an S Corporation, the income inclusion (or exclusion) is applied at the corporate level. If applicable, the corporation would then file Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) with their tax return to […]
During times of high volume, there may be slow response or timeouts with Electronic Filing Manager or Pro Reports because there are many customers checking statuses at the same time. To reduce the likelihood that you will experience these issues, narrow your search criteria so the program doesn’t need to search through as many files. […]
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 […]
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. […]
Form 2439 Notice to Shareholder of Undistributed Long-Term Capital Gains is a form received after the end of the year like any other form (i.e. W-2, 1099-INT, etc.). If you received a Form 2439 with an amount in Box 2 Tax paid by the RIC or REIT on box 1a gains, you would report the […]
If you receive a Publisher Could Not be Verified warning while installing the TaxAct program on your computer, read the warning. Click Yes or Run or whatever option necessary to verify that the program is coming from a trusted source. When installing TaxAct, you can trust our program to be virus-free. Ensure that you download […]
After you click Download to download the TaxAct program, the [filename].exe should appear at the bottom of your screen. If the file does not appear at the bottom of your screen, try one of these options: Check your browser downloads. From within your browser, use your keyboard to press Ctrl + J, and you can […]
You cannot combine or merge multiple TaxAct accounts into one. If you have multiple accounts, you need to keep track of which returns you have created in each account. If you want individual help figuring out which returns you created in each account, go to our Contact TaxAct Service & Support webpage. If you want […]
Per IRS Instructions for Schedule A Itemized Deductions, page A-7: Refunds and rebates. If you received a refund or rebate in 2022 of real estate taxes you paid in 2022, reduce your deduction by the amount of the refund or rebate. If you received a refund or rebate in of real estate taxes you paid […]
If a child is entitled to Social Security benefits, such as after the death of a parent, the benefit is considered to be the child’s regardless of who actually receives the payment. Per IRS Publication 915 Social Security and Equivalent Railroad Retirement Benefits, page 3: Children’s benefits. The rules in this publication apply to benefits […]
Per IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits, page 6: Canadian or German social security benefits paid to U.S. residents. . Under income tax treaties with Canada and Germany, social security benefits paid by those countries to U.S. residents are treated for U.S. income tax purposes as if they were paid under […]
The buying and selling of property may be considered self-employment/business income or investment income if it does not fit under the category of rental income. Ultimately, the taxpayer must determine the true nature of his or her operations and how it should be classified: Rental income reported on Schedule E (Form 1040) Supplemental Income and […]
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 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 […]
To enter sales tax deductions in the TaxAct program, go to our Sales Tax – Entering in the Program FAQ. 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 one worksheet, […]
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. […]
If you paid mortgage interest to more than one person and the amounts weren’t reported on Form 1098 Mortgage Interest Statement, you will need to enter additional mortgage interest information (if you need help accessing the mortgage interest section of the TaxAct program, go to our Mortgage Interest – Not on Form 1098 FAQ): From […]
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 […]
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 […]
The TaxAct® early access program allows you to get a head start on your taxes. If you used TaxAct last year, you can import your data into this year’s return to save time. Go to our Import Last Year’s Return Using TaxAct Desktop FAQ for more information. You can also enter preliminary tax information to […]
For an overview of features for the Professional Editions for Professional Preparers listed below, please visit our TaxAct Professional Tax Software website. Professional 1040 Professional 1040 State Professional 1065 (Partnerships) Professional 1065 State Professional 1120-S (S-Corp) Professional 1120-S State Professional 1120 (C-Corp) Professional 1120 State Professional 1041 (Estates and Trusts) Professional 1041 State (Limited states […]
Data entry errors are the most common cause of rejections. Carefully review all entries related to your rejection to avoid further problems. For specific information regarding an error code, see Most Common E-File Error and Rejection Codes. After you correct any errors, review the return and resubmit. If you need help, go to our Steps […]
Follow these steps if you have forgotten your password: Click Sign In at the top-right of the TaxAct website. On the Sign In screen, enter the username, email address, or the mobile phone number associated with your TaxAct account. Click Sign In. On the Sign in with Password screen, click I forgot my password. Follow […]
To reflect all of the changes to the IRS’s ever-changing tax code, all TaxAct software packages are updated on a regular basis. We release TaxAct federal programs in Early Release and Final versions. As a TaxAct customer, you can download the latest versions of your TaxAct software from within your account. Use the table below […]
Permissions are a feature of multi-user networking available in TaxAct Enterprise Editions. The first preparer you add to your practice will be the Practice Administrator by default (this cannot be removed). Anyone with the Practice Administrator permission will be able to: Invite other preparers to join the practice Modify other preparer’s permissions, Deactivate (or reactivate) […]
TaxAct Pro users can download and save PDF versions of all of their clients’ tax returns. Prior to Tax Year 2023 To download your clients’ tax return data from your TaxAct Pro account: Sign in to your TaxAct Professional app. In the top menu, click Preparer > Print Returns. In the Client Returns tab of […]
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 include the domestic filing exception notification with each partner’s Schedule K-1 (Form 1065): 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 Pass-Through Items dropdown, then click Foreign Transactions. Continue through the interview process until the interview […]
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
If you received RTAA payments and are required to report them as income, they must be reported as “Other income” on Schedule 1 of Form 1040. 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 […]
Members of the clergy who need to reduce expenses on Schedule C (Form 1040) Profit or Loss From Business and/or Form 2106 Employee Business Expenses (due to a certain percentage of tax-free income received), will need to adjust their allowable expenses in the appropriate section of the Federal Quick Q&A Topics menu after calculating the […]
Per IRS Instructions for Forms 1099-INT and 1099-OID, page 3: Box 8. Tax-Exempt Interest Enter tax-exempt interest that is not OID of $10 or more that is credited or paid to the person’s account if that interest is paid on obligations issued by a state, the District of Columbia, a U.S. possession, an Indian tribal […]
The Joint vs. Separate Analysis will separate the net capital gains or losses by taxpayer and spouse, up to the amounts allowed. You may deduct capital losses up to the amount of your capital gains plus $3,000 ($1,500 if married filing separately). There is no report in the program that shows separate capital gain transactions […]
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 […]
The TaxAct® Professional Edition program can be used to prepare your own return. To remove the preparer information from your Form 1040 U.S. Individual Income Tax Return: From within your TaxAct return, click Forms in the options bar to view the Forms Explorer (if it is not already visible). Click to expand the FEDERAL Forms folder, […]
You can add, edit, and delete client records in the Client Manager, which displays all current client information and the status of each return. You can also import previous year returns from the Client Manager. See Professional Editions – Importing Prior Year TaxAct Returns for more information. Add Client Click the Add a Client button. […]
WebView2 Troubleshooting 1.Log in to machine as AdminUser 2.Navigate to the Download the WebView2 Runtime page on Microsoft’s website and select x64 under Evergreen Standalone Installer 3.Open up a file explorer window (You can click on the yellow folder on your taskbar, or follow the instructions below). 1.Press the Windows Key + R. […]
Form 1098-T, Tuition Statement, is sent to a student from their college and reports the following: The payments received for qualified tuition and related expenses; The amount billed for qualified tuition and related expenses; The amount of scholarships and grants administered and processed for the student by the college; If the student was considered enrolled at […]
While we strongly recommend navigating through the entire Q&A at least once, TaxAct allows you to bookmark the exact page you are on in the Q&A so that you can easily revisit topics or screens of your choosing. To use the bookmark feature: Click the bookmark icon next to the screen title (the icon will change […]
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 […]
The IRS and state tax agencies have implemented policies to protect you from fraud. Many agencies have changed their approval process in order to prevent those trying to steal your refund from succeeding. As a result, some refunds may be issued later than others. Refunds are not controlled by TaxAct, so you can still complete […]
What is Drake Pay®? Apply online and be ready to take payment within 48 hours of application submission if approved. Enable in-person payments as well as mobile and online. Provide your customers with credit, debit, and contactless payment options that typically get you paid in 2 business days. Why should I choose Drake Pay? Drake Pay […]
If you receive an error message when installing WebView2, this may be caused when the update to WebView2 is done by the Managed User and not the Admin User. To correct the error, update as the Admin using the following steps. Log in as Admin User. Navigate to the Download the WebView2 Runtime page on […]
For Windows or JavaScript errors in the program, please follow the instructions below to clear the cache in the TaxAct folder. For program years 2023 and on: Close all versions of TaxAct. You may want to restart your computer or use Task Manager to ensure no versions of TaxAct are running. Open a File Explorer […]
If you use TaxAct® 1065 or 1120-S, you can transfer company accounting records into your corporation or partnership tax return by importing a trial balance report generated from your accounting software. It’s your responsibility (or your preparer’s responsibility) to ensure the accounting records in the CSV file match the appropriate tax line in the TaxAct […]
TaxAct Professional customers can update information within their TaxAct account by signing into their account here: https://www.taxact.com/auth/. If you would like to update Firm, Preparer or Client information, you must sign-in to your TaxAct Professional Software to make these changes. Important: To the extent your request relates to your clients’ tax return information, such information […]
TaxAct customers can update information within their TaxAct account and tax returns by signing into their account here: https://www.taxact.com/auth/ Important: To the extent your request relates to tax return information, such information cannot be modified after e-filing — unless the IRS rejects your e-filed tax return, or you file a later amendment. TaxAct provides various […]
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 […]
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 […]
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 […]
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 […]
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, […]
Taxpayers who receive certain notices requiring them to send information to the IRS may now upload their documents online through IRS.gov, rather than mail them in. Please note that taxpayers may securely respond to these notices regardless of having an IRS Online Account. The following notices are currently available for electronic upload: CP04, relating to […]
There is a size limitation of 3 MB total for attachments in the TaxAct Online program (2 MB for the Desktop program). If the file is over the size limit, there are several options to reduce its size. First, confirm how big file is. On a PC: 1. Open File Explorer. 2. Right-click on 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 […]
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 […]
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 […]
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 […]
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 […]
If Practice information (Practice name, address, etc.) is not saving successfully when entering it in the Preparer Master Information section of the Professional program, you can try and go through the following steps.Click on Preparer > Master Information > Preparers > Click on the pencil icon beside the preparer’s name > In “Preparer Info” click […]
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 […]
When you elect to have your TaxAct software fees deducted from your refund, you agree to a transfer of money through our bank partner, Republic Bank. You are able to view or print the Republic Bank Application that lists all bank transfer fees by following these steps: From within your TaxAct return click Return under Print […]
With TaxAct Professional Edition, you can offer bank services through Republic Bank; however, you must first establish an account with the bank. Deadlines for applying with Republic Bank can be found via TaxAct’s Republic Bank product page. If you miss the bank application deadline, you can still provide tax preparation services with TaxAct, but you’ll […]
You may not be seeing the TPG refund options when filing your client’s return because: You need to scroll down. The Fast Cash Advance option may be lower on the page than your screen allows you to view without scrolling. Please check to make sure that you have scrolled down all the way. Your client’s […]
> 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 […]
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, […]
TaxAct implemented an e-file qualification that prevents you from filing Form 8962 Premium Tax Credit (PTC) if IRS Publication 974, Worksheet X is used on Line 28. This was done because IRS business rules do not allow for this scenario, and if it were e-filed, you would receive e-file rejection error F8962-043-02. Rejection code F8962-043-02 […]
How to successfully file VITA/TCE returns using the TaxAct Professional software: Make sure the preparer completing the return has a valid SIDN (STIN) entered – you can enter the SIDN as the PTIN included in your Preparer Master Information so it flows into the return. On the Basic Information worksheet, select Do not include paid […]
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 […]
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 […]
When there are new posts in Notifications, a pop-up notification will appear on your screen. The alert will not disrupt what you are currently working on. If no action is taken, the alert will disappear after ten seconds, or you can close the alert by clicking X in the top right of the notification. To […]
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 […]
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 […]
Excess contributions from a trust or estate can no longer be included in Line 16 of Schedule A (Form 1040) Itemized Deductions. Per IRS Instructions for Schedule A (Form 1040), page A-12: Other Itemized Deductions List the type and amount of each expense from the following list next to line 16 and enter the total […]
TaxAct does not support Form 8834. However, you can still file with TaxAct by printing and mailing your return to the IRS and including Form 8834 separately. See our How to Mail a Paper Return (Paper File) FAQ for help. Important Information The Qualified Electric Vehicle Credit only applies to vehicles placed in service before […]
You are required to file Schedule B-2 (Form 1065) Election Out of the Centralized Partnership Audit Regime if you answer “Yes” to question 33 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. […]
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 […]
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, […]
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 […]
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 […]
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 […]
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 have a client with a return that was filed, but the Fed EF (short for Federal E-Filing) Status column is not showing a result on the Client Manager screen, you can update the column. To update the Fed EF Status column: From within your TaxAct Professional Edition program, click Clients to view the […]
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 […]
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 […]
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 […]
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 […]
TaxAct Professional Edition allows you to lock returns after e-filing, to prevent changes to the filed returns. To automatically lock returns after e-filing (or to deselect this option): From within your TaxAct Professional Edition program, click Preparer in the upper menu bar, hover your mouse over Master Information, then click General. In the Filing/Printing Options section, click the Checkbox next […]
On 12/22/2017, the Tax Cuts and Jobs Act was signed into law. The provisions in this bill generally affect tax years 2018-2025. A summary of the bill’s tax provisions are provided below. The full bill, titled H.R.1 – An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on […]
To check “No” on Form 990 Return of Organization Exempt From Income Tax, Page 1, Section H(a) Is this a group return for subordinates?: From within your TaxAct return (Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal. Click Basic Information in the Federal Quick Q&A Topics menu to […]
To access Form 990-PF Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation, Part III, Analysis of Changes in Net Assets or Fund Balances: From within your TaxAct return (Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal. Click Schedules in the Federal Quick Q&A Topics […]
TaxAct partners with Republic Bank & Trust Company (member FDIC) to allow TaxAct program fees to be deducted from your tax refund. When you choose to have your TaxAct fees paid from your tax refund in the filing steps, you must accept the Refund Transfer Application and Agreement. Section 5 of that agreement authorizes Republic […]
If the return was rejected for the reason “If Item H checkbox is not checked and Line 1 has a value equal to or greater than 5,000, then Schedule B (Form 990, 990-EZ, or 990-PF) must be attached to the Return (Rule Number: F990EZ-034-01),” you will need to check the box for Item H. To […]
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 […]
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 […]
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, […]
For more information on Grantor Type Trusts, refer to the IRS Instructions for Form 1041 and Schedules A, B, G, J, and K-1, U.S. Income Tax Return for Estates and Trusts. Grantor Type Trusts If all or any portion of a trust is a “grantor type” trust, then that trust or portion of a trust […]
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 […]
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 […]
To populate the question on IRS Form 990-EZ Short Form Return of Organization Exempt From Income Tax Part V, Line 42c: From within your TaxAct return (Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal. Click Other Info in the Federal Quick Q&A Topics menu to expand, then click […]
To populate Form 990-EZ Short Form Return of Organization Exempt From Income Tax, Section V, Line 33: From within your TaxAct return (Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal. Click Other Information in the Federal Quick Q&A Topics menu to expand, then click Governance management and disclosure. […]
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 […]
To enter prior year revenue in the Form 990 Return of Organization Exempt From Income Tax return: From within your TaxAct return (Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal. Click Revenue in the Federal Quick Q&A Topics menu to expand, then click Other Revenue. Continue with the […]
When you use the TaxAct Enterprise Edition with a shared network, the master information, preparer information, and return files are kept in the same shared folder. The TaxAct program connects to the shared folder when you set the Preparer Master Information Directory locations to the shared network folder. If the internet connection to the shared […]
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 […]
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.
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 […]
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 […]
Per IRS Form 8453-FE U.S. Estate or Trust Declaration for an IRS e-file Return page 2: The ERO is one who deals directly with the fiduciary and either prepares tax returns or collects prepared tax returns, including Forms 8453-FE, for fiduciaries who wish to have the return of the estate or trust electronically filed. The […]
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, […]
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 […]
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 […]
To enter default credit card or bank product information: From within your TaxAct Professional Edition program, click Preparer in the upper menu bar, hover your mouse over Master Information, then click Preparers. Click the Pencil Icon next to the preparer name, then click Electronic Filing Info. Click Enter Credit Card, and enter your information. Click Continue, and click Save and […]
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 […]
To request an email notification for when a form becomes available, follow the steps below. Online From within your paid TaxAct return, click the Print Center drop-down, then click Return, and then click Print. The Print Center window will display a list of forms that are not available at this time. Click Sign up to […]
Keyboard shortcuts available in the TaxAct Professional Edition program: Action Command Add Client Return Ctrl + N Add Line Item Details Ctrl + D Back Ctrl + Left Arrow Basic Info Ctrl + T Client Manager Ctrl + B Cut Ctrl + X Document Manager Ctrl + Alt + D Review Alerts Ctrl + A […]
To search in Forms Explorer: From within your TaxAct Professional Edition program, Double-click to open a client return (if you are not already in one). In the Forms Explorer window, click the Search Forms field. Type a form number or related word (example: “4868” or “extension”), and Forms Explorer will show the related forms. Click […]
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 […]
The Practitioner PIN method allows taxpayers to authorize the Electronic Return Originator (ERO) to enter or generate the taxpayer’s PIN. To set the program to automatically use the Practitioner PIN: From within your TaxAct Professional Edition program, click Preparer in the upper menu bar, hover your mouse over Master Information, then click Preparers. Click the […]
To grant network access to other preparers in your practice, the practice owner must “Invite” them to join your practice via email (instructions below). The email will include a unique link the preparer must click to create their own TaxAct Account so that the account will use your Practice ID. NOTE: If you are the […]
The Import Wizard allows you to import prior year master information that you saved locally or online. The first screen you will see upon logging into your TaxAct Professional software will give you the option to import prior year Master Information, if available. To import prior year’s information: From within your TaxAct Professional Edition program, […]
To set up or edit your practice, preparer, or master information: Click Preparer, then click Master Information from the drop-down. Enter your practice information, then click Continue to Preparer Information. Edit, add, or remove preparers as needed, then click Continue to Master Info. Click Set Up Master Information Now to select preferences for returns, invoicing, […]
If you are seeing a red alert about your adjustment for Marketplace Health Insurance, it may be because a positive number was made for the adjustment to the Marketplace premiums during the Premium Tax Credit Q&A. This adjustment entry may need to be a negative number, which you can correct within the Alerts section. To […]
There are a couple reasons why the information you entered into your tax return is no longer visible. Information was entered, then the return was imported from the prior year. This overrides any information for the current year. This means current year information would need to be entered again. More than one return was created. […]
Our servers stamp your electronically filed (e-filed) return with your local time. Our records (and emails you receive from us) are stamped with our local time (Central Standard Time). You can adjust the time provided for your time zone.
Each form you add has the potential to make a major impact on your overall return. In order to help maintain the accuracy of a return, there is not a way to downgrade the product used. If you believe you chose the more complex form in error, you may choose to start over by adding […]
If you receive a red alert for an invalid firm EIN during the Massachusetts e-file steps, you must enter a valid SSN in Preparer Information. To enter a valid SSN in Master Information for a preparer: From within your TaxAct Professional Edition program, click Preparer in the upper menu bar, hover your mouse over Master […]
The Internal Revenue Service has issued several consumer warnings regarding the fraudulent use of the IRS name or logo to illegally gain access to financial information for the purpose of identity theft. Because these emails are sent out as “bait,” this is called “phishing.” In some cases, these fraudulent emails may also contain links to […]
People who perform services for companies such as Uber, Task Rabbit, Airbnb, DogVacay, and similar companies are generally considered independent contractors. If you are considered an independent contractor, you will report your income and expenses on Schedule C (Form 1040) Profit or Loss From Business. Per the IRS Gig Economy Tax Center webpage: What is […]
To transfer your TaxAct program from one computer to another computer: Sign into your TaxAct account online and download and install the TaxAct program on the new computer. Copy the Client Data folder from the old computer using a flash drive, external drive, DVD/CD, or network connection. Paste the Client Data folder in the same […]
While there does not appear to be any reference on Form 1040 U.S. Individual Income Tax Return nor in the IRS instructions requiring that a return contain taxable income, adjustments to income, tax liability, credits, other taxes, or tax payments, the IRS does have a rejection code that will reject any return e-filed that does […]
TaxAct currently does not support the ability to enter a Formation Date prior to 1900. If you fall under this situation, you will need to print Form 990 Return of Organization Exempt From Income Tax, manually enter the date prior to 1900, and paper file the return. If you want to give us feedback about […]
If you receive a message when printing that states, “You are trying to print state items, but no states have been selected for printing,” you can fix it by following the instructions below: From within your TaxAct Professional Edition program, click Print in the options bar. Scroll to the bottom of the window and click […]
If you are self-employed, you need to indicate that in the returns you file professionally. You can’t go to the Paid Preparer’s Use Only section of the forms to indicate your self-employment in the TaxAct program. You need to indicate your self-employment in Master Information, and then it will show up on the forms automatically. To […]
Based on the Modified Adjusted Gross Income (MAGI) on a return, the student loan interest deduction allowed on the return may be phased out or eliminated. The TaxAct program automatically calculates the eligible amount of student loan interest deduction for the return, based on the student loan interest expense entered in the program (in conjunction […]
Wages and salaries paid should be entered on Line 8 within Form 1120-S U.S. Income Tax Return for an S Corporation. Payroll and state taxes paid should be entered on Line 12. To enter this information in your tax return: From within your TaxAct return (Online or Desktop), click Federal, then click Deductions (on smaller […]
On Form 1120-S U.S. Income Tax Return for an S Corporation, Line 1 of the Schedule M-1 pulls from Line 11 of the Schedule M-3. To populate this form: From within your TaxAct return (Online or Desktop), click Basic Info, then click Corporation Info (on smaller devices, click in the top left corner of your […]
If you want to associate rental activity with guaranteed payments, the rental real estate income must be reported on Form 8825 Rental Real Estate Income and Expenses of a Partnership or an S Corporation. Rental real estate income can be reported on Form 1065 U.S. Return of Partnership Income, page 1, Line 4, or Form 8825, Line 15, depending […]
Capital gains and losses (investment income) can be allocated to the Beneficiaries. To indicate this in the program: 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, click Gain or […]
If Schedule K-1 (Form 1041) Beneficiary’s Share of Income, Deductions, Credits, etc. is blank on Form 1041 U.S. Income Tax Return for Estates and Trusts, you may need to complete the distributions section of the Q&A. For Schedule B within Form 1041, Lines 9 through 11, TaxAct calculates these items by totaling the distribution information […]
To force Schedule I (Form 1041) Alternative Minimum Tax—Estates and Trusts to print with Form 1041 U.S. Income Tax Return for Estates and Trusts: From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal. Click Taxes in the Federal Quick Q&A Topics menu […]
To enter a Cancellation of Debt for an Estate or Trust return, enter it as other income on Form 1041 U.S. Income Tax Return for Estates and Trusts, Line 8. To enter this in TaxAct Form 1041: From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand […]
To review Schedule O Supplemental Information to Form 990 or 990-EZ: From within your TaxAct return (Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal. Click Schedules in the Federal Quick Q&A Topics menu to expand, then click Schedule O – Supplemental Information to Form 990 or 990-EZ. Continue […]
At this time, the Organization’s Name entry is limited to 40 characters. Please feel free to submit any ideas that you have to improve our software. The best channel for this is to visit our Support page using the links below. As always, your feedback is appreciated and will be reviewed by the development team […]
TaxAct supports the filing of Form 4562 Depreciation and Amortization with the filing of Form 990-T Exempt Organization Business Income Tax Return (and proxy tax under section 6033(e)). TaxAct does not support the filing of Form 4562 if you are filing Form 990 Return of Organization Exempt From Income Tax or Form 990-EZ Short Form […]
If the Schedule B does not apply to your return and you do not need to file it, you must check the box at the top of Schedule B to indicate so. Directly under the Name of the Organization there is a check box for “Check if the organization is not required to attach Schedule […]
Schedule A (Form 990 or 990-EZ) Public Charity Status and Public Support has multiple pages/forms in the TaxAct program. To review this schedule: From within your TaxAct return (Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal. Click Schedules in the Federal Quick Q&A Topics menu to expand, then […]
A red alert appears when one of the Partners is a grantor trust and has a Partner type of DISREGARDED ENTITY. The DISREGARDED ENTITY has a Social Security Number(SSN), but not an Employer Identification Number (EIN). For Partner types that are Disregarded Entities, the program requires an EIN. Error or Omission: Inconsistent ID Number(s)The identification […]
To access your E-File Billing Summary in the TaxAct Professional Edition program: From within your TaxAct Professional Edition program, click Preparer in the upper menu bar, then click Professional Reports. Click E-File Billing Summary, and your total paid fees will be displayed as well as a detailed list of e-filing fees by client. To access […]
If you are receiving an error message when opening a return that says, “Unable to open [file path, file name] – Please verify the file still exists on your computer” the error is likely caused by one of two things: The file’s Read Only attribute is selected. The file has become corrupt. To deselect the […]
Each preparer entered in your program must have a separate individual PTIN. The default preparer’s entry should be the practice owner. The practice owner must invite other preparers. If the preparer you are trying to invite is set as the Practice Owner, then they can’t be invited. You need to be set as the Practice […]
To edit Return Information for a client: From within your TaxAct Professional Edition program, on the Client Manager screen, Right-click the return you want to edit, then click Edit Client Information. In the window that appears, scroll down to the Return Information section, and you can edit the Preparer, Return Status, Payment Status, Amount Paid, […]
Generally, net investment income includes gross income from interest, dividends, annuities, and royalties. The estate’s or trust’s portion of net investment income tax is calculated on Form 8960 Net Investment Income Tax—Individuals, Estates, and Trusts and is reported on Form 1041 U.S. Income Tax Return for Estates and Trusts, Schedule G, Line 4. Schedule K-1 […]
Depreciation, depletion, and amortization are directly apportioned deductions. The beneficiaries’ portion of depreciation, depletion, and amortization is reported directly to the Schedule K-1 (Form 1041) Beneficiary’s Share of Income, Deductions, Credits, etc. (Box 9, codes “A” through “C”) and the portion estate or trust is reported on the appropriate lines of Schedules C, E, or […]
For Form 1041 U.S. Income Tax Return for Estates and Trusts, Lines 12, 14, and 15a you will need to indicate if the deductions are considered administration costs. Administration costs are the expenses incurred during the process of running the estate/trust that wouldn’t have been incurred if the property were not held by the estate/trust. […]
For Form 1041 U.S. Income Tax Return for Estates and Trusts, Schedule B, Lines 9 through 11, TaxAct calculates these items by totaling the distribution information entered for each beneficiary on the Schedule K-1’s (Form 1041) Beneficiary’s Share of Income, Deductions, Credits, etc.. You must enter the amount of total distributions and income required to […]
If the decedent’s estate has been open for more than two years, you must indicate this on Form 1041 U.S. Income Tax Return for Estates and Trusts, Line 8 and attach an explanation for the delay in closing the estate. To check Other Information on Form 1041, Line 8: From within your TaxAct return, click […]
The TaxAct Professional Editions install so they integrate into the same program file (.exe). This means that if you have installed multiple federal editions (1040, 1065, 1120, etc.), all editions will run from the same program. TaxAct integrates editions so you can manage all return types from the Client Manager. After installing the federal edition […]
While there is no official IRS guidance in the forms (or instructions and publications) that addresses IRA contributions made on behalf of a decedent after their death, there was a Private Letter Ruling (8439066) that ruled contributions made after the date of death were classified as excess contributions. Due to this, the TaxAct program is […]
To enter the amount of backup withholding to be distributed to the beneficiaries: From within your TaxAct 1041 return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal. Click Basic Information in the Federal Quick Q&A Topics menu to expand, then click Withholding Allocated to Beneficiaries. Continue […]
We have been unable to determine why returns containing a deceased taxpayer or spouse are being rejected by the IRS (with rejection code IND-031-03 when the taxpayer listed on the return is deceased and IND-032-03 when the spouse listed on the return is deceased). The IRS maintains that they are rejecting them correctly, however even […]
You do not need a driver’s license number to file a federal return. Some states may request your driver’s license number for state tax returns because they have the ability to match state records and help confirm your identity. This is one more layer of protection against identity thieves. TaxAct will prompt you for your […]
TaxAct assigns each practice a unique alphanumeric identification code called a “Practice ID” when the software is purchased. If you have multiple preparers in your practice, each preparer will have the same Practice ID. This ID links your software with your TaxAct account and allows all preparers in your practice to share resources. The Practice […]
To correct the RBIN in the Republic Bank system and resubmit the bank applications: Log in to the Republic Bank website. Correct your RBIN. Go to the Rejected Applications tab to update the rejected bank applications with the new RBIN. Note. All rejected bank applications must be corrected on the Republic Bank website. Before submitting […]
If you see only one preparer or one preparer’s e-filed returns listed in Pro Reports, this may be due to one of the following: You are not logged into the program or website as the practice owner. Only the preparer assigned as the practice owner will have the ability to view information for all e-filed […]
Per IRS Publication 5187 Affordable Care Act: What You and Your Family Need to Know, page 3: What’s New? Under the Tax Cuts and Jobs Act, passed December 22, 2017, the amount of the individual shared responsibility payment is reduced to zero for months beginning after December 31, 2018. Beginning in tax year 2019 and […]
Form 1095-B, Health Coverage provides coverage information you, your spouse (if you file a joint return), and individuals you claim as dependents had qualifying health coverage (referred to as “minimum essential coverage”) for some or all months during the year. Note. Providers of minimum essential coverage are required to furnish only one Form 1095-B for […]
For the most current status of your Federal tax refund, download the IRS2Go Mobile App via Google Play, AppStore, or Amazon. You may also go to the Internal Revenue Service website or call them at 800-829-1954 (long hold times are possible). The Internal Revenue Service website is updated once every 24 hours with information on […]
Per IRS Instructions for Forms 1099-QA and 5498-QA, page 1: Qualified ABLE program A qualified ABLE program is a program established and maintained by a state, or agency, or instrumentality of a state: Under which an ABLE account may be established for a blind or disabled individual whose blindness or disability occurred before age 26 (an “eligible […]
The Withholding Summary report lists all sources for Federal, State, and Local Withholding by form (W-2, 1099-MISC etc.). At the bottom of the report, there is an All Other Withholdings field that applies to only federal withholding. Sources for withholding that are reported in the All Other Withholding field are: Form 8959 Line 24, Total Additional […]
TaxAct Professional Editions require a unique Preparer Tax Identification Number (PTIN) for each preparer to be entered and verified in Master Information. This is due to strict IRS requirements to prevent tax fraud, as stated on the IRS Frequently Asked Questions: Do I Need a PTIN? webpage, under General Guidance #4: “Can multiple individuals or […]
To enter or review information from Form 1099-DIV, go to our Form 1099-DIV – Entering Dividend Income in Program FAQ. The following will assist with the entry of Form 1099-DIV Dividends and Distributions when the income belongs to either another person or multiple taxpayers.
If Question 10 within Schedule B of Form 1120-S U.S. Income Tax Return for an S Corporation is marked “No” when it should be marked “Yes,” you can change it. To change the entry: From within your TaxAct return (Online or Desktop), click Basic Info, then click Corporation Info (on smaller devices, click in the […]
Switching to TaxAct Professional Editions is EASY! With our Data Conversion feature, you can directly convert prior year individual (1040) returns prepared by the following: Intuit ProSeries (Professional & Basic) TaxSlayer Pro TaxWise You can also create PDFs of prior year individual (1040) returns by importing data from returns prepared by the following: […]
The Taxpayer Advocate Service (TAS) has developed several tools for individuals and employers to assist in estimating ACA related credits and payments. Since these tools only provide an estimate, you should not rely upon them as an accurate calculation of the information you will report on your tax return. You should use these estimators only […]
Below is information from the IRS regarding the filing requirements for Form 1041 U.S. Income Tax Return for Estates and Trusts along with an explanation of the purpose of the form and when to file the form. Per IRS Instructions for Form 1041 and Schedules A, B, G, J, and K-1, on page 5: Who Must File Decedent’s Estate […]
If you have problems with TaxAct on Windows 10 or 11, you may need to check your security software or any Windows 10 or 11 security (firewall, user account control, Microsoft security, Windows Defender) to make sure it is not interfering with installation or program operation. You can change settings or temporarily disable the security […]
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 […]
If you receive the following error message: “Republic has informed us that based on your EFIN you are not enrolled to do bank products.” Please make sure you have set up an account with the bank. You must contact Republic Bank to do so. You can locate further information regarding the bank products by visiting […]
If you receive this notification while using your TaxAct Enterprise Edition program: “Warning: Master Information is currently opened by: [computer\username]. It is not recommended that multiple users access Master Information at the same time. Do you wish to proceed?” You have not received an error notification. The program is warning you that more than one […]
The “Setup resource decompression failure” error or similar means that the installation process was unsuccessful. It can be caused by the following: Insufficient drive space: Please check the available space on your destination drive. Insufficient administrative privileges: Please run as administrator or check your administrative privileges. Security software: Please check your security software to allow […]
When your return/form appears to not be printing full size, this may be due to Windows display settings or Adobe Reader settings. First try this: Close Adobe Reader and the TaxAct program. Right-click the TaxAct program icon (desktop shortcut). Click Properties, then click Compatibility. In the Settings area, check Disable display scaling on high DPI […]
You only need to complete Form 8958 Allocation of Tax Amounts Between Certain Individuals in Community Property States if you were domiciled in a community property state. Community property laws only apply to those who are actually domiciled in the state. Per IRS Publication 555 Community Property, page 2: Domicile The law of the state, […]
Based on your entries in a return, you may be prompted to enter an amount for a self-employed health insurance deduction adjustment. This entry is necessary due to the calculations detailed on pages 56-72 of IRS Publication 974 Premium Tax Credit (PTC). The actual calculation for the self-employed health insurance deduction adjustment is automatically done […]
Pennsylvania Schedule B provides a specific line for state tax-exempt dividends, but those dividends must qualify based upon the PA instructions. When you enter an ordinary dividend amount in Box 1 or exempt-interest dividend amount in Box 10 of Form 1099-DIV Dividends and Distributions and indicate it is tax-exempt, the TaxAct program cannot determine if […]
Generally, the amount reported on Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc., Box 14, Code C Gross non-farm income is not used on the individual income tax return. This amount would only be used if you are using the non-farm option method for calculating your self-employment tax on Schedule SE (Form […]
According to the IRS Understanding Your 5071C Letter webpage, this letter may be sent when the IRS needs more information to verify your identity in order to process your tax return accurately. Receiving this letter DOES NOT necessarily mean your identity has been stolen, but only that the IRS needs to verify your identity prior […]
TaxAct supports the entry of up to four Forms 1095-A Health Insurance Marketplace Statement. Form 1095-A is not e-filed with the return; however, the information is transferred to Form 8962 Premium Tax Credit (PTC) for purposes of the Premium Tax Credit. If you have more than four Forms 1095-A, the information can be combined. For […]
Health Reimbursement Arrangements (HRAs), are employer-sponsored plans that reimburse you for health care costs. Your employer is the only one who can contribute to your HRA. There is nothing to report on your tax return for an HRA. Per IRS Publication 969 Health Savings Accounts and Other Tax-Favored Health Plans, page 18: Health Reimbursement Arrangements […]
If you imported your prior year TaxAct return and there are description fields which repopulate when using the Delete or Backspace keys, you can remove this imported field by highlighting the text and pressing the Spacebar on your keyboard. This can be used on any form.
If you are seeing the Red Alert in the electronic filing steps, Error or Omission: Form W-2G – Winner State Abbreviation, this is indicating you have not entered a state of residency for the taxpayer or spouse on Form W-2G Certain Gambling Winnings, an entry made in the Basic Information section of the Q&A (in […]
Per the New York Instructions for Form IT-201: Paid preparer’s responsibilities – Under the law, all paid preparers must sign and complete the paid preparer section of the return. Paid preparers may be subject to civil and/or criminal sanctions if they fail to complete this section in full. When completing this section, enter your New […]
The policy number reported to you by the Marketplace may be longer than the 15 characters allowed in the TaxAct® program entry field. However, only the last 15 characters are needed when filing your return. Per IRS Instructions for Form 1095-A Health Insurance Marketplace Statement: Enter the number the Marketplace assigned to the policy. If […]
TaxAct does not support the preparation and filing of various City of Philadelphia returns (separate from individual Pennsylvania State income tax returns), with the exception of the Business Income & Receipts Tax (BIRT), the Net Profits Tax, and certain other local taxes. See the City of Philadelphia Payments, assistance & taxes webpage regarding the filing […]
Taxpayers should enter all Forms 1095-A Health Insurance Marketplace Statement for their tax family; however, as the ownership of each individual Form 1095-A does not affect the calculations in the return, the TaxAct® program does not request ownership information on the Q&A interview screens. The one exception is if you are using the alternative calculation. […]
While there does not appear to be any reference on Form 1040 U.S. Individual Income Tax Return nor in the IRS instructions requiring a Social Security Number (SSN) be entered for the qualifying child when a return’s filing status is Head of Household (HoH), the IRS does have a rejection code that will reject any […]
Effective for taxable years beginning on or after January 1, 2014, taxpayers can elect annually a de minimis safe harbor to not capitalize any amount paid in the taxable year for the acquisition or production of a unit of tangible property nor treat as a material or supply any amount paid in the taxable year […]
Taxpayers with Canadian registered retirement savings plans (RRSPs) and registered retirement income funds (RRIFs) automatically qualify for tax deferral treatment. Prior to 2014, you had to make this election by filing Form 8891 and reporting details such as contributions, income earned, and distributions. Form 8891 has been eliminated and you are no longer required to […]
When you print organizers for your clients, prior year amounts will only show if the prior year return imported correctly, both returns have the same forms, and the forms have amounts in the same fields. For help importing, go to our Professional Editions – Importing Prior Year TaxAct Returns FAQ If the Organizer has fields […]
TaxAct® supports the ability to import Schedules K-1 (Form 1041) Beneficiary’s Share of Income, Deductions, Credits, etc. created using the TaxAct Estates & Trusts Tax Products into your Individual (1040) return. Once you have completed the Estates and Trusts (Form 1041 U.S. Income Tax Return for Estates and Trusts) return, you should have a K1import20.dat […]
In the year an individual passes away, the income they would have received that was not included in their final return is “Income in Respect of a Decedent.” Per IRS Publication 559, Survivors, Executors, and Administrators, page 13: Income in Respect of a Decedent All income the decedent would have received had death not occurred […]
Per 26 U.S. Code § 643 – Definitions applicable to subparts A, B, C, and D: (b) Income For purposes of this subpart and subparts B, C, and D, the term “income”, when not preceded by the words “taxable”, “distributable net”, “undistributed net”, or “gross”, means the amount of income of the estate or trust for […]
An Estate tax year begins the day after the death of the individual, and cannot exceed 12 months. Per IRS Publication 559, Survivors, Executors, and Administrators, page 22: Income Tax Return of an Estate – Form 1041 An estate is a taxable entity separate from the decedent and comes into being with the death of […]
If you see duplicate income listed in Part I of Form 1116 Foreign Tax Credit, it may mean a country has not been selected on one or more of the supporting documents. Use the steps below to review your Forms 1099-INT Interest Income, Form(s) 1099-DIV Dividends and Distributions, and/or manual input worksheets. Form 1099-INT To […]
Per the Massachusetts Form 1 Instructions on page 9: Line 4. Taxable Pensions and Annuities Income from most private pensions or annuity plans is taxable in Massachusetts. Certain government pensions, however, are exempt under Massachusetts law. In general, exempt pensions include contributory pensions from the U.S. Government or the Commonwealth of Massachusetts and its political […]
Partnerships (Form 1065 U.S. Return of Partnership Income) are able to e-file their business tax return with nonresident partners who do not have an Individual Taxpayer Identification Number (ITIN) or Social Security Number (SSN), provided they have made an application to obtain one of these. Per the IRS, the entry FOREIGNUS is no longer valid […]
Tax-exempt income received by an estate or trust requires an allocation of expenses between taxable income and tax-exempt income. The allocation must be included with the estate or trust tax return. Per IRS Instructions for Form 1041 and Schedules A, B, G, J, and K-1 U.S. Income Tax Return for Estates and Trusts, page 36: […]
The Schedule K-1 (Form 1041) Total Allocations Worksheet is a summary schedule of all the beneficiaries’ share of income, credits, deductions, etc. The estate or trust issues a Schedule K-1 to each beneficiary to report their share of the estate or trust’s Schedule K-1 Total Allocation income and deductions. TaxAct uses this worksheet to compute each line […]
The TaxAct program supports IRS Form 1041 U.S. Income Tax Return for Estates and Trusts. Certain types of trusts require filing a special tax form which are filed separately from the Form 1041 return. The following forms are not supported by TaxAct: Form 1041-N U.S. Income Tax Return for Electing Alaska Native Settlement Trusts (Instructions […]
The TaxAct® program does not support Form 8854 Initial and Annual Expatriation Statement. If you have renounced your U.S. citizenship or are a former U.S. long-term resident who has ended residency, you may be subject to the expatriation tax. Long-term residents are those that were permanent residents for at least eight of the last 15 […]
If dividend income on Federal Schedule B (Form 1040) Interest and Ordinary Dividends (or Form 1040 U.S. Individual Income Tax Return ) is larger than you expect (and Federal Form 8621 Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund is a part of your return and includes dividend […]
In the TaxAct® program, there is not an entry point for Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc., Box 17, Codes D & E. Instead, you will use the information from these boxes to calculate the amount to enter on Form 6251 Alternative Minimum Tax—Individuals, line 2t. Per IRS Partner’s Instructions for […]
The IRS Annual Filing Season Program (AFSP) is a voluntary program designed to encourage preparers, who are not otherwise required to complete continuing education, to continually increase federal tax knowledge. Preparers who participate will receive a Record of Completion issued by the IRS. To receive a Record of Completion for calendar year 2023, all continuing […]
You are unable to file a return (when utilizing the bona fide residence test on Federal Form 2555 Foreign Earned Income) until a full year has passed that you met the qualifications. Per IRS Publication 54 Tax Guide for U.S. Citizens and Resident Aliens Abroad, page 4: Extension of time to meet residency tests. You […]
Cash For Keys Program: Financial institutions initiating a foreclosure process on a home indicates that it is willing to pay the homeowner a set amount of cash in exchange for the keys to the home. The cash may be based on a percentage of the appraised value of the home or it may simply be […]
If a return was e-filed using your personal information and you did not file that return, we recommend you immediately contact the IRS at 1-800-829-1040 (or through the IRS Identity Protection Specialized Unit at 1-800-908-4490). You will need to paper-file your return with an explanation of the situation and documentation verifying the Social Security Number […]
The TaxAct® programs select country codes according to the IRS Foreign Country Code Listing for Modernized e-File (MeF) webpage which is what software developers must follow. As the IRS references that list for returns they process, only if they correct their listing for software developers can we change a code in our programs. A current […]
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 […]
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 […]
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 […]
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: […]
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 […]
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 […]
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 […]
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 […]
The standard mileage deduction is not allowed for business-owned vehicles. Businesses are required to use depreciation and actual expenses when reporting vehicle expense on the business return. Businesses are allowed to use the standard mileage rate when reimbursing employees for business use of their personal vehicle. Partnerships Instead of reporting vehicle expenses on the business […]
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 […]
When you file Form 1040-NR U.S. Nonresident Alien Income Tax Return, you cannot file jointly with your spouse. There is only one exception to this rule outlined as follows: Per IRS Publication 519 U.S. Tax Guide for Aliens, page 54: I am a nonresident alien. Can I file a joint return with my spouse? Generally, […]
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 […]
If your return is rejected due to Rule Number IND-943, this message is coming directly from the IRS and TaxAct® is not provided any specifics as to why your return is being rejected. We suggest you contact the IRS at 800-829-1040 to determine what the issue is. Once you have details, please let us know […]
It is possible to e-file a state business return (1065, 1120-S, or 1120) even if you did not e-file the federal return through TaxAct®. Many states prefer that a state return be e-filed with the federal return. In order to submit your state return, you will need to make the system think that your federal […]
The Additional Medicare Tax is an additional (0.9%) tax to wages, compensation, and self-employment income, if an individual’s income exceeds the threshold amount for their individual filing status. This is a new tax added by the creation of the Affordable Care Act (ACA). For more information, please use the IRS Questions and Answers for the […]
If your return is rejected due to Rule Number IND-903, this message is coming directly from the IRS and TaxAct® is not provided any specifics as to why your return is being rejected. We suggest you contact the IRS at 800-829-1040 to determine what the issue is. Once you have details, please let us know […]
Troubleshooting Data Entry Issues on TaxAct If you’re experiencing problems typing in data entry fields—such as entering your name on a TaxAct form without it appearing or receiving an “invalid username or password” message when signing in—try the following steps: Check Your Input – Ensure you are typing correctly in the field. Disable Autofill – […]
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 […]
Per IRS Instructions for Schedule 8812 Additional Child Tax Credit: Taxpayer Identification Number Requirements Each qualifying child must have the required social security number (SSN). If you have a qualifying child who does not have the required SSN, you cannot use the child to claim the ACTC on either your original or an amended 2024 return. The required […]
The IRS explains the guidelines and provides FAQs for preparers using the Self-Select PIN Method for Forms 1040 and 4868 Modernized e-File (MeF) on its website: The Self-Select PIN Method ( Personal Identification Number ) is one option for taxpayers to use when signing their electronic Form 1040 and Form 4868. The PIN is any […]
Export or download a CSV file from QuickBooks, Sage One, Wave, or Xero by following these steps. Before importing, confirm your account balances. QuickBooks Click Reports. From the drop-down, select Trial Balance report. Select the period covered by the tax return. Click Export. Select the radio button in front of a comma separated value (CSV) […]
When converting a spreadsheet to import your company accounting records, be sure to include a column for the following as they are required to complete your trial balance import: Account name or description Debit Credit These items are required to complete the trial balance import. Adjust all accounts for tax purposes and ensure debit and credits […]
If you use TaxAct® 1120, you can transfer company accounting records into your corporation tax return by importing a trial balance report generated from your accounting software. It’s your responsibility (or your preparer’s responsibility) to ensure the accounting records in the CSV file match the appropriate tax line in the TaxAct program. If these don’t […]
The income amount(s) used on Publication 517 Worksheets 1-4 (Clergy worksheets) to calculate the percentage of tax-free income (Worksheet 1) and the net self-employment income for Schedule SE (Form 1040) (Worksheet 4), are not transferred automatically from the Form W-2 Wage and Tax Statement. These are manual entries made in the Self-employment Tax Adjustments section; […]
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 […]
Social security withholding is not refundable even if you are currently receiving social security benefits. Any social security withholding from employment is applied to your social security account and is used in determining your historical annual income and if applicable, can cause your social security income to be adjusted. You may want to contact the […]
Any rental loss carried forward from a year in which the Vacation Home Limitation was applicable to Federal Schedule E (Form 1040) Supplemental Income and Loss can only be used if there is sufficient rental income in that year to allow those losses. Per IRS Publication 527 Residential Rental Property (Including Rental of Vacation Homes), […]
As a nonresident alien, your income is either effectively connected to a U.S. business or is not effectively connected to a U.S. business. Effectively Connected Income (ECI) is taxed at the regular graduated rate. If your income is Not Effectively Connected (NEC), it is generally taxed at a 30% rate. However, if your resident country […]
Schedule NEC (Form 1040-NR) is used to report income not effectively connected with a U.S. trade or business. This may include, but is not limited to, dividends, royalties, and gambling winnings. Tax must be withheld at the source, and is generally withheld at a rate of 30%. The tax must be withheld by the person […]
TaxAct does support the e-filing of pass-through income reported on PA Schedules RK-1 and NRK-1; however, does NOT support the e-filing of pass-through income reported on Federal Schedule K-1. If the taxpayer received a PA Schedule RK-1 or Schedule NRK-1, then the taxpayer must indicate that within the Pennsylvania Q&A. If you are seeing the […]
The Red Alert in the electronic filing steps: “Error or Omission: Electronic Filing” with the following text, indicates there is an inherited IRA entered in the return with a prior basis (or there has not yet been an indication the prior basis was zero). This return does not qualify for electronic filing. The IRS does […]
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, when you live in a community property state and you and your spouse file separate returns, you must split any community income and deductions evenly between the spouses. However, different rules apply for the assessment of self-employment tax. Per IRS Publication 555 Community Property, page 7: Sole proprietorship. With regard to net income from […]
If you received both a Form 1099-A Acquisition or Abandonment of Secured Property and a Form 1099-C Cancellation of Debt for a rental property, enter the Form 1099-C first to determine if the canceled debt is taxable. If it is, you must decide whether or not to file Form 982 Reduction of Tax Attributes Due […]
IRS Publication 5137 Fringe Benefit Guide can help you understand the tax treatment of employee benefits. Contents Introduction Reporting and Withholding on Fringe Benefits Working Condition Fringe Benefits De Minimis Fringe Benefits No-Additional-Cost Services Qualified Employee Discounts Qualified Transportation Fringe Benefits Health and Medical Benefits Travel Expenses Transportation Expenses Moving Expenses Meals and Lodging Reimbursements […]
As the calculation of adjusted cost basis of the new shares resulting from a merger or acquisition varies for each situation, TaxAct® is unable to assist with the specifics of this calculation. Please consult your brokerage firm or the company(ies) involved for assistance in calculating the new cost basis of your shares.
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 […]
When a program is told to expect input in a certain format, e.g. certain alphabet or numeric characters, and it receives something else, it will return the invalid argument error. The most common reason for this error in TaxAct is that it’s receiving input for a language other than English. Make sure Windows Region and […]
If you want to add back all of the clients that you deleted or removed from Client Manager, you can rebuild Client Manager. Rebuilding will only add back clients that you deleted or removed from Client Manager, it will not add back clients whose files you deleted in that process. If you’re not sure how […]
Online backup is a manual process unless you use the Professional Enterprise Edition online option. You must perform the operation in your program each time you choose to back up your client returns online: From within your TaxAct Professional Edition program, click File in the upper menu bar, hover your mouse over Backup, then click Client Return(s). Click […]
Per the IRS Fulbright Grants webpage: Fulbright grants received by a U.S. citizen from an agency which dispenses and administers Fulbright grants (domestic or foreign) fall into two types of income for tax purposes. If you are a U.S. citizen recipient of a Fulbright grant, you must determine which category of income your grant falls into in […]
Form 8308, Report of a Sale or Exchange of Certain Partnership Interests is completed only if there was a sale or exchange of partnership interest when any money or other property received in exchange for that interest is attributable to unrealized receivables or inventory items (also known as a Section 751(a) exchange). Section 751(a) Exchange. […]
Massachusetts taxpayers are able to claim a credit for taxes paid to other jurisdictions. Mandatory payments made by a Massachusetts taxpayer into a Temporary Disability Insurance (TDI) program for another state, are classified as income taxes paid to another jurisdiction. Enter the amount contributed to the TDI program as part of total income taxes for […]
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In order to deduct your ground rent on leased land, you must first meet the following tests: The ground lease is for at least 15 years, including renewal periods, The land lease is freely assignable to the buyer of the home, The land owner’s interest is primarily a security interest (similar to a mortgage), and […]
Unlike other capital gain transactions, you cannot enter the word “Inherited” as the Date Acquired on Form 6252 Installment Sale Income. However, since the sale of inherited property is treated as long-term regardless of the actual holding period, you may leave the Date Acquired blank. This is not required for Form 6252. The TaxAct program […]
To enter or review information for specific boxes from Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc.: 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 Business Income dropdown, then click Partnership income (Form 1065 […]
When you enter a Form 1099-INT Interest Income and/or Form 1099-DIV Dividends and Distributions with an amount in the Foreign Tax Paid box, you will need to determine how much of the total interest, ordinary dividends, qualified dividends, and/or capital gain distributions are from foreign sources. You may have received a supplemental statement outlining these […]
How the information from Form W-2VI U.S. Virgin Islands Wage and Tax Statement is reported on your return depends on whether you were considered a BONA FIDE resident of the U.S. Virgin Islands. Per the IRS Individuals Living or Working in U.S. Territories/Possessions webpage: IRC 937 establishes the criteria for determining the residency of an […]
The prior year state refund amount on your Form 1099-G Certain Government Payments (or the amount imported from your prior year TaxAct return) may differ from the actual refund you received. There are various reasons as to why this is. Per the WI Individual Income Tax 1099-G and 1099-INT webpage: 5. I received a refund […]
Per IRS Instructions for Schedule SE, page SE-2: U.S. Citizens Employed by Foreign Governments or International Organizations You must pay SE tax on income you earned as a U.S. citizen employed by a foreign government (or, in certain cases, by a wholly owned instrumentality of a foreign government or an international organization under the International […]
Per IRS General Instructions for Certain Information Returns (Forms 1096, 1097, 1098, 1099, 3921, 3922, 5498, and W-2G), page 3: A. Who Must File See the separate specific instructions for each form. Nominee/middleman returns. Generally, if you receive a Form 1099 for amounts that actually belong to another person, you are considered a nominee recipient. […]
Generally speaking, workers’ compensation benefits are not taxable; however, Social Security benefits, including Social Security Disability Insurance (SSDI), can be taxable to the taxpayer (and spouse) depending on their overall financial situation and other circumstances. When a taxpayer qualifies to receive both workers’ compensation and Social Security benefits (or SSDI), then the Social Security Administration […]
Interest and/or penalties paid to the IRS are not deductible on your tax return. Per IRS Publication 529 Miscellaneous Deductions, page 7: Fines or Penalties No deduction is allowed for fines and penalties paid to a government or specified nongovernmental entity for the violation of any law except in the following situations. Certain amounts that […]
The Child and Dependent Care Credit is a nonrefundable credit. A nonrefundable credit can reduce your tax liability to 0 (zero), however it cannot result in a refund, which means if your tax liability is $0, you will not receive this credit because there is no tax to reduce. For more information, go to IRS […]
If your employer provided dependent care benefits under a qualified plan, but there is no amount in Box 10 of Form W-2 Wage and Tax Statement, you should contact your employer to determine if they need to issue you a Form W-2-C Corrected Wage and Tax Statement. The IRS will receive a copy of the […]
According to the IRS: Question: If you have run a small business in the past, but this year there is no income or expenses, is it necessary to file a Schedule C? Answer: If your sole proprietorship business is inactive during the full year, it is not necessary to file a Schedule C (Form 1040) […]
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 […]
In TaxAct® Online and Desktop editions, you can add line item information to a field. This is useful if you need to add several numbers together to figure the total amount to enter on a particular form, or if you would like to add comments to a given field. Note. For Online returns, first click […]
If you come across a Red Alert, and see there is a question on that screen with “N/A” as a selection, the alert may be asking that you switch your “N/A” selection to “Yes” or “No” instead. Although the alert may not be directly related to any other information on the screen, you will, of […]
The additional 3.8% Medicare contribution tax on investment income is for taxpayers whose adjusted gross income (AGI) exceeds $200,000 (or $250,000 if married filing jointly). Investment income is defined as interest, dividends, annuities, royalties, rents, passive business income, and gains from dispositions of property (other than property used in a trade or business, excluding passive […]
TaxAct does not support the following forms as they are submitted separately from your income tax return: Form 433-A Collection Information Statement for Wage Earners and Self-Employed Individuals Form 433-B Collection Information Statement for Businesses Form 433-D Installment Agreement Form 433-F Collection Information Statement Note that any link in the information above is updated each […]
If you converted your primary residence into a rental property during the tax year, you will need to manually allocate the home expenses between Schedule A (Form 1040) Itemized Deductions (personal) and Schedule E (Form 1040) Supplemental Income and Loss (rental) based on the portion of the year you used the home as a primary […]
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 […]
Although the IRS Instructions for Form 8938 Statement of Specified Foreign Financial Assets specifically outline the identifying information to list at the top of the form, there is no additional guidance relating to the names that should be listed on the attached additional sheets. The reason TaxAct® lists both names at the top of the […]
IRS Form 5329 is the federal tax form used 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 in TaxAct: TaxAct Online From within your TaxAct return, click Federal. On smaller devices, click the menu […]
The Ohio IT 1040/SD 100 Instructions have a list of the Ohio school districts (bold print indicates a school district with an income tax in effect for the tax year). If you lived in (resided) or were domiciled in one of these school districts with an income tax for all or part of the year, you […]
All paid tax return preparers must obtain or renew their Preparer Tax Identification Number (PTIN) annually. The PTIN renewal period begins in mid-October and all PTINs expire on Dec. 31. If you must pass the Registered Tax Return Preparer test, do not delay in making your appointment. Learn more about PTIN renewal and CE requirements […]
The taxpayer’s address at the top of Form 8606 Nondeductible IRAs, as well as the preparer information at the bottom of the form, are only used if the form is filed separately from the taxpayer’s return. As a result, this information does not automatically populate in TaxAct®. If Form 8606 is filed separately, it cannot […]
On Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc, Box 20 is designated for “Other Information”. The TaxAct program has entry fields for the following items that may have been reported to you in Box 20. Tax and interest on 409A nonqualified deferred compensation plan (This amount will transfer to Schedule 2 (Form […]
If you need to submit supporting documentation (i.e. a statement or qualified appraisal) for Form 8283 Noncash Charitable Contributions, you are still able to e-file your return; however, you will need to complete and mail Form 8453 U.S. Individual Income Tax Transmittal for an IRS e-file Return, along with the supporting documentation, to the IRS. […]
When a partnership dissolves, terminates, or ceases operations, a final tax return must be filed by the 15th day of the third month following the date its tax year ended. The IRS instructions for Form 1065, U.S. Return of Partnership Income, generally allow a prior-year Form 1065 to be used for certain short tax year […]
If you received a Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc. with an amount reported in Box 20 with a code “T” for depletion and you do not have royalty income or deductions to report on Schedule E (Form 1040) Supplemental Income and Loss on page 1, please follow the steps below to enter this information on to […]
Per IRS Publication 17 Your Federal Income Tax For Individuals, page 68: Recoveries A recovery is a return of an amount you deducted or took a credit for in an earlier year. The most common recoveries are refunds, reimbursements, and rebates of deductions itemized on Schedule A (Form 1040). You may also have recoveries of […]
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 […]
The “NPA” text (to indicate “Not a passive activity”) and an amount will appear below Line 26 on Schedule E (Form 1040) Supplemental Income and Loss if the selection is made in the TaxAct® program to indicate this is a nonpassive activity. To make this selection (if you need help accessing Schedule E, go to […]
IRS Letter 525 is issued to inform the taxpayer of proposed changes stemming from an IRS examination. The letter explains the changes to the tax return and requests payment of the balance due (or outlines the amount of the adjusted refund). Sections of Letter 525 Header – This area contains the notice date, your Social […]
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 […]
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 […]
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 […]
The TaxAct Wisconsin 1040 Edition does not include the “session” calculation method for gambling winnings and losses. If you qualify for this method, you must manually calculate the amount of net winnings. If you determine any difference in taxable amounts of your gambling winnings, under the session method, you can then enter an adjustment. To […]
The online backup service included with the TaxAct® Professional Enterprise Edition for the 2016 tax year had expired on May 1, 2020. You can no longer access your 2016 client data online. Please contact your Professional Edition representative for more information.
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 […]
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 […]
If you are seeing the Red Alert “Error or Omission: Form 8815 – Bond Interest” when reviewing your return, it is likely due to the amount entered on Line 6 of Form 8815 Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989 (For Filers With Qualified Higher Education Expenses) being […]
You may see the Special Distributions From Retirement Plans worksheet print with your return if you have entries from an inherited IRA or rollovers from qualified retirement plans to Roth IRAs or in-plan rollovers to designated Roth accounts. This worksheet is not electronically filed with your return, but is only to show the calculation of […]
Even if you converted your main home into a rental property (or vice versa), you may be able to exclude some of the gain on the sale of your home if you meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have: […]
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 […]
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 […]
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.
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 […]
With the IRS reporting requirements surrounding securities, brokers are generally required to report certain information to you about your stocks. However, when the stocks have been transferred to your current broker from a previous broker, the current broker can treat the stocks as non-covered securities. When this is the case, your current broker may not […]
Continuing education (CE) requirements will vary based on your professional designation. Attorneys, certified public accountants, and enrolled agents each have their own CE requirements. Other tax professionals may now participate in the IRS’s Annual Filing Season Program. Click the links below for additional information. Related Links IRS List of Approved Continuing Education Providers CE FAQs: […]
See the following instructions if you received one of these IRS rejection codes: “FW2-502,” “1099R-502-02,” “F2439-502-01,” or “FW2G-502.” Understanding reject code “FW2-502:” If your return is rejected with this code, the Employer Identification Number (EIN) you entered for a Form W-2 Wage and Tax Statement does not match the number in the IRS Masterfile. An […]
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 […]
To enter the amount of state exempt dividend income (i.e. due to your mutual fund investing in U.S. government obligations), follow the steps below. If your state allows this deduction, it will flow to the appropriate section of the state return. If you need help accessing Form 1099-DIV in the TaxAct program, go to our […]
Form W-RA is required to be mailed to the Wisconsin Department of Revenue, along with supporting documentation, when you’re claiming certain credits or other items on your e-filed return. Per the WI Form W-RA Required Attachments for Electronic Filing, page 2: Purpose of Form Use Form W-RA to submit supporting documentation when you electronically file […]
If you received an IRS notice and it is indicating an Accuracy Related Penalty, this penalty is assessed when a significant amount of taxable income is omitted from the return. You will need to provide the IRS written explanation of how you acted in good faith and how the omission of the information was not […]
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 add or remove a state return from a client return: From within your TaxAct Professional Edition program, on the Client Manager screen, double-click the client you want to edit. Click Return in the upper menu bar, hover your mouse over State, then click Add/Remove State… To add a state, click the checkbox next to […]
If you received a Form 1098-MA Mortgage Assistance Payments in addition to the Form 1098 Mortgage Interest Statement, you may use a special method to compute your deduction for mortgage interest, real estate taxes, and mortgage insurance premiums on your main home (certain conditions apply, see the following). You are NOT required to use this […]
Per the New York Tax return preparer e-file mandate web page (Important notes about the mandate, note 4): If you can’t electronically file the return because it’s not supported by your approved e-file software or it can’t be filed on our website, then you aren’t required to e-file it. Additional information for preparers is available […]
Per the IRS Letters and Notices Offering an Appeal Opportunity webpage: Letter 531 – Notice of Deficiency You will get this letter if you owe additional tax or other amounts for the tax year(s) listed in the letter. The letter explains how to dispute the adjustments if you do not agree. If you want to […]
Per CT Form CT-1040 Connecticut Resident Income Tax Instruction Booklet, page 27: Am I Eligible for the Credit for Income Taxes Paid to Qualifying Jurisdictions? If you are a resident of Connecticut and if any part of your income was taxed by a qualifying jurisdiction, you may be able to claim a credit against your […]
The TaxAct® program does not support the direct entry of the S Corporation Schedule K-1 (Form 1120-S) into the Business Tax Programs. You will need to enter the income reported on the Schedule K-1 (Form 1120-S) in the applicable income fields and the business deductions reported on the Schedule K-1 (Form 1120-S) as business expenses for […]
One of the requirements for the Child and Dependent Care Credit is that you and your spouse must have earned income during the year. You may wish to review your Form W-2 Wage and Tax Statement entries. If you have entered one or more Forms W-2 but mislabeled them for the same spouse, this could […]
During the Retirement Plan Income section of the Federal Q&A, you may come across a screen titled Special Distributions. On this screen, you may see a Military Pension checkbox which can be checked if the distribution you received is from a military pension. Generally, this checkbox does not influence how the distribution is treated or […]
Per IRS Instructions for Form 1120-S U.S. Income Tax Return for an S Corporation, on page 22: 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 […]
A mortgage secured by your main home to purchase land would be deductible as long as it meets the same requirements any other mortgage must meet. However, if the mortgage is secured by the land and potential construction of your main or second home, then it must follow the rules outlined below. Per IRS Publication […]
Qualified education expenses include tuition and certain related expenses required for enrollment in a course at an eligible educational institution. Student-activity fees and expenses for course-related books, supplies, and equipment such as computers are included in qualified education expenses only if the fees and expenses must be paid to the institution as a condition of […]
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 […]
Basis is the amount of your investment in property for tax purposes. The adjusted partnership basis will be used to figure your gain or loss on the sale or disposition of partnership interest. To help you track basis, there is a worksheet within the TaxAct® program that will assist you in calculating a partner’s adjusted […]
Per IRS Instructions for Form 8865 Return of U.S. Persons With Respect to Certain Foreign Partnerships, on page 1: Purpose of Form Use Form 8865 to report the information required under section 6038 (reporting with respect to controlled foreign partnerships), section 6038B (reporting of transfers to foreign partnerships), or section 6046A (reporting of acquisitions, dispositions, […]
Per IRS Publication 946 How to Depreciate Property, page 23: Claiming the Special Depreciation Allowance You can take a special depreciation allowance to recover part of the cost of qualified property (defined next), placed in service during the tax year. The allowance applies only for the first year you place the property in service. The […]
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 […]
IRS Publication 525 Taxable and Nontaxable Income, page 33: Gifts and inheritances. In most cases, property you receive as a gift, bequest, or inheritance isn’t included in your income. However, if property you receive this way later produces income such as interest, dividends, or rents, that income is taxable to you. If property is given […]
If you receive a red alert about inconsistent ID numbers, it is because the identification number entered for one (or more) of the partners does not match the entity type selected for that partner. For an Individual (or Nominee Individual) Partner, enter the partner’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). For […]
TaxAct® does not support Form 8849 Claim for Refund of Excise Taxes. This is a separate return from the individual tax return on Federal Form 1040 U.S. Individual Income Tax Return. Below are the links to these forms if you wish to complete and paper file them. For electronic filing of the form, according to […]
Online: The returns created in the online TaxAct® program are updated in as you make changes, so once you change a value, the change is saved. There is not a feature that allows you to view or access the previous values in the return. Desktop: Returns created in the desktop the desktop TaxAct® program are […]
Election Statements TaxAct supports a number of election statements within the business programs, but these are generated based on certain information the user enters in the return. We do not support an additional form for user-entered elections. If you wish to attach additional information, you would need to paper file the return to include those […]
Per IRS Instructions for Form 8839 Qualified Adoption Expenses, page 3: Foreign child. If the eligible child is a foreign child, you can’t take the adoption credit or exclusion unless the adoption becomes final. A child is a foreign child if he or she wasn’t a citizen or resident of the United States (including U.S. […]
In the TaxAct® programs, the fields calculated by the program may appear as either green or blue in the desktop program and are either able to be changed or not able to be changed in the Q&A Interview section of the program. The blue amounts (or those amounts not able to be modified in the […]
A PDF (short for Portable Document Format) is a common type of file that displays documents as they will appear when printed. Even if the document contains complex forms and tables, the PDF will look the same when viewed or printed from any computer, regardless of which software program originally created it. With TaxAct®, the […]
At this time, the TaxAct® programs do not include tracking and/or organizing features. Our recommendation would be to use whichever business or personal software that you are most comfortable with for tracking your expenses through the year, then using the totals at year end for entry into the TaxAct program. Please feel free to submit […]
IRS Publication 4128 Tax Impact of Job Loss is a publication by the IRS to assist displaced workers. 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.
To complete and paper file your Wisconsin Schedule H rather than electronically file it with the rest of your Wisconsin return: From within your TaxAct return (Online or Desktop), click State, then click Wisconsin (or WI). On smaller devices, click in the upper left-hand corner, then click State. Click Refundable Credits in the Wisconsin Quick […]
With certain versions of the Google Chrome browser, some forms that show personal data will print in a way that masks the data so it isn’t visible. Instead of the expected information, a black box appears. To fix this, you can sign out of your return and sign back in using Microsoft Edge or Firefox, […]
If you are completing Federal Schedule C (Form 1040) Profit or Loss From Business, you will enter the income and expenses which will then calculate the net profit (or loss) of the business. That net profit (or loss) amount then flows to Line 3 of Schedule 1 (Form 1040) Additional Income and Adjustments to Income. […]
IRS Publication 555 Community Property outlines the requirements for filing with a status of Married Filing Separate when you are domiciled in a community property state. TaxAct supports the completion of these returns so they can be electronically filed. There are two sections in the publication, “Community Property Laws Disregarded” starting on page 8 and […]
The best method for entering information from a grantor letter into the TaxAct® program is through the Schedule K-1 (Form 1041) Beneficiary’s Share of Income, Deductions, Credits, etc.. Schedule K-1 (Form 1041), which reports pass-through information to beneficiaries of a trust or an estate, is the most similar to the grantor letter. To enter or […]
**The information below has not been verified for the 2023 tax year as the IRS Pub. 550 has not yet been released by the IRS.** Per IRS Publication 550 Investment Income and Expenses (Including Capital Gains and Losses), page 20: Dividends Used To Buy More Stock The corporation in which you own stock may have […]
You can deduct qualified expenses for the business use of your home when filing a Partnership return. The amount calculated per the worksheet in IRS Publication 587 (see information below) would be entered as unreimbursed partnership expenses on the Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc., and the adjustment on the […]
If your Federal Partnership Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc. from a Publicly Traded Partnership (PTP) reflects a loss in Box 11F for Other Loss that falls under IRS regulation 1.469-1T(e)(6), this amount should be reported as a nonpassive loss on Federal Schedule E Supplemental Income and Loss, Page 2, Line 28, Column (h) if […]
If you have an amount in Box 13, Code J of your Partnership Schedule K-1 for Sec 59(e)(2) expenditures, the information will be reported on Schedule E, Page 2. You can deduct these expenditures in full or you can elect to amortize them. Per IRS Partner’s Instructions for Schedule K-1 (Form 1065) Partner’s Share of […]
The creditor information from Form 1099-C Cancellation of Debt does not need to be entered into the TaxAct® program since the actual Form 1099-C is not transmitted with the return. Completing this form in TaxAct transfers the information to the appropriate sections of the return. The IRS will already have a copy of the form […]
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
To enter an exempt amount for your Form 1099-OID Original Issue Discount (if you need help accessing Form 1099-OID in the TaxAct program, go to our Form 1099-OID – Entering in Program FAQ): From within your Form 1099-OID, continue with the interview process until you reach the screen titled OID Interest – Original Issue Discount. Enter the […]
If you are required by law to electronically file all of your clients’ tax returns, but need an exception to this requirement for a particular return, you should file Form 8948 Preparer Explanation for Not Filing Electronically. This form is available in the TaxAct Professional Edition of the software and is accessed through the Forms […]
You can use the Tax Calculator to answer a few simple questions about your life, income, and expenses, and get an idea of whether you should expect a refund and how much, or if you’ll owe the IRS when you file taxes in the future. To use the Tax Calculator in your TaxAct return: TaxAct […]
If you import your previous year’s tax data into the current year, the information will automatically populate the Prior Year Comparison report in the program. If you do not import the prior year’s information, you can still manually enter the prior year information for the report. To enter the information for the Prior Year Comparison report: […]
An IRC Section 469(c)(7)(A) Election to Aggregate Rental Real Estate Activities, is a statement written down on a piece of paper (there is not a special form to fill out) and sent with your return for the tax year of the election. You can do this in the TaxAct program and still e-file the return. […]
If you had to repay an amount of Social Security Benefits that you included in your income in an earlier year, you may be able to deduct the amount repaid from your income for the year in which you repaid it. Per IRS Publication 915 Social Security and Equivalent Railroad Retirement Benefits, page 5: Repayment of benefits. Any […]
Per IRS Instructions for Schedule SE (Form 1040) Self-Employment Tax, page SE-2: U.S. Citizens or Resident Aliens Living Outside the United States If you are a self-employed U.S. citizen or resident alien living outside the United States, in most cases you must pay SE tax. You can’t reduce your foreign earnings from self-employment by your […]
If you entered a zero in the AGI entry field or left it blank, and did not check 2022 AGI was 0 during the e-filing steps, you will receive this Red Alert: Error or Omission: Incomplete Self Select Information Taxpayer You have indicated you wish to file a paperless return; however, the taxpayer’s 2022 Adjusted […]
If columns are missing or pushed to a different page when you print a report, it may be related to the system default font size. You most likely have increased the Dots Per Inch (DPI) of your system fonts within the Windows Display settings. You can first try this (if you’re using the desktop program): […]
**The information below has not been verified for the 2021 tax year as the IRS Pub. 550 has not yet been released by the IRS.** To enter or review information from Form 1099-INT, go to our Form 1099-INT – Entering in Program FAQ. The following information will assist with the entry of Form 1099-INT Interest Income when the […]
Per IRS Instruction 1040 1040 and 1040-SR Instructions, page 104: Line 11 Excess Social Security and Tier 1 RRTA Tax Withheld If you, or your spouse if filing a joint return, had more than one employer for 2022 and total wages of more than $147,000, too much social security or tier 1 railroad retirement (RRTA) tax may […]
As a general rule, if you only occasionally sell timber (one or two sales every three or four years), you are not in the timber business and not required to file Form T Forest Activities Schedule (the TaxAct program does not support IRS Form T; you will need to go to the IRS website to […]
Go to the IRS Instruction 1040 Tax and Earned Income Credit Tables booklet to access tax and EIC tables. 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.
Expenses for medical care (including transportation) you receive because you are a donor or a possible donor of a kidney or other organ can be entered on Schedule A (Form 1040) Itemized Deductions or in the Itemized Deduction section of the TaxAct program. Unreimbursed medical expenses need to be more than 7.5% of Adjusted Gross […]
Per IRS Instructions for Form 8880 page 2: Who Can Take This Credit You may be able to take this credit if you, or your spouse if filing jointly, made (a) contributions (other than rollover contributions) to a traditional or Roth IRA; (b) elective deferrals to a 401(k), 403(b), governmental 457(b), SEP, SIMPLE, or to […]
TaxAct® allows a deduction for Bailey Retirement benefits on the North Carolina return. You must first enter the retirement income on Form 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. during the Federal Q&A. To enter the retirement income in the program: From within your TaxAct return, click Federal. On smaller devices, click in the upper […]
For information regarding foreign currency transactions, go to the IRS Foreign Currency and Currency Exchange Rates webpage. There are links to Governmental Resources and External Resources where you may find exchange rates. Note that any link in the information above is updated each year automatically and will take you to the most recent version of […]
The TaxAct® program does not support IRS Form 2350 Application for Extension of Time to File U.S. Income Tax Return. This form is filed separately from your tax return and mailed to the address listed below. Per IRS Instructions for Form 2350, page 3: Purpose of Form Use Form 2350 to ask for an extension […]
For more information, visit IRS Publication 970 Tax Benefits for Education. American Opportunity Credit Who Can Claim the Credit? Generally, you can claim the American opportunity credit if all three of the following requirements are met. You pay qualified education expenses of higher education. You pay the education expenses for an eligible student. The eligible […]
Per IRS Publication 15-B Employer’s Tax Guide to Fringe Benefits, page 3: 1. Fringe Benefit Overview A fringe benefit is a form of pay for the performance of services. For example, you provide an employee with a fringe benefit when you allow the employee to use a business vehicle to commute to and from work. […]
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 Job […]
Tax Reform Update: Legal fees can no longer be deducted as a miscellaneous deduction. Per IRS Publication 529 Miscellaneous Deductions, page 2: Unreimbursed Employee Expenses You can no longer claim a deduction for unreimbursed employee expenses unless you fall into one of the following categories of employment, or have certain qualified educator expenses. Armed Forces […]
If you are a sole proprietorship, you would enter your cost of goods sold and other business expenses on Federal Schedule C (Form 1040) Profit or Loss From Business. Self-employment income is reported on Schedule C, and the net profit or loss is reported on Line 11 of Schedule 1 (Form 1040) Additional Income and […]
As an independent contractor or self-employed individual, you should report your income on Schedule C (Form 1040) Profit or Loss From Business. Per IRS Instructions for Schedule C: Use Schedule C (Form 1040) to report income or (loss) from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies […]
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. Per IRS Instructions for Form 2106 Employee Business Expenses, page 3: Standard meal allowance. Instead of actual cost, you may be able to claim the standard […]
If you received interest income, but do not have the ID number of the payer, enter the information as though you had received a Form 1099-INT Interest Income, but leave off the Payer’s Federal Identification Number (FEIN). This number is not required and the return will e-file without the number. The information required by the […]
Per IRS Publication 525 Taxable and Nontaxable Income, page 22: Surrender of policy for cash. If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. In most cases, your cost (or investment in the contract)is the total of […]
If you claimed the First-Time Homebuyer Credit for a home purchased in 2008, and you determine you are only responsible for half of the credit repayment this year (i.e. filed jointly the year the credit was claimed, but are now filing separately or your spouse is now deceased), you will need to modify the credit […]
If your filing status was Married Filing Joint when you claimed the First-Time Homebuyer Credit, but you are now divorced or separated, please review the information below. The Line 3e instructions pertain to you if you are the spouse who transferred the home to your spouse or ex-spouse. The Line 4 instructions pertain to you […]
If you file returns for another preparer (or need another preparer to file returns for you), there are a few extra steps to complete in your TaxAct® Professional Edition program. To e-file returns as the Electronic Return Originator, but not as the Paid Preparer: From within your TaxAct Professional Edition program, click Preparer in the […]
If you are a divorced or a separated parent, your child may still be a qualifying person for the Child and Dependent Care Credit even if you cannot claim your child as a dependent. Per IRS Publication 503 Child and Dependent Care Expenses, page 4: Child of divorced or separated parents or parents living apart. […]
All unemployment compensation you receive is taxable and included in your gross income. If you received unemployment compensation during the year, you should receive a Form 1099-G Certain Government Payments showing the amount you were paid. This amount must be included in your income. To enter or review your unemployment compensation information from Form 1099-G […]
If Box 13 has code W on the Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc. you received, you can report it in the TaxAct program to claim a Capital Construction Fund deduction (if you need help accessing Schedule K-1, go to our Schedule K-1 – Entering FAQ): From within your Schedule […]
Per IRS Publication 17 Your Federal Income Tax For Individuals, page 28: Age Test To meet this test, a child must be: Under age 19 at the end of the year and younger than you (or your spouse, if filing jointly); A student under age 24 at the end of the year and younger than […]
Burial or funeral expenses, including the cost of the cemetery lot, are not deductible as an itemized deduction on Schedule A (Form 1040) Itemized Deductions. They are, however, deductible on Schedule J of Form 706 United States Estate (and Generation-Skipping Transfer) Tax Return. See Instructions for Form 706 https://www.irs.gov/pub/irs-pdf/i706.pdf For a complete list of nondeductible expenses, go to IRS […]
The following expenses are not deductible as an itemized deduction on Schedule A (Form 1040) Itemized Deductions. Per IRS Publication 529 Miscellaneous Deductions, page 6: Nondeductible Expenses In addition to the miscellaneous itemized deductions discussed earlier, you can’t deduct the following expenses. List of Nondeductible Expenses Adoption expenses. Broker’s commissions. Burial or funeral expenses, including […]
Per IRS Publication 17 Your Federal Income Tax For Individuals, page 28: Qualifying Child Five tests must be met for a child to be your qualifying child. The five tests are: Relationship, Age, Residency, Support, and Joint return. CAUTION! If a child meets the five tests to be the qualifying child of more than one […]
To easily see the rules regarding the Earned Income Credit (EIC), you can refer to Table 1 “Earned Income Credit In a Nutshell” on page 2 of IRS Publication 596 Earned Income Credit. Note that any link in the information above is updated each year automatically and will take you to the most recent version […]
Per IRS Publication 3, Armed Forces’ Tax Guide, page 11: Are My Travel Expenses as a Reservist Deductible? If you are a member of a reserve component of the Armed Forces and you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you can deduct […]
Military and civilian pay from the U.S. government is not eligible for exclusion on Form 2555 Foreign Earned Income. Per IRS Publication 3 Armed Forces’ Tax Guide, page 9: Foreign earned income exclusion. Certain taxpayers can exclude income earned in foreign countries. For 2023, this exclusion amount can be as much as $120,000. However, the […]
The TaxAct® program supports the entry of fifty (50) Forms 8621 Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund per return. If you need to file more than 50 Forms 8621 through TaxAct, you must paper file your return, but you can still enter the 50+ Forms 8621 […]
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. Form W-2 Wage and Tax Statement, Box 14, can be used by the employer to give other information to an employee. Unreimbursed employee expenses (travel expenses, dues/licenses, tools/supplies, education, […]
Per IRS Publication 575 Pension and Annuity Income, page 6: Insurance Premiums for Retired Public Safety Officers If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from your eligible retirement plan that […]
The worksheet in the TaxAct® program titled “Federal Form 1040 Other Income – Supporting Details for Federal Schedule 1 (Form 1040) Line 8” is a TaxAct worksheet and not an IRS form. There are two lines to enter descriptions for miscellaneous income and the amount for each item. If you have more than two income […]
If you have a TaxAct account and would like to speak to our Customer Service and Support team, call us at 319-373-3600.
California defines a single member LLC as a “Disregarded Entity” because the single owner’s income is treated as a Sole Proprietor on the Federal Schedule C Profit or Loss From Business (per the IRS instructions). While a single member LLC does not file California Form 565, they must file California Form 568 which provides details […]
There are two types of Tax Rates related to your tax return: the “Marginal Tax Rate” and the “Effective Tax Rate” Marginal Tax RateThe marginal tax rate (aka Marginal Tax Bracket) is the federal income tax rate that will be applied to any additional income that you might receive. For example, if your marginal tax […]
If you have a Net Operating Loss (NOL) amount on Line 8 of Schedule 1 (Form 1040) Additional Income and Adjustments to Income, this amount is automatically entered as a positive number on Line 2e of Form 6251 Alternative Minimum Tax – Individuals. If the tax liability on the return did not decrease as much […]
Restore a Local Backup File From within your TaxAct Professional Edition program, click File in the upper menu bar, hover your mouse over Restore Backup, then click Client Return(s). Click the circle next to Local, then click Next. Click Browse, then navigate to the folder where you saved your backup return, click the folder, then […]
With your TaxAct Professional Edition program, you can back up client returns and preparer information by following the steps below. NOTE: It’s a good idea to back up preparer information any time you make changes to it and to keep a backup in the Client Data folder of the default install location of the computer. […]
The TaxAct Enterprise Edition allows preparers to attach and associate documents and images with client returns for record keeping purposes. It allows the attachment of scanned images of client documents (W-2, 1099, etc.). Although this does not automatically import the document into the return, you are able to keep scanned images of client documents with the […]
In your TaxAct Professional Edition program, you can import a prior year return when you create a new return or after you create a return. If you have already created a return, you can use either import method. If you are importing when creating a new return, you need to start on the Client Manager […]
To remove the Paid Preparer information from your Form 1040 U.S. Individual Income Tax Return: From within your TaxAct Professional Edition, click Forms in the options bar to view the Forms Explorer (if it is not already visible). Click Federal from the dropdown in forms explorer, and click the Information Worksheets dropdown, then click Basic Information to see the […]
To change any of your preparer information that appears on the returns, cover letters, and invoice: In your TaxAct Professional Edition program, click Preparer in the upper menu bar, then hover your mouse over Master Information, then click Preparers. In the window that appears, click the Pencil Icon next to the Preparer Name you want to edit. […]
An Enrolled Agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee. Enrolled Agent status is the highest credential the IRS awards. Individuals who obtain this […]
If you have data to enter for Box 9 from Form 1099-DIV Dividends and Distributions, review your return by running the Double-Check feature. There will be a Yellow warning titled Warning: Form 1099-DIV – Liquidation Distributions which will provide additional information. Generally, when you receive distributions of your stock from a liquidating corporation, you will […]
The yellow alert Warning: Excess FICA Credit states in the TaxAct program: “Return to the Wages topic and confirm that you have properly identified the owner of each Form W-2, W-2GU, W-2AS, and W-2VI, and W-2CM. A credit for excess FICA withholding of $XXX has been included on your return. If you have incorrectly labeled […]
If your California return was rejected with Rule Number F540/NR/NRS/2EZ-170 (or 180), the California Franchise Tax Board (FTB) is saying the amount entered as the Prior Year Adjusted Gross Income (AGI) is not matching their records. It is possible California’s records are incorrect, but you can still e-file the state return. If you need help […]
Per the IRS Topic No. 431 Canceled Debt – Is It Taxable or Not? webpage: If you borrow money and are legally obligated to repay a fixed or determinable amount at a future date, you have a debt. You may be personally liable for a debt or may own a property that’s subject to a debt. […]
The TaxAct® program supports the entry of up to ten (10) Forms 1099-C Cancellation of Debt. If you have more than ten to enter, you will need to group your forms according to the nature of the canceled debt. Once the forms are grouped, you can enter the combined amounts on one or more Forms […]
You must be covered under a High Deductible Health Plan (HDHP) in order to establish and take a deduction for contributions to a Health Savings Account (HSA). Per IRS Publication 969 Health Savings Accounts and Other Tax-Favored Health Plans, page 4: High deductible health plan (HDHP). An HDHP has: A higher annual deductible than typical […]
TaxAct supports the individual tax return on Form 1040 U.S. Individual Income Tax Return but does not support Form SS-8 Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. This form is a request for a determination letter from the IRS regarding a worker’s status and is completely separate from […]
When completing Form 8829 Expenses for Business Use of Your Home, direct expenses are those you can specifically identify as being derived from or of benefit to the business part of your home. Direct expenses would include painting or repairs to a specific area of your home used for business. Enter 100% of your direct […]
TaxAct® supports Form 5472 Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business within the corporate Form 1120 U.S. Corporation Income Tax Return return. There is a maximum of five copies that can be added to the return. If you need more than five copies, you must complete the additional Forms 5472 […]
TaxAct® supports the entry of ten copies of Form 2439 Notice to Shareholder of Undistributed Long-Term Capital Gains. 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.
Beginning in 2018, the moving expense deduction is temporarily suspended, unless you are a member of the Armed Forces on active duty, and due to a military order, you move because of a permanent change of station. Per Instructions for Form 3903 Moving Expenses, page 2: Line 5 If line 3 is more than line […]
TaxAct supports the individual tax return on Form 1040 U.S. Individual Income Tax Return, but does not support Form 3520 Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts or Form 3520-A Annual Information Return of Foreign Trust With a U.S. Owner. These forms are separate returns from the individual […]
Multiple Forms 4684 Casualties and Thefts can be used for a single casualty incident. TaxAct allows up to 20 copies of the Section A portion of the Form 4684 with four properties each, a total of 80 entries. TaxAct allows up to five copies of the Section B portion of the Form 4684 with four […]
Per IRS Instructions for Form 2441 Child and Dependent Care Expenses, page 3: Who Can Take the Credit or Exclude Dependent Care Benefits? You can take the credit or the exclusion if all five of the following apply. Your filing status may be single, head of household, qualifying widow(er) with dependent child, or married filing […]
When you print a copy of your Wisconsin return, the printout will contain a sheet titled “Homestead Credit Notes and Attachments Checklist.” This checklist will help determine exactly what supporting documents you need to send with your I-016 Schedule H Wisconsin homestead credit claim. In addition, as noted on page 2 of Schedule H, you […]
To access the Wisconsin Rent Certificate Q&A screens: From within your TaxAct return (Online or Desktop), click State, then click Wisconsin (or WI). On smaller devices, click in the upper left-hand corner, then click State. Click Refundable Credits in the Wisconsin Quick Q&A Topics menu to expand, click Homestead Credit Topics to expand, then click […]
TaxAct® supports the entry of up to twelve (12) Care Providers on Federal Form 2441 Child and Dependent Care Expenses. The IRS Form 2441 that prints with the return only allows two providers to be listed and then there is an overflow sheet that prints to list the remaining providers. If you need to enter […]
How to properly depreciate a home that was used as a rental property for part of the tax year, and then converted into a primary residence the other part of the tax year (or sold/disposed of the home). When going through the Schedule E Supplemental Income and Loss section of the TaxAct® program, you will […]
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 over to later years until it is completely used up. Any capital loss carryover to the next tax year will automatically be calculated […]
To enlarge the font in Forms View, click the Zoom icons in the top right corner of Forms View. The icons look like magnifying glasses with a – or + in them, and when you hover your mouse over them, they say Zoom In or Zoom Out. Click the Zoom In icon to make the […]
If you had a child born during the tax year and are filing a joint Minnesota income tax return, you may be eligible to claim a Newborn Child Care Credit even if you did not pay any child care expenses. You do not need to qualify for the Federal Child & Dependent Care Credit to […]
If your federal return is rejected with IRS Reject Codes: “IND-664,” “IND-665,” “IND-666”, or “IND-667,” then the primary or secondary taxpayer’s Social Security Number (SSN) appears more than once in the IRS files for the prior tax year. Therefore, they are unable to match the information and will not allow you to use the self-select […]
IRS Rejection Code “IND-116,” regarding the age of a dependent in relation to taking the Child Tax Credit, indicates that the information entered on the federal tax return does not match the information in the IRS database. As the IRS receives their information from the Social Security Administration, if the date of birth entered for […]
Valid Ranges for Social Security Number (SSN): 001-01-0001 through 665-99-9999 667-01-0001 through 899-99-9999 750-01-0001 through 763-99-9999 764-01-0001 through 899-99-9999 When the SSN “Group” contains zeros, the SSN is a test number and the return will be rejected. When the SSN “Serial” contains all zeros, the return will be rejected. Social Security/Taxpayer Identification Numbers are broken […]
Per IRS Publication 925 Passive Activity and At-Risk Rules, page 3: Passive Activities 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. Rental Activities A rental activity is […]
A taxpayer that is under age 16 at the end of the year and has never filed a tax return does not qualify to e-file. In this case, there are two options: A paid tax preparer can complete and e-file the return The taxpayer can paper file the return If the taxpayer is under 16 […]
In most cases, you cannot e-file a return which contains a Form W-2 Wage and Tax Statement with no wages in Box 1. You will see the following alert when there is a Form W-2 in the return that contains information, but does not contain any wages in Box 1. Error or Omission: Form W-2 […]
Payments you receive for providing care to foster individuals generally are not included in your income. However, you must include payments received for the care of more than five individuals age 19 or older and certain difficulty-of-care payments. Per IRS Publication 525 Taxable and Nontaxable Income, page 34: Foster care providers. Generally, payment you receive […]
Taxes for Excess Golden Parachute Payments are reported to the IRS on Schedule 2 (Form 1040) Additional Taxes, Line 17k. TaxAct supports the entry of excise tax on excess golden parachute payments reported on Form W-2 Wage and Tax Statement, Box 12, Code K, and excess golden parachute payments reported on Form 1099-MISC Miscellaneous Income, […]
You can deduct your home mortgage interest only if your mortgage is a secured debt. A secured debt is one in which you sign an instrument (such as a mortgage, deed of trust, or land contract) that: Makes your ownership in a qualified home security for payment of the debt, Provides, in case of default, […]
The IRS may apply special per diem rates for Meals and Incidental Expenses (M&IE) to workers in the Transportation Industry if, during any single trip away from home, they travel to localities with differing federal M&IE rates. A Transportation Industry worker is defined as an employee or self-employed individual whose work is of the type […]
There are three main categories of income: active income, passive income, and portfolio income. “Passive income” does not include earnings from wages or active business participation, nor does it include income from dividends, interest or capital gains. For tax purposes, it is important to note that losses in passive income generally cannot offset active or […]
Payments received for being an executor of an estate are considered taxable income. The information below will help to determine if this income is subject to self-employment tax or not and where to enter it in your TaxAct® return. Per IRS Publication 559 Survivors, Executors, and Administrators, page 5: Fees Received by Personal Representatives All personal representatives must […]
For the TaxAct® programs, the income amount can be between $-999,999,999.99 and $999,999,999.99.
To delete a Form, Schedule, Document Received, or Worksheet from your TaxAct® Desktop return: From within your TaxAct Desktop return, click Forms in the options bar to view the Forms Explorer (if it is not already visible). Click Federal (or State) from the dropdown in forms explorer, then click any of the My Active Forms, […]
Per IRS Publication 907 Tax Highlights for Persons with Disabilities, page 3: Disability Pensions If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. You must report your taxable disability payments as wages on line 1 of Form 1040 or […]
A disposition is the permanent withdrawal of property from use in your trade or business or in the production of income. You can make a withdrawal by sale, exchange, retirement, abandonment, or destruction. You generally recognize gain or loss on the disposition of an asset by sale. However, nonrecognition rules can allow you to postpone […]
If you need to determine the adjusted basis of transferred property in a foreclosure or repossession (or the basis of any asset): Per IRS Publication 551 Basis of Assets, page 2: Basis is the amount of your investment in property for tax purposes. Use the basis of property to figure depreciation, amortization, depletion, and casualty […]
If you use your car for business purposes, you may be able to deduct car expenses. You generally can use one of the two following methods to figure your deductible expenses. Standard mileage rate Actual car expenses Per IRS Publication 463 Travel, Gift, and Car Expenses, page 15: Actual Car Expenses If you don’t use […]
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 employed in one of those occupations in 2021, use Form 2106 Employee Business Expenses to report travel, transportation, and entertainment expenses. To enter […]
Deductible fees related to home ownership are limited to home mortgage interest and certain real estate taxes, which are itemized deductions on Federal Schedule A (Form 1040) Itemized Deductions. As explained below, these deductible fees do not include Homeowners’ Assessment fees you pay to a Homeowner’s Association. Per IRS Publication 530 Tax Information for Homeowners, […]
There are special rules that apply only to Armed Forces reservists, government officials who are paid on a fee basis, performing artists, and disabled employees with impairment-related work expenses. Taxpayers who qualify under these special rules can claim unreimbursed employee expenses on Form 2106 Employee Business Expenses. These expenses can then be taken as an […]
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
The costs of home improvements are not deductible on the federal tax return, but are added to the cost basis of the home. You will use the cost basis to compute a gain or loss on the home at the time it is sold. Per IRS Publication 523 Selling Your Home, page 9: Improvements Improvements […]
There are two different Sale of Business Property documents supported by TaxAct® in the Federal Documents Received folder. The document you fill out depends on whether the asset had been previously depreciated in the TaxAct program. TaxAct currently supports the entry of 40 asset sales on the Sale of Business Property – Sale of Business […]
If you are married and your spouse is a nonresident alien without either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN), you may need to paper file your state return. Although the spouse’s SSN or ITIN may not be required on your federal return in certain situations (see IRS instructions below), […]
Per IRS Publication 17 Your Federal Income Tax (For Individuals), page 23: Nonresident alien spouse. You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during the year and you don’t choose to treat your nonresident spouse as a resident alien. However, your spouse isn’t a […]
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: […]
Your section 179 deduction is generally the cost of the qualifying property. However, the total amount you can elect to deduct under section 179 is subject to a dollar limit and a business income limit. Per IRS Publication 946 How to Depreciate Property, page 18: Sport Utility and Certain Other Vehicles You cannot elect to […]
Your section 179 deduction is generally the cost of the qualifying property. However, the total amount you can elect to deduct for the current year under section 179 is subject to a dollar limit and a business income limit. There may also be further limitations for certain vehicles (also called the “luxury” limits). However, as […]
The depreciation deduction, including the section 179 deduction, you can claim for a passenger automobile each year is limited. Go to IRS Publication 946 How to Depreciate Property, page 59, for more information on depreciation limits for vehicles. Note that any link in the information above is updated each year automatically and will take you […]
Per IRS Publication 946 How to Depreciate Property, page 15: You can elect to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you place the property in service. This is the section 179 deduction. You can elect the section 179 deduction instead […]
Per IRS Publication 334 Tax Guide for Small Businesses (For Individuals Who Use Schedule C), page 32: Methods for Deducting Car and Truck Expenses For local transportation or overnight travel by car or truck, you generally can use one of the following methods to figure your expenses. Standard mileage rate. Actual expenses. Standard mileage rate. […]
The general information in Form 1099-MISC Miscellaneous Income is not e-filed with the return (this includes the Payer’s information and the Recipient’s Identification Number). As this information is not e-filed, it will not cause any problems to leave the Payer’s name and Payer’s identification number fields blank (i.e. for situations where that information is unavailable […]
Although TaxAct® supports the individual tax return on Form 1040 U.S. Individual Income Tax Return and the reporting of Forms W-2 Wage and Tax Statement or Forms 1099 received, the program does not support the preparation and issuance of Form 1099-MISC Miscellaneous Income and the related reporting form (Form 1096 Annual Summary and Transmittal of […]
The TaxAct® program supports the entry of 100 Forms 1099-INT Interest Income. Form(s) 1099-INT is not transmitted electronically with your return; only the amounts which transfer to the Schedule B (Form 1040) Interest and Ordinary Dividends get transmitted. If Schedule B (Form 1040) is not required to be a part of the return, the total amount […]
The TaxAct® program supports the entry of 100 Forms 1099-DIV Dividends and Distributions. If you own all the stocks that are issuing dividends in one brokerage account, you normally will receive just one Form 1099-DIV that will summarize all of the year’s dividends. It will most likely list each payer, but you don’t need to list […]
If you have an amount in Box 11, Code A Other portfolio income (loss) of your Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc. with instructions to report the amount on Schedule E (Form 1040) Supplemental Income and Loss, Line 38, follow the instructions below to enter it in to the TaxAct® program: […]
Per IRS Schedule K-1 (Form 1041) Beneficiary’s Share of Income, Deductions, Credits, etc., on page 2: 14. Other information B Foreign taxes Report on Schedule 3 (Form 1040), line 1 or Sch. A, line 6 To enter the amount on Schedule 3 (Form 1040) Additional Credits and Payments, Line 1 in the TaxAct® program: From […]
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 15: Box 18. Tax-Exempt Income and Nondeductible Expenses Code A. Tax-exempt interest income. Report on your return, as an item of information, your share of the tax-exempt interest received or accrued by the […]
***NOTE. FAQ needs to be re-written to incorporate information about Forms K-2 and K-3.*** Per IRS Instructions for Form 1116 Foreign Tax Credit (Individual, Estate, or Trust), starting on page 5: Reporting Foreign Tax Information From Partnerships and S Corporations If you received a Schedule K-1 from a partnership or S corporation that includes foreign […]
If your Partnership Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc. has an amount in Box 13 (Code W) with instructions that state Form 1040 filers should enter the Box 13, Code W loss on Schedule E, Part II as a non-passive loss, follow these steps to enter that into the TaxAct […]
The IRS has requested that some information (like the Section 179 expense) be separated from the other income and expenses in order for the IRS to easily match Schedule K-1 information. They have requested us to enter Depreciation for Section 179 expenses on Part II of the Schedule E (Form 1040) Supplemental Income and Loss […]
Per IRS Instructions for Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc. (For Partner’s Use Only), on page 18 (for Box 20, Code V): Code V. Unrelated business taxable income. The partnership will report any information you need to figure unrelated business taxable income under section 512(a)(1) (but excluding any modifications required […]
An amount reported on a Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc. in Box 11, Code F shows items of income, gain, or loss not included in Boxes 1 through 10 or Box 11, Codes A through E. Code F may include various types of income or loss, and where it gets entered, if […]
Health Insurance Premiums for a more-than-2% shareholder of a S-Corporation are reported in Box 14 of the individual’s Form W-2 Wage and Tax Statement. If you need the amount reported in Box 14 of your W-2 to transfer to Line 16 of Schedule 1 (Form 1040) Additional Income and Adjustments to Income, and you received a Schedule K-1 (Form 1120-S) Shareholder’s Share of […]
The TaxAct® 1040 program supports the following number of Schedules K-1: 50 – Partnership Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc. 50 – S-Corp Schedule K-1 (Form 1120-S) Shareholder’s Share of Income, Deductions, Credits, etc. 8 – Estate Schedule K-1 (Form 1041) Beneficiary’s Share of Income, Deductions, Credits, etc. Note that […]
Losses Not Allowed in Prior Years Due to Basis Limitations (nonpassive): Enter your total prior year unallowed losses that are now deductible on a separate, line in Column (I) of Line 28. Do not combine these losses with, or net them against, any current year amounts from the partnership or S corporation. Enter “PYA” in […]
If you own property that you rent and report the income and expenses on Schedule E (Form 1040) Supplemental Income and Loss, you are not eligible to claim expenses for business use of your home. The IRS generally considers a property owner to be involved in a “passive” investment activity rather than an “active” income […]
The following information is provided to help clarify whether or not you need to file Form 1065 U.S. Return of Partnership Income. Per IRS Instructions for Form 1065 U.S. Return of Partnership Income, page 2: Partnership A partnership is the relationship between two or more persons who join to carry on a trade or business, […]
The TaxAct® program supports the entry of up to 48 rental properties on Schedule E (Form 1040) Supplemental Income and Loss in a return. If you have more than 48 properties to report, the following workaround will enable you to accomplish that (please note, you would be required to paper file the return): Complete the […]
On Schedule D (Form 1040) Capital Gains and Losses, you may enter amounts of up to nine digits for such items as cost basis, sales proceeds, or gain or loss in the TaxAct program.
Per IRS Instructions for Form 1040 and 1040-SR, on page 30: Line 7 Capital Gain or (Loss) If you sold a capital asset, such as a stock or bond, you must complete and attach Form 8949 and Schedule D. Exception 1. You don’t have to file Form 8949 or Schedule D if you aren’t deferring […]
The TaxAct® program provides nine lines for entry of Other Expenses in Part V of Schedule C (Form 1040) Profit or Loss from Business because the IRS only provides nine such lines on the Schedule C (Form 1040) they release. If you need to enter more than nine Other Expenses, your options are: Consolidate some […]
Page 2 of Schedule C (Form 1040) Profit or Loss From Business is only printed if IRS-required information is included. Page 2 of Schedule C does not print if there are no relevant entries for that page, and Page 2 will not print without Page 1. You can print a blank copy of Schedule C […]
While the IRS Closing a Business video mentions marking a Schedule C (Form 1040) Profit or Loss From Business as a “Final Return” in the space at the top of the last Schedule C filed for a business, they do not require this or actually use it in any way. It would only be for […]
The Small Business and Work Opportunity Act of 2007, signed into law on May 25, 2007, created a provision which changed the treatment of qualified joint ventures of married couples not treated as partnerships. The provision generally permits a qualified joint venture whose only members are spouses filing a joint return not to be treated […]
In IRS Publication 538 Accounting Periods and Methods, there is a section regarding Inventories starting on page 13. Page 15 is regarding the valuing of inventory: Valuing Inventory The value of your inventory is a major factor in figuring your taxable income. The method you use to value the inventory is very important. The following […]
When more than one vehicle is listed for Schedule C (Form 1040) Profit or Loss From Business, the vehicle information will transfer to Form 4562 Depreciation and Amortization instead of Part IV of Schedule C. The vehicle information will also transfer to Form 4562 when another asset entered on the return creates the need for […]
The TaxAct® program does not support filing Schedule C (Form 1040) Profit or Loss From Business for those who are not a material participant in their Schedule C business. Users are not allowed to check “No” on Line G Did you “materially participate” in the operation of this business during the current tax year?. Therefore, TaxAct […]
If your California return is rejected due to a mismatch of the AGI and PIN information, you still have the opportunity to make changes to get the return accepted. To correct the California rejection for your AGI/PIN mismatch, you have two options: Option 1: You may contact the California Franchise Tax Board (FTB) at 1-800-852-5711 […]
Credit card refund processing time for a TaxAct product vary from 3 to 10 business days depending on your credit card company or banking institution. TaxAct processes refunds for our TaxAct products immediately, but processing time varies between credit card companies and banking institutions. Contact your credit card company or bank to determine when you […]
Some states allow for the submission of “scannable” tax returns. This means that, in addition to a printed return, the state will also use returns that can be scanned by a computer. They scan the form with a machine that can read the line numbers and values faster than a human can type them into […]
Many states require income tax returns to incorporate two-dimensional (2D) barcodes on forms. These 2D barcodes contain more information than conventional barcodes you see on retail packages. Conventional barcodes get wider as more data is encoded, while 2D barcodes make use of the vertical dimension for data. These barcodes contain all pertinent tax information from […]
Bank products are services that tax preparers can offer to their clients. Cash Advances are loan products for taxpayers that are secured by their tax refund. With an Easy Advance from Republic Bank or a Fast Cash Advance from Santa Barbara TPG, you can provide a loan to your customers before e-file starts. The TaxAct […]
Once the IRS accepts an electronically filed TaxAct return, they provide no further information to TaxAct regarding the issuance date of any refund. However, there are a few ways to check on the status of a refund. Federal E-Filing Status From within your TaxAct Professional Edition program, click Preparer in the options bar and select […]
TaxAct offers professional preparers the option to electronically file client returns in batches. To do this, you can choose to submit your client returns later, then E-file the client returns all at once. To save a return for later: From within your TaxAct Professional Edition program, Double-click the client return you want to save for […]
To toggle the Refund/Owe indicator on or off in your TaxAct Professional program: From within your TaxAct Professional Edition program, click Preparer in the upper menu bar, then click Preferences. Click Miscellaneous, then scroll down to the Miscellaneous section. Make sure the checkbox next to Show the refund/owe indicator (when applicable) is checked (click the […]
To add state(s) to each new or imported client return in your TaxAct Professional program: From within your TaxAct Professional Edition program, click Preparer in the upper menu bar, then click Preferences. Click Miscellaneous, scroll down to the Miscellaneous section, then click the Checkbox next to Automatically attach selected states with new or imported returns. Click Select States, then […]
To auto-complete Form W-2 Wage and Tax Statement boxes based on income related entries: From within your TaxAct Professional Edition program, click Preparer in the upper menu bar. Now hover your mouse over Master Information, and click General. Scroll down to the Calculation Options section, and you can click the Checkbox next to the options relating to […]
The problem you are having is likely due to changes that affect your Internet connection for secure transmissions. These settings can be changed by updates to Windows. To check your TLS (transport layer security) settings: Close the TaxAct program or webpage. In the taskbar at the bottom of your computer screen, click in the field […]
When an S Corporation dissolves, terminates, or ceases operations, a final tax return generally must be filed by the 15th day of the third month after the date it dissolved. While the instructions for the 2025 Form 1120-S U.S. Income Tax Return for an S Corporation state the form can be used when filing a short […]
You may file a fiscal year or short year return using the TaxAct 1120-S program. The IRS allows e-filing of short-year returns if it is the corporation’s first year or final year; otherwise, a paper return must be filed. The corporation’s start date must be in the same year as the TaxAct program. For example, for a […]
As explained in the following IRS instructions, the IRS may make adjustments to an individual return if they determine that reasonable compensation was not paid (and reflected on a Form W-2 Wage and Tax Statement issued by the S-Corporation), for services rendered or capital furnished to the corporation. This is outlined in the Internal Revenue Code Section 1366(e). This […]
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. Generally, the S-corporation reimburses the employee for vehicle expenses incurred when using their personal vehicle for company purposes. Corporate employers may not use the standard mileage rate to compute the vehicle […]
Section L of Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc. will not print if, based on your entries, Schedules L, M-1, and M-2 are not required. Generally, this means Yes is checked on Schedule B, Line 6. To have these schedules (and Schedule K-1, Section L) printed with the return: From within […]
The TaxAct® program supports up to 99 Schedules K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc. in a 1065 return.
Section 179 deduction is not included with depreciation on Form 1065 U.S. Return of Partnership Income. Section 179 deduction is a flow-through item and is reported on Schedule K and allocated to each partner in Box 12 of their Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc. The partner then reports the […]
Use the following table guide to help you enter your information from Form 1099-DIV Dividends and Distributions to Form 1120 U.S. Corporation Income Tax Return in the TaxAct program. Note. The numbers listed correspond to the box numbers on Form 1099-DIV. 1a Total ordinary dividends Enter on the appropriate line on Form 1120, Page 2-Schedule C. 1b Qualified […]
The TaxAct® program does not support Federal Form 851 Affiliations Schedule for the 1120 program so it is not possible to check Box 1 Consolidated Return (Attach Form 851) on Page 1 of Form 1120 U.S. Corporation Income Tax Return. We appreciate customers’ comments and suggestions as we use these to help determine ways to enhance […]
Since resident and nonresident aliens are taxed differently, it is important for you to determine your status. You are considered a nonresident alien for any period that you are neither a United States citizen nor a United States resident alien. Determining Residency You are considered a resident alien if you met one of two tests […]
If you reside in Massachusetts, and have made contributions to certain, state-approved retirement accounts, you may be able to deduct the amount of some or all of those contributions on your tax return. You can use TaxAct to claim deductions for state-approved retirement contributions in Massachusetts. Learn more about tax-deductible retirement-plan contributions for Massachusetts residents. […]
Interest that qualifies as Massachusetts bank interest may be exempt up to $100, or $200 for married taxpayers filing jointly. Massachusetts bank interest includes total amount of interest received or credited to deposit accounts (term and time deposits, including certificates of deposit, savings accounts, savings shares, and NOW accounts.) To edit the amount of interest […]
If you reside in Massachusetts and have incurred certain commuting expenses (such as tolls and mass-transit passes) over the current tax year, you may be able to deduct some of those expenses from your taxes. You can use TaxAct to claim the Massachusetts Commuter Tax Deduction. Learn more about the Massachusetts Commuter Tax Deduction. To […]
If you need to file both resident and non-resident returns for New Jersey, please follow the instructions below. Select which New Jersey form (full-year/part-year) you want to e-file with the state of New Jersey. Complete the first return and e-file with the state of New Jersey. (Be sure to print copies of this return) You will […]
Per the instructions the State of New Jersey provides to software developers, the TaxAct program pulls state wages from all of the taxpayer’s Forms W-2 Wage and Tax Statement for Line 15 of Form NJ-1040. Per the New Jersey instructions for individuals, this figure may need to be adjusted for Forms W-2 received from employment outside […]
TaxAct® business products have supported fiscal and short year depreciation calculations since the 2012 tax year. Go to our TaxAct Business Editions webpage to view our business products.
If the business filed Form 2553 Election by a Small Business Corporation, the business would have to revoke (or terminate) this election for it to no longer be effective (once the IRS approves the revocation). A business should continue filing as an S Corporation until a termination of the election is made and approved by […]
Expenses up to $50 per month can be deducted for a child living with you from a Student Exchange Program. Per IRS Publication 526 Charitable Contributions, page 5: Expenses Paid for Student Living With You You may be able to deduct some expenses of having a student live with you. You can deduct qualifying expenses […]
With certain types of property, it may be beneficial for the taxpayer to capitalize expenses rather than to deduct those expenses. If the election is made, the taxpayer would not report any of the expenses on their tax return. Instead, the taxpayer will adjust their cost basis in the property. If eligible to make an […]
You can deduct impairment-related work expenses of persons with disabilities as miscellaneous itemized deductions. They are not subject to the 2% limit. Per IRS Publication 529 Miscellaneous Deductions, page 3: Employee with impairment-related work expenses. Impairment-related work expenses are the allowable expenses of an individual with physical or mental disabilities for attendant care at his or […]
If you are unable to deduct charitable contributions due to the AGI limitations in the current tax year, you may be able to carry forward the excess amounts to future years. Per IRS Publication 526 Charitable Contributions, page 19: Carryovers You can carry over any contributions you can’t deduct in the current year because they […]
Per IRS Publication 502 Medical and Dental Expenses (Including the Health Coverage Tax Credit), page 5: Alcoholism You can include in medical expenses amounts you pay for an inpatient’s treatment at a therapeutic center for alcohol addiction. This includes meals and lodging provided by the center during treatment. You can also include in medical expenses […]
Membership fees generally would not be deductible because a benefit is received in return for the fee. The deductible portion, if any, would be the excess of the fee over the value of the benefits received. The same applies to tickets purchased since an entertainment benefit is received. The deductible portion would be the amount […]
When you bought your home, you may have paid settlement fees or closing costs in addition to the contract price of the property. Generally speaking, closing costs are not allowable as a deduction on your return. They are an increase in your basis or cost of the property to you. When you sell the property […]
A charitable contribution is a donation or gift to, or for the use of, a qualified organization. Per IRS Publication 526 Charitable Contributions, page 2: Organizations That Qualify To Receive Deductible Contributions You can deduct your contributions only if you make them to a qualified organization. How to check whether an organization can receive deductible […]
You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. These costs are personal commuting expenses. You cannot deduct commuting expenses no matter how far your home is from your regular place of work. You cannot […]
If an individual has multiple foreign employers, all foreign earned income (for that individual taxpayer) would be combined on to one Form 2555 Foreign Earned Income. The IRS only allows two Forms 2555 to be filed per return (one for the taxpayer and one for the spouse). This is because completing more than one Form […]
The TaxAct® calculation of Line 3e Gross income from all sources of Federal Form 1116 Foreign Tax Credit is not necessarily the same amount as reflected on Line 6 of Federal Form 1040 U.S. Individual Income Tax Return. This is because only gross amounts are taken into consideration (before subtracting losses and deductions). For example, […]
When there are multiple entries coming from separate Forms 1099-DIV Dividends and Distributions in a return, all the entries are consolidated into one single column on Form 1116 Foreign Tax Credit. In the IRS Instructions for Form 1116, starting on page 8, are instructions that apply. When there are Qualified Dividends or Capital Gain Distributions […]
If you received a foreign pension, you first must determine whether the foreign pension is taxable. TaxAct® has no process to determine this; please review the following IRS links to make this determination: United States Income Tax Treaties – A to Z Publication 901 U.S. Tax Treaties Publication 54 Tax Guide for U.S. Citizens and […]
Per IRS Publication 54 Tax Guide for U.S. Citizens and Resident Aliens Abroad, page 22: Foreign Housing Exclusion and Deduction In addition to the foreign earned income exclusion, you can also claim an exclusion or a deduction from gross income for your housing amount if your tax home is in a foreign country and you […]
Per IRS Publication 502 Medical and Dental Expenses (Including the Health Coverage Tax Credit), page 2: Introduction Medical expenses include dental expenses, and in this publication the term “medical expenses” is often used to refer to medical and dental expenses. Page 15: Flexible Spending Arrangement You can’t include in medical expenses amounts for which you […]
The IRS does not specifically state whether expenses for the care of an Alzheimer’s patient are deductible, but they do provide information on how to make such a determination. The primary factor is whether the lodging is essential for medical care. This can vary depending on the individual circumstances (i.e. how far an individual’s Alzheimer’s […]
Mortgage interest may be deducted on a timeshare loan. The interest is deductible only if the loan is secured by the timeshare as a mortgage. Per IRS Publication 936 Home Mortgage Interest Deduction, page 4: Time-sharing arrangements. You can treat a home you own under a time-sharing plan as a qualified home if it meets […]
Per IRS Publication 502 Medical and Dental Expenses (Including the Health Coverage Tax Credit), page 6: Capital Expenses You can include in medical expenses amounts you pay for special equipment installed in a home, or for improvements, if their main purpose is medical care for you, your spouse, or your dependent. The cost of permanent […]
Per IRS Publication 502 Medical and Dental Expenses (Including the Health Coverage Tax Credit), page 7: Car You can include in medical expenses the cost of special hand controls and other special equipment installed in a car for the use of a person with a disability. Special design. You can include in medical expenses the […]
TaxAct® currently supports the entry of up to 50 copies of Form 1098-T Tuition Statement. 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.
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. See IRS Publication 970, Tax Benefits for Education, for more information. A scholarship or fellowship grant is tax free only to the extent: It doesn’t exceed your qualified education […]
The amount of child care expenses you can take (or have on your Form W-2 Wage and Tax Statement) is limited to the lower of your (or your spouse’s, if applicable) earned income. Per IRS Publication 503 Child and Dependent Care Expenses, page 11: Earned Income Limit The amount of work-related expenses you use to […]
Per IRS Instructions for Form 2441 Child and Dependent Care Expenses, page 1: Married persons filing separately checkbox. Generally, married persons must file a joint return to claim the credit. If you claim the credit and your filing status is married filing separately, you are required to show you meet the special requirements listed in […]
When completing the Child and Dependent Care Expenses form, you are required to supply the care provider’s identification number. If you are living abroad, your care provider may not have or be required to have a U.S. taxpayer identification number. Per IRS Publication 503 Child and Dependent Care Expenses, page 10: U.S. citizens and resident […]
Per IRS Publication 503 Child and Dependent Care Expenses, page 2: Dependent care benefits. If you received any dependent care benefits from your employer during the year, you may be able to exclude all or part of them from your income. You must complete Form 2441, Part III, before you can figure the amount of […]
Per IRS Instructions for Form 2441 Child and Dependent Care Expenses, page 3: Column (c) If the care provider is an individual, enter his or her SSN. Otherwise, enter the provider’s employer identification number (EIN). If the provider is a tax-exempt organization, enter “Tax-Exempt” in column (c). U.S. citizens and resident aliens living abroad. If […]
General Limits: In figuring the Child and Dependent Care credit, take into account qualifying expenses up to a limit of $3,000 for one dependent, or $6,000 for two or more dependents. The $3,000 or $6,000 limit applies even if your actual expenses are much greater. This $3,000 or $6,000 limit must be reduced by tax-free […]
Since one of the tests to claim the child and dependent care credit on your return is that you must pay child and dependent care expenses so you (and your spouse if filing jointly) can work or look for work (i.e. the Work-Related Expense Test). If the expense is not considered “work-related,” you are not […]
Per IRS Publication 503 Child and Dependent Care Expenses, page 4: You Must Have Earned Income To claim the credit, you (and your spouse if filing jointly) must have earned income during the year. Earned income. Earned income includes wages, salaries, tips, other taxable employee compensation, and net earnings from self-employment. A net loss from […]
The TaxAct scheduled release dates for the individual state returns depend upon when each state publishes its final tax forms. We have developed the tax software for each state, but must first ensure that it corresponds with the official forms. This is the case for all tax software companies. Go to our State Program Release Dates […]
Per the IRS Individuals Living or Working in U.S. Territories/Possessions webpage: An individual who has income from American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI), Guam, Puerto Rico or the U.S. Virgin Islands will usually have to file a tax return with the tax department of one of these territories. In some situations, […]
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 optional sales tax […]
Every fourth year (i.e. 2016, 2020, 2024) is a Leap Year and the calculation for the Sales Tax Deduction contains a factor in the calculation for the number of days lived in the State. In these years, if you adjust the days entered in this field to “366” (the number of days in a leap-year) […]
TaxAct calculates the Standard Deduction Worksheet for Dependents, but there is not a viewable worksheet within the program. You can find this worksheet displayed as Table 21-3 on page 157 of IRS Publication 17 Your Federal Income Tax For Individuals. Note that any link in the information above is updated each year automatically and will […]
If you are claimed as a dependent on another return, you cannot use the Optional State and Certain Local Sales Tax Tables for calculating an itemized deduction for General Sales Taxes on Line 5 of Schedule A (Form 1040) Itemized Deductions. You would be eligible to claim the actual state and local general sales tax […]
Per IRS Publication 936 Home Mortgage Interest Deduction, page 4: Qualified Home For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that […]
Beginning in 2009, the spouse of a servicemember is no longer required to release their residency of the servicemember’s domicile state. This means that if the couple was domiciled in State A and then moved (due to the servicemember’s military orders) to State B, the spouse can now elect (subject to state instructions, which do […]
Go to the IRS Publications webpage for a numerical list of IRS publications (current and past), available in both PDF and HTML formats. 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 […]
Go to the IRS Contact Your Local IRS Office webpage for a list of addresses and telephone numbers for the local IRS offices in your state. 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 […]
Taxpayers may download forms and publications from the IRS Tax Forms and Publications webpage or may order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040. Note that any link in the information above is updated each year automatically and will take you to the most recent version of […]
The wage brackets for income tax withholding are outlined by the IRS in Publication 15-T Federal Income Tax Withholding Methods (this publication is released early each calendar year). 1. Percentage Method Tables for Automated Payroll Systems If you have an automated payroll system, use the worksheet below and the Percentage Method tables that follow to […]
Per the IRS Issues for Firefighters webpage: Firefighters This discussion addresses some of the common questions we receive from firefighters and their employing organizations. Compensation Generally, tax laws apply to firefighters in the same manner as for other types of workers. It does not matter whether firefighters are termed “volunteers”, are considered employees, or are […]
Per IRS Publication 907 Tax Highlights for Persons with Disabilities, page 4: VA disability benefits. Don’t include disability benefits you receive from the Department of Veterans Affairs (VA) in your gross income. If you are a military retiree and don’t receive your disability benefits from the VA, see Pub. 525 for more information. Don’t include […]
There are federal income tax rules that apply to civil service retirement benefits received by retired federal employees (including those disabled) or their survivors. The Thrift Savings Plan (TSP) provides federal employees with the same savings and tax benefits that many private employers offer their employees. This plan is similar to private sector 401(k) plans. […]
To determine whether you are traveling away from home, you must first determine the location of your tax home. Per IRS Publication 463 Travel, Gift, and Car Expenses, page 3: Tax Home To determine whether you are traveling away from home, you must first determine the location of your tax home. Generally, your tax home […]
IRS U.S. Tax Code, Regulations and Official Guidance webpage instructions to search the Internal Revenue Code: If you know the section number, click Go in the middle column of the Internal Revenue Code table (under the “Retrieve by section number” heading). You can either perform a Quick Search by entering “26” for the Title, then entering the […]
Generally, you must include in gross income everything you receive in payment for personal services. Per IRS Publication 525 Taxable and Nontaxable Income, page 4: Severance pay. You must include in income amounts you receive as severance pay and any payment for the cancellation of your employment contract. Note that any link in the information […]
A “short sale” is when a home is sold for less than the amount still owed on the mortgage and an attempt is made to get the lender to forgive the unpaid balance. If you received a Form 1099-C Cancellation of Debt, this income may qualify to be excluded on your tax return if it […]
To report the Form W-2 you received in the TaxAct program, go to our Instructions to Enter Form W-2 Information FAQ. Per IRS Publication 525 Taxable and Nontaxable Income, page 12: Tax form. If you have income from the exercise of nonstatutory stock options, your employer should report the amount to you inbox 12 of […]
To determine the gain or loss on the sale of your home, there is a worksheet in TaxAct. However, TaxAct supports only one sale of home worksheet. If you have another home sale for the same tax year, you will need to go through the worksheet calculations manually to determine the amount of gain or […]
The amount realized on the sale of your home is the selling price minus selling expenses. Per IRS Publication 523 Selling Your Home, page 12: 2. Determine your selling expenses. These are the costs directly associated with selling your home. Any sales commissions (for example, a real estate agent’s sales commission) . Any advertising fees […]
**The information below has not been verified for the 2023 tax year as the IRS Pub. 550 has not yet been released by the IRS.** A “put option” is the right to sell to the writer, at any time before a specified future date, a stated number of shares at a specified price. Conversely, a […]
**The information below has not been verified for the 2023 tax year as the IRS Pub. 550 has not yet been released by the IRS.** A stock split will affect your number of shares and your basis in each share. To determine your new basis per share, you would divide your total adjusted basis of […]
If you sell a vehicle for which the Standard Mileage rate was used for deduction purposes in your business, there is a depreciation adjustment that must be made when accounting for the sale on your tax return. Because depreciation expense was already included in the Standard Mileage rate (the IRS figures it into the calculation […]
The number of assets which TaxAct supports is as follows: TaxAct supports 1,000 MACRS assets and 1,000 ACRS assets (ACRS assets are pre-1987 assets, such as residential rental property). TaxAct supports up to eight Schedule Cs for e-filing. The number of depreciable assets on Schedule C (Form 1040) Profit or Loss From Business are not […]
Per IRS Publication 946 How to Depreciate Property, page 7: Retired From Service You stop depreciating property when you retire it from service, even if you have not fully recovered its cost or other basis. You retire property from service when you permanently withdraw it from use in a trade or business or from use […]
Per IRS Instructions for Form 8275 Disclosure Statement: Purpose of Form Form 8275 is used by taxpayers and tax return preparers to disclose items or positions, except those taken contrary to a regulation, that are not otherwise adequately disclosed on a tax return to avoid certain penalties. The form is filed to avoid the portions […]
While going through the Alerts in the program, if you see the Red Alert Error or Omission: Missing Information, it may relate to entering a donated property item on Form 8283 Noncash Charitable Contributions for an amount greater than $500 and not completing Part I, Line 1, Column G for the Donor’s Cost or Adjusted […]
TaxAct participates in the IRS Free-File Alliance and abides by all IRS Security and Privacy standards. IRS Publication 1345, Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns, specifically describes the standards for e-file security and privacy and details the requirement for external vulnerability scans starting on page 9. The Handbook states: External […]
IRS Publication 1345 Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns, provides rules and requirements for participation in IRS e-file by Authorized IRS e-file Providers filing individual income tax returns and related forms and schedules. Related Links IRS E-file for Tax Professionals IRS Modernized e-File (MeF) Program Information Note that any link […]
As you go through the electronic filing process for your clients, you will see information regarding the regulations under Internal Revenue Code Section 7216 Disclosure of Use of Tax Information by Preparers of Returns, which you are required to follow. Per IRS Section 7216 Frequently Asked Questions: A8 A taxpayer must provide written consent before a tax […]
Various functions for the TaxAct Professional Editions are toggled on and off through the Preparer Preferences dialog box: From within your TaxAct Professional Edition program, click Preparer in the upper menu bar. Click Preferences, then click Miscellaneous, to control the following: Client Manager Display Settings Show preview of selected client information Show only the last […]
Form 9325, Acknowledgement and General Information for Taxpayers Who File Returns Electronically can be used to convey information to customers by an Electronic Return Originator (ERO), and would be completed by the ERO as the filer of the return. At the bottom, this form states: “Note: EROs can use the Acknowledgement File information, translated by […]
Donation Assistant is not available in TaxAct Professional Editions. We appreciate customers’ comments and suggestions as we use these to help determine ways to enhance TaxAct programs each year. A compilation of these comments and suggestions are maintained every season and are reviewed prior to the start of development for the following year’s product. Please […]
The Centralized Authorization File (CAF) number is a 9-digit number assigned to individuals based on the filing of Form 2848, Power of Attorney and Declaration of Representative. Per IRS Instructions for Form 2848 Power of Attorney and Declaration of Representative, on page 4: Line 2. Representative(s) Enter the full name and mailing address of your […]
When you check for (and run) updates for your TaxAct Professional program, any client returns affected will automatically be updated. When the update is complete, you’ll be prompted to view the Update Summary Report to review which client returns changed due to the update. The steps below allow you to view that report at a […]
To print organizers for your client(s): From within your TaxAct Professional Edition program, click Preparer in the upper menu bar, then click Print Organizers. Click the Checkbox next to the client(s) you want to print organizers for, then click the Circle next to Print Applicable Organizers (or Print Selected Organizers if you only want to print […]
To access professional tax materials compatible with the TaxAct program, visit TaxAct Professional Resources. Visit Nelco Office Supplies to access information about obtaining folders, envelopes, and covers for your clients’ tax returns.
Per IRS Publication 3112 IRS e-file Application and Participation, on page 14: Registration of Websites with the IRS To safeguard taxpayer information, the IRS requires Providers to register with the IRS all websites that collects taxpayer information, either directly or through third parties, and used by the Provider for federal returns that are filed electronically. […]
To print your name in the Paid Preparer’s signature box: From within your TaxAct Professional Edition program, click Preparer in the upper menu bar. Hover your mouse over Master Information, then click General. Under Filing/Printing Options, click the box next to Print the preparer’s name in the Preparer’s Signature Field. Some states allow the software […]
If you had to repay any unemployment compensation (note the method would be similar for repaying any nonbusiness income) in 2024 which you received in 2024, subtract the amount you repaid from the total amount you received and enter the difference on your return. On the dotted line next to your entry, enter “Repaid” and […]
Per IRS Publication 936 Home Mortgage Interest Deduction, page 5: Reverse mortgages. A reverse mortgage is a loan where the lender pays you (in a lump sum, a monthly advance, a line of credit, or a combination of all three) while you continue to live in your home. With a reverse mortgage, you retain title […]
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 (typically April 15) are considered filed on the due date of the return (here are some exceptions to this rule). For more information, go to our Record Retention – […]
Per IRS Instructions for Form 1040 and 1040-SR: Rounding Off to Whole Dollars You can round off cents to whole dollars on your return and schedules. Any amounts under $.50 would be rounded down to the nearest dollar. Amounts that are $.50 and over are rounded up to the nearest dollar. If you have to […]
TaxAct Online Editions update automatically, so you will always have the latest version of the software. TaxAct Desktop Editions must be updated manually, so you may need to check to see if you are running the latest version. To check the version of your TaxAct federal or state program: From within your TaxAct desktop program, […]
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 code exception to taxation or if any amount […]
An offer in compromise (offer) is an agreement between you (the taxpayer) and the IRS that settles a tax debt for less than the full amount owed. The offer program provides eligible taxpayers with a path toward paying off their debt and getting a “fresh start.” The ultimate goal is a compromise that suits the […]
Information regarding the applicable depreciation methods for each classification of property is listed below. Refer to IRS Instructions for Form 4562 Depreciation and Amortization (Including Information on Listed Property) and IRS Publication 946 How To Depreciate Property for additional information. 3-, 5-, 7-, and 10-year property – the applicable method is generally the 200% Declining […]
Listed Property generally refers to property that could be used for personal and business purposes. For listed property, the business use must be over 50% for the taxpayer to claim the Section 179 expense or the accelerated depreciation, MACRS. In TaxAct, the “business-use percentage” dictates whether or not property is considered listed property: 100% business […]
Modified Accelerated Cost Recovery System (MACRS) is the method of depreciation used to expense the cost of most property placed in service after 1986. Under MACRS, the cost of qualified property is expensed over predetermined periods. For more information, go to IRS Instructions for Form 4562 Depreciation and Amortization (Including Information on Listed Property) and […]
Certain property cannot be depreciated. This includes land and certain excepted property. Per IRS Publication 946 How To Depreciate Property, page 6: Excepted Property Even if the requirements explained in the preceding discussions are met, you cannot depreciate the following property. Property placed in service and disposed of in the same year. Determining when property […]
Per IRS Publication 946 How to Depreciate Property, page 3: Overview of Depreciation – Introduction Depreciation is an annual income tax deduction that allows you to recover the cost or other basis of certain property over the time you use the property. It is an allowance for the wear and tear, deterioration, or obsolescence of […]
You can only import one prior year return into your TaxAct current year return. If you are now married and filing jointly, you can import the prior year return for the spouse with the most complex tax information, and manually enter the information for the other spouse. Related Links Import Last Year’s Return Filing Status […]
Life insurance proceeds paid to you because of the death of the insured generally aren’t subject to federal income tax unless the policy was transferred to you for valuable consideration. This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. However, any interest earned on […]
The mailing address for Form 8453 U.S. Individual Income Tax Transmittal for an IRS e-file Return: Internal Revenue Service Attn: Shipping and Receiving, 0254 Receipt and Control Branch Austin, TX 73344-0254
The format of all forms that print with a return in the TaxAct program have been approved by the IRS and each State. The printing of the forms are correct and will be accepted for your return.
Per the IRS Individual Taxpayer Identification Number (ITIN) Reminders for Tax Professionals webpage: Tax returns filed with an Individual Taxpayer Identification Number reporting wages paid are required to show the Social Security Number under which the wages were earned. This creates an identification number (ITIN/SSN) mismatch. In the past, returns with this mismatch could only […]
TaxAct supports entering an address up to 35 characters on Federal Form 1040 U.S. Individual Income Tax Return, as that is the number of characters allowed for e-filing by the IRS. If you e-file your return, you will need to abbreviate some parts of the address if it exceeds 35 characters in length. If you […]
The amount that appears on Line 1 of Schedule 1 (Form 1040) Additional Income and Adjustments to Income is entered by the taxpayer from the information on a Form 1099-G Certain Government Payments or similar statement. There are situations where taxpayers must go to IRS Publication 525 Taxable and Nontaxable Income and manually calculate their […]
If your employer provided more than $50,000 of group-term life insurance coverage during the year, the amount included in your income is reported as wages in Box 1 of Form W-2. Also, it is shown separately in Box 12 as code “C.” Box 12 will also show the amount of uncollected Social Security and Medicare […]
Per IRS Publication 929 Tax Rules for Children and Dependents, page 9: Part 2. Tax on Unearned Income of Certain Children The two rules that follow may affect the tax on the unearned income of certain children. If the child’s interest and dividend income (including capital gain distributions) total less than $11,000, the child’s parent […]
There are many things to consider when determining if you have provided more than half of a person’s support during the year, and if they are a qualifying relative. Below is a link and information from IRS Publication 17 to help you make this determination. Per IRS Publication 17 Your Federal Income Tax (For Individuals), […]
Whether you can claim your child as a dependent, if your ex-spouse did not, is based on who the custodial parent is and whose qualifying child the child is determined to be for that year according to the IRS rules. The following information will help determine who can: take the child tax credit, use the […]
Under the tax law, one spouse is not considered a dependent of the other. If you’re divorced or legally separated during the year, your former spouse cannot be your qualifying relative even if he or she is a member of your household for the whole year.
While an adopted child is considered to be your child for tax purposes, you should only enter the number of months the child actually lived with you in the first year of adoption for purposes of calculating credits, etc. Although the child may not qualify to be your “qualifying child” in the first year of […]
Per IRS Publication 17 Your Federal Income Tax (For Individuals), page 74: Child support payments. You shouldn’t report these payments on your return. See Pub. 504 for more information. Per IRS Publication 504 Divorced or Separated Individuals, page 14: Child support. To determine whether a payment is child support, see the discussion under Certain Rules […]
Per IRS Publication 17 Your Federal Income Tax, page 29: Residency Test To meet this test, your child must have lived with you for more than half the year. There are exceptions for temporary absences, children who were born or died during the year, kidnapped children, and children of divorced or separated parents. Temporary absences. […]
The TaxAct program does not provide Alerts regarding the limits on deferred income as there are many situations where the limits may vary. This is outlined in detail in IRS Publication 525 Taxable and Nontaxable Income. Your employer or plan administrator should apply the proper annual limit when figuring your plan contributions; however, you are […]
The IRS instructions for Form W-4 Employee’s Withholding Certificate to calculate your allowances does not account for all possible situations. See the IRS information below relating to withholding. Per IRS Publication 505 Tax Withholding and Estimated Tax, page 5: Getting the Right Amount of Tax Withheld In most situations, the tax withheld from your pay will […]
The TaxAct program supports the entry of 150 copies of Forms W-2G for Gambling Winnings. If you have more than 150 Forms W-2G, you need to enter the total amount into your return and paper-file the return so you can attach copies of each Form W-2G that you received. While you can e-file the return by […]
Use Form W-4P Withholding Certificate for Pension or Annuity Payments to tell payers the correct amount of federal income tax to withhold from your pension and annuity payments(s). Form W-4P is not available in the TaxAct program, but the form can be filled in at the IRS website, printed, and then mailed to each payer. […]
The TaxAct program does not directly support Form W-4 Employee’s Withholding Certificate. We recommend using the IRS Withholding Estimator tool. It’s capable of generating a pre-populated Form W-4 that can be filed with an employer. For more information, visit the IRS Tax Withholding Estimator webpage. Note that any link in the information above is updated each […]
If you have state or local withholdings for more than eight states, you will need to create another Form W-2 Wage and Tax Statement in the TaxAct program to enter the additional state and or local withholdings. Be sure to select the state and locality from the drop-downs for Boxes 15 and 20 again. You will not be […]
Not Material Participant on Schedule F Profit or Loss from Farming Unfortunately, the TaxAct program does not support this situation. Users are unable to check No on Line E Did you “materially participate” in the operation of this business during the current tax year? in Federal Schedule F (Form 1040) Profit or Loss From Farming. Therefore, TaxAct […]
According to the IRS, if you are self-employed, your business income is the amount of your gross income less expenses. In determining earned income for purposes of the EIC, if you have a net loss from your self-employment activities (i.e., sole proprietorship or partnership interest), then you would reduce your earned income by the overall […]
Your child must be under 17 at the end of the tax year in order to qualify for the Child Tax Credit. Per IRS Publication 17 Your Federal Income Tax, page 108: Qualifying Child for the CTC A child qualifies you for the CTC if the child meets all of the following conditions. The […]
Employee Stock Purchase Plan (ESPP) You will need to review the information you received on Form W-2 Wage and Tax Statement and/or Form 1099-B Proceeds From Broker and Barter Exchange Transactions before making your entries into the program. Outlined below is a series of steps you will need to review before entering your stock transaction […]
Your actual adjusted basis may be different from what is reported on Form 1099-B Proceeds From Broker and Barter Exchange Transactions. Per IRS Publication 550 Investment Income and Expenses (Including Capital Gains and Losses), page 40: Stocks and Bonds The basis of stocks or bonds you own is generally the purchase price plus the costs […]
If you used an accelerated method of depreciation, any gain you have on the sale attributable to this depreciation must be recaptured and reported as ordinary income. If you used straight-line depreciation, you may not have to report any recapture as ordinary income, but any gain computed would be considered capital gain income. You must […]
Per IRS Publication 550 Investment Income and Expenses (Including Capital Gains and Losses), page 48: Capital or Ordinary Gain or Loss If you have a taxable gain or a deductible loss from a transaction, it may be either a capital gain or loss or an ordinary gain or loss, depending on the circumstances. Generally, a […]
Capital gains and losses are reported on Form 8949 Sales and Other Dispositions of Capital Assets and Schedule D (Form 1040) Capital Gains and Losses. For more information regarding capital gains and losses, go to: Publication 550 Investment Income and Expenses (Including Capital Gains and Losses) Publication 551 Basis of Assets ADJUSTED BASIS: Before you […]
Nonbusiness bad debts are deducted as short-term capital losses on Federal Schedule D (Form 1040) Capital Gains and Losses. You may claim a loss from bad debt only in the year the debt becomes totally worthless. If you have a loss from a nonbusiness bad debt, you deduct it from capital gains, if any, and […]
When you sell or exchange your mutual fund shares, or if they are redeemed (a redemption), you will generally have a taxable gain or a deductible loss. Per IRS Instructions for Form 8949 Sales and Other Dispositions of Capital Assets, page 6: Average basis. You can use the average basis method to determine the basis […]
If you received Form 1099-R with a Disability Code of 3, the distribution is not subject to the additional 10% tax, but the disability distribution is still included in taxable income. See IRS Publication 575 for details. To enter this distribution into the TaxAct program, follow the steps in the FAQ Form 1099-R – Entering […]
If you have a 401(k) plan that allows loans to be taken and have elected to take a loan, this is called a “deemed distribution”. A deemed distribution is treated as an actual distribution for purposes of determining the tax on the distribution, including any early distribution tax. A deemed distribution is not treated as […]
Per IRS Instructions for Form 5329, page 5: Line 4 If any amount on line 3 was a distribution from a SIMPLE IRA received within 2 years from the date you first participated in the SIMPLE IRA plan, you must multiply that amount by 25% instead of 10%. These distributions are included in boxes 1 […]
The TaxAct program supports the entry of 200 Forms 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., however the IRS only allows 20 Forms 1099-R to be e-filed. If you have more than 20 Forms 1099-R, you will need to file a paper return. Note that any link in the […]
Unfortunately, we can’t determine all the deductions and credits for which you might be eligible. To make sure you haven’t missed any possible deductions or credits, return to the Federal and State Q&A sections and review them step-by-step. If you are using the TaxAct Online software and preparing an individual return, you may add on […]
Per IRS Publication 17 Your Federal Income Tax (For Individuals), page 92: Higher Standard Deduction for Blindness If you are blind on the last day of the year and you don’t itemize deductions, you are entitled to a higher standard deduction. Not totally blind. If you aren’t totally blind, you must get a certified statement […]
If you are mailing Form 8822 to the IRS to update your mailing address, and you receive your mail “In Care Of” a third party, please use these instructions to properly fill out this form. Per IRS Instructions for Form 8822, on page 2: “In Care of” Address If you receive your mail in care […]
To submit feedback on our products, go to our product suggestion webpage using the links below. Your feedback is appreciated and will be reviewed by the development team. If you have feedback for us, go to our TaxAct Product Suggestion webpage. If you have feedback, and you need real-time help, go to our Contact TaxAct Service & […]
You can claim the section 179 deduction and a special depreciation allowance for listed property and depreciated listed property using GDS and a declining balance method if the property meets the business-use requirement. Per IRS Publication 946 How To Depreciate Property, page 53: How To Allocate Use To determine whether the business-use requirement is met, […]
According to IRS Publication 587 Business Use of Your Home (Including Use by Daycare Providers) only daycare providers can use the percentage by time for business use of the home percentage (along with the square footage percentage). Other lines of business can only use the square footage percentage based on the portion of the home […]
Per IRS Publication 970 Tax Benefits for Education, page 44: Distributions The designated beneficiary of a Coverdell ESA can take a distribution at any time. Whether the distributions are tax free depends, in part, on whether the distributions are equal to or less than the amount of Adjusted qualified education expenses (AQEE) (defined later) the beneficiary […]
Per IRS Publication 970 Tax Benefits for Education, page 38 What is the tax benefit of the Coverdell ESA? Contributions to a Coverdell ESA aren’t deductible, but amounts deposited in the account grow tax free until distributed. If, for a year, distributions from an account aren’t more than a designated beneficiary’s adjusted qualified […]
Per IRS Publication 527 Residential Rental Property (Including Rental of Vacation Homes), page 15: Basis of Property Changed to Rental Use When you change property you held for personal use to rental use (for example, you rent your former home), the basis for depreciation will be the lesser of the fair market value or adjusted basis on […]
Under the Modified Accelerated Cost Recovery System (MACRS) of depreciation, there are three types of depreciation conventions: Half-year, Mid-quarter, and Mid-month. The convention determines the portion of the tax year for which depreciation is allowable during a year property is either placed in service or disposed of. HALF-YEAR CONVENTION treats all property placed in service […]
Although the description for Line 11 of Form 4562 Depreciation and Amortization is “Business income limitation,” the calculation for this line is not strictly based on your business income (loss). Per IRS Instructions for Form 4562, page 4: Line 11 The total cost you can deduct is limited to your taxable income from the active […]
When you need to calculate your property’s basis (e.g. for depreciation purposes or when you sell the asset), the basis of your depreciable property must be reduced by the depreciation that was allowed or allowable, whichever is greater. Because of this, it is best to calculate and take the depreciation on any asset from the […]
If the Government bought the right of way on a piece of land for some purpose (i.e. to run water or sewer lines) then the following information may be of help if this would be considered a granting of an easement. Per IRS Publication 544 Sales and Other Dispositions of Assets, page 3: Easement. The […]
Per IRS Publication 550 Investment Income and Expenses, on page 65: Form 1099-CAP transactions. If a corporation in which you own stock has had a change in control or a substantial change in capital structure, you should receive Form 1099-CAP, Changes in Corporate Control and Capital Structure, from the corporation. Use the Form 1099-CAP to […]
The TaxAct program will not prompt you to enter the basis of your traditional IRAs if you do not enter the information for Boxes 1, 2a or 2b, and 7, on your Form 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.. To report Form 1099-R and the basis of your […]
Per IRS Publication 590-A Contributions to Individual Retirement Arrangements (IRAs), page 11: How Much Can You Deduct? Generally, you can deduct the lesser of: The contributions to your traditional IRA for the year, or The general limit (or the Kay Bailey Hutchison Spousal IRA limit, if applicable) explained earlier under How Much Can Be Contributed. […]
When determining how much can be contributed to your IRA, it may be helpful to know which income is not considered “compensation.” Per IRS Publication 590-A Contributions to Individual Retirement Arrangements (IRAs), page 7: What Isn’t Compensation? Compensation doesn’t include any of the following items. Earnings and profits from property, such as rental income, interest […]
Per IRS Publication 575 Pension and Annuity Income, page 5: Qualified domestic relations order (QDRO). A QDRO is a judgment, decree, or order relating to payment of child support, alimony, or marital property rights to a spouse, former spouse, child, or other dependent of a participant in a retirement plan. The QDRO must contain certain […]
The amount of IRA contribution allowed when also receiving social security may need to be calculated on a special worksheet. Per IRS Publication 915 Social Security and Equivalent Railroad Retirement Benefits, page 6: Which worksheet to use. A worksheet you can use to figure your taxable benefits is in the Instructions for Forms 1040 and […]
The “General Rule” is the method generally used to determine the tax treatment of pension and annuity income from nonqualified plans (including commercial annuities). For a qualified plan, you generally cannot use the General Rule unless your annuity starting date is before November 19, 1996. Although IRS Publication 575 Pension and Annuity Income will help […]
Qualified Charitable Distributions (QCDs) were first made available to taxpayers in 2007. A qualified charitable distribution (QCD) is generally a nontaxable distribution made directly by the trustee of your IRA (other than a SEP or SIMPLE IRA) to an organization eligible to receive tax deductible contributions. You must be at least age 70 1/2 when […]
Per IRS Instructions for Form 1040 or 1040-SR: If your pension or annuity is fully taxable, enter the total pension or annuity payments (from Form(s) 1099-R, box 1) on line 5b; don’t make an entry on line 5a. If your Form 1099-R shows a taxable amount, you can report that amount on line 5b. But […]
Some IRS forms haven’t been released and are currently unavailable for printing or e-filing in the TaxAct program. See the TaxAct Forms Availability webpage for more information.
The TaxAct® program imports limited information from the PDF file of your prior year return in order to ensure our $100k Accuracy Guarantee and Maximum Refund Guarantee. Data from a prior year return PDF that was created in a different tax program will be different from a TaxAct prior year return PDF, and TaxAct will […]
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 […]
Click any link below to go to our checklist for that return. Complete the checklist before completing your TaxAct® return to save time. 1040 Individual Income Tax Return 1065 – Partnership Return 1120S – S Corporation Return 1120 – C Corporation Return 1041 Estates & Trusts 990 – Return of Organization Exempt From Income Tax
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 […]
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 […]
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 […]
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) […]
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 […]
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 […]
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 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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
To enter mortgage interest in the TaxAct program, go to our Form 1098 – Entering in Program FAQ. See Publication 936 Home Mortgage Interest Deduction for more information. 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 […]
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 […]
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 […]
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 […]
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 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 […]
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 […]
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 […]
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 […]
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 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 […]
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 […]
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 […]
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 […]
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 […]
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 State of Illinois allows a subtraction from income for certain military pay earned, which is claimed on
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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” […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 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 […]
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 […]
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 […]
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’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, […]
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, […]
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 […]
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. […]
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 […]
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 […]
The most common cause of incorrect ZIP code errors is the selection of the wrong state. For example, Wal-Mart employees often receive an error for choosing AZ (Arizona) instead of the correct state of AR (Arkansas). Please verify that you have entered the correct state information. If you have verified that you entered the correct […]
Although entering zero (0) in a number entry field may appear as a blank field, it is treated by the program as a zero.
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 […]
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. […]
When you print your entire return (not just an individual form or schedule), all necessary supporting documents will be printed.
If you are a preparer e-filing returns for the first time, see the following links for helpful information: An Electronic Filing Identification Number (EFIN) is required to e-file returns. If you don’t already have an EFIN, apply today using the IRS’s e-Services – Online Tools for Tax Professionals. Learn more on the IRS Become an […]
The TaxAct® Accuracy Guarantee does not cover the Professional Editions. Paid preparers are responsible for reviewing the return for accuracy. If you are signing the return as a paid preparer, the IRS will ultimately hold you accountable for the return’s accuracy. If you determine there is a problem, you can either override the entry or […]
Although TaxAct® provides the ability for desktop users of the product to override fields in the return if they wish, numerous Alerts are generated to warn of the consequences of doing so. The first key pressed to change a field that would be considered an override (changing a calculation made by the program) triggers a […]
For information regarding tax rules and regulations for military personnel, please see the following: Military Family Tax Benefits Tax Information for Members of the U.S. Armed Forces Publication 3 Armed Forces’ Tax Guide Note that any link in the information above is updated each year automatically and will take you to the most recent […]
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 […]
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.
The IRS Tax Information for Businesses webpage contains a wealth of information for the small business owner. Another good source of information for the small business owner is the IRS Internal Revenue Bulletins (IRBs) webpage, which is published weekly. The IRB is the authoritative instrument of the Commissioner of Internal Revenue for announcing official rulings […]
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 […]
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 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 […]
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 […]
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 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 […]
If there are spaces remaining in any of the fields, the TaxAct desktop program interprets those spaces as data (even though you do not see any letters or numbers in that field). To ensure empty fields don’t have spaces in them: From within your TaxAct return (Desktop or Professional), click the data entry field (if a […]
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: […]
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 […]
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 […]
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 […]
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.
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 […]
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 […]
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 […]
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 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 […]
Call 1-800-772-1213 (the national Social Security Administration number) to contact the Social Security Administration toll free, or go to the Social Security Office Locator to find the phone number of your local office. Alternatively, go to the SSA Frequently Asked Questions webpage.
TaxAct Online You can access worksheets in TaxAct Online through the Print Center. See Printing Your Return and Individual Forms for detailed instructions. Desktop You will need to view the worksheet as a form in the Forms Explorer. See Entering in Program – Fillable Forms for detailed instructions. If an Unable to open form directly […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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, […]
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 […]
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 […]
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 […]
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 […]
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 […]
IRS Publication 938 Real Estate Mortgage Investment Conduits (REMICs) Reporting Information has information regarding reporting REMICs. You can use the directory in the publication to find the representative of the REMIC, then request information from that representative by telephone or mail. Your request must specify the calendar quarters and the classes of REMIC regular interests […]
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.
Form W-12 IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal will not be supported in the TaxAct® program as it is not a part of the federal return; however, it is accessible through the IRS website. Form W-12 replaced Form W-7P Application for IRS Individual Taxpayer Identification Number, last used by the IRS […]
You may e-file your clients’ tax returns using either the Self-Select PIN method or Practitioner PIN method (Form 8879 IRS e-file Signature Authorization). Self-Select PIN method (aka Paperless Option) Selecting the Self-Select PIN method means your client(s) will be entering their own PIN numbers directly into your computer (they will also need to provide information […]
To view the Submission ID Number and the status of your e-filed returns: From within your TaxAct Professional Edition program, click Client Manager in the options bar to view the Client Manager screen (if it is not already visible). Click Professional Reports. Click the Refresh Professional Reports icon (Green arrows). The Submission ID Number displayed on […]
An ERO PIN (Practitioner PIN) is used when a preparer is including Form 8879 IRS e-file Signature Authorization in the submission of a client’s return. The number is created by the preparer following the IRS criteria listed in the IRS Self-Select PIN Method for Forms 1040 and 4868 Modernized e-File (MeF) webpage. What is an […]
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 […]
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 […]
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 […]
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 […]
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 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 […]
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 […]
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 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 […]
Go to the IRS Where to File Paper Tax Returns With or Without a Payment webpage for a list of addresses for filing. 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 […]
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 […]
For more information on individual retirement arrangements, go to the IRS Retirement Plans Frequently Asked Questions (FAQs) webpage. Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.
The 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 […]
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 […]
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 […]
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 […]
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 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 […]
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 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 […]
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 […]
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 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. […]
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 […]
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.
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
Go to the IRS Contact My Local Office Internationally webpage to learn about international taxpayer service centers. 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 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 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 […]
You can cancel scheduled Electronic Funds Withdrawals (EFW) by contacting the IRS e-file Payment Services at 1-888-353-4537. They can also help you change your banking information for future payments. It is possible they will direct you to use the Electronic Federal Tax Payment System (EFTPS) available at the IRS EFTPS website. For more information, go […]
If an electronically filed return was accepted by the IRS but did not include valid direct debit banking information (entered either during the e-file process or on the Electronic Filing Worksheet), the balance due must be paid using an alternative payment method. Available options include: Electronic Federal Tax Payment System (EFTPS) – Submit the payment […]
A Section 83(b) Election is made to include the value of restricted property at the time of transfer (minus any amount you paid for the property) in your income for the year it is transferred. If you make this choice, the substantial vesting rules do not apply and, generally, any later appreciation in value is […]
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. […]
The IRS Modernized e-File (MeF) Internet Filing webpage allows you to receive notification of Federal acceptance or rejection almost instantaneously. When a return is transmitted through the MeF system, notifications of acceptance contain a Federal Submission ID (20 digits) instead of a Declaration Control Number (DCN) (14 digits). Note that any link in the information […]
Per IRS Instructions for Form 8917, page 2: Deduction extended. The tuition and fees deduction is extended for qualified tuition and fees paid in calendar years 2018, 2019, and 2020. Don’t claim the deduction for expenses paid after 2020 unless the credit is extended again. Use Form 8917 (Rev. January 2020) and these instructions for […]
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. […]
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 […]
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 […]
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
To claim an amount of depreciation for part-year use of an asset (if you need help accessing Form 1099-B in the TaxAct program, go to our Schedule C – Entering Sole Proprietorship in Program FAQ) that was converted from business use to personal use during the year (this excludes the capital loss that cannot be […]
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 […]
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 […]
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 […]
When information is imported from a prior year return, all previous depreciation amounts and assets are automatically put into the current year return. You will need to verify and edit your depreciable assets if any have been sold or taken out of service. The asset description, date placed in service, asset type, cost, method, life, […]
When information is imported from a prior year return, all previous depreciation data and assets are automatically inserted into the current year return (the asset description, date placed in service, asset type, cost, method, life, convention, section 179 expense, and prior depreciation are included). You will need to verify and edit your depreciable assets if […]
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 […]
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 […]
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 […]
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.
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 […]
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 […]
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 […]
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 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 […]
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 […]
If you need to delete a Form 1099-MISC, or if there is a blank Form 1099-MISC preventing you from e-filing your return, click one of the following links for instructions to delete the form. To delete a form in your Online TaxAct return, go to our Delete Online Forms FAQ. To delete a form in your […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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, […]
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 […]
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
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.
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 […]
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% […]
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 […]
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 […]
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 […]
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 […]
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 […]
See IRS Publication 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals) for information regarding canceled debts, foreclosures, repossessions, and abandonments. 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.
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, […]
The TaxAct program supports federal e-filing for returns 1120, 1120-S, and 1065. Go to our Forms 1065 / 1120-S / 1120 / 1040-NR / 1041 Availability FAQ for links to the online and desktop programs. The TaxAct program supports state e-filing for these states in returns 1120 and 1120-S for the 2024 tax year: Alaska Alabama Arkansas […]
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. […]
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 […]
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 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 […]
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 […]
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 […]
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. […]
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 […]
A yellow alert indicates that you may or may not need to take any additional action. It is informational only and does not indicate any errors on the return. The alert continues to generate so that you may go back and change your entry if need be. However, once you are satisfied with your entry, […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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. Schedule K-1 shows each shareholder’s separate share. Give each shareholder a copy of the Shareholder’s Instructions for Schedule K-1 (Form 1120-S) or specific […]
TaxAct will allocate the distributive items reported on Schedule K (Form 1065) Partners – Distributive Share Items (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 […]
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 include partnership items on their tax or information returns. Although the […]
TaxAct provides tools to help you plan for next year’s tax return. To access the planning tools: From within your TaxAct return (Online or Desktop), click Next Year (on smaller devices, click in the top left corner of your screen, then click Next Year). Continue with the interview process to prepare for next year. Planning tools […]
There are a number of IRS letters and notices that are sent as either Examination Letters, Collection Letters, or Notices. Go to the IRS Letters and Notices Offering an Appeal Opportunity webpage for a brief summary of each of the following letters or notices: Letter 11 – Final Notice of Intent to Levy and Notice […]
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 […]
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 […]
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 TaxAct online products require the latest version of Chrome, Firefox, Microsoft Edge, or version 13 or higher of Safari. TaxAct desktop products require Windows 10 or higher. Go to our TaxAct System Requirements webpage for details.
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 […]
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 […]
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. The length of time you should keep a document depends on the action, expense, or even the document records. […]
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 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 […]
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 […]
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 […]
For help with your TaxAct Online or Desktop program, go to our Contact TaxAct Service & Support webpage. For help with your TaxAct Professional program, go to our TaxAct Professional Support webpage.
The IRS requires tax software companies to receive a customer’s consent before showing any third-party options, such as different ways to pay for your software fees or receive your refund. If you e-sign your consent through the TaxAct program once, you will not need to sign it again. Your signature DOES NOT give TaxAct® the […]
We appreciate customer comments and suggestions, and use your feedback to update our TaxAct programs each year. We compile your feedback each season and review it before we start development for next year’s product. We add and maintain forms based on the number of requests and how many customers use them. Submit your feedback to […]
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 […]
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 […]
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 […]
The CP 79A is sent by the IRS to notify the taxpayer that they are banned from claiming the Earned Income Tax Credit (EIC) and will need to complete Form 8862 Information To Claim Certain Credits After Disallowance to claim the EIC on a future tax return. This is generally caused by the taxpayer being […]
The CP79 is sent by the IRS to notify the taxpayer that they will need to complete Form 8862 Information To Claim Certain Credits After Disallowance to claim the Earned Income Credit (EIC) on a future tax return. This is generally caused by the taxpayer being disallowed or receiving a reduced EIC. Form 8862 can […]
If you have received this notice, it means you have failed to file a tax return. The type of return and tax period will be shown in the upper right corner as well as in the body of the notice. You received this notice because the IRS has reason to think you meet the filing […]
The CP 75 series of notices are issued to inform the taxpayer that their Earned Income Credit (EIC) portion of their refund is being delayed while the IRS is examining the return or determining their eligibility. The notice will state why the IRS is delaying the EIC portion of your refund and what information or […]
The CP 54 series of notices is issued to alert the taxpayer that: there is a problem with name and identifying number on the tax return or the estimates paid, or the IRS is holding a refund for a prior year because the name and Social Security Number (SSN) or IRS Individual Taxpayer Identification Number […]
This notice informs the taxpayer that the estimated tax payments received by the IRS and posted to their account does not match the tax payments claimed on the return, leaving a balance due. There may also be information included for any changes made to the return. The notice shows the credits the IRS has received […]
This notice informs the taxpayer of a balance due because of an audit examination of their return. Sections of the Notice: Header – This area contains the Notice Number, the notice date, your Social Security Number and the IRS contact number. Explanation – The explanation portion details the IRS audit adjustments to the tax return […]
This is not a bill – the IRS has made changes you requested to your tax return and there was an overpayment based on this adjustment. You will be receiving an additional tax refund within 2-3 weeks of the notice. The notice explains the changes to the tax return. If you agree with the adjustment(s) […]
The IRS has adjusted your tax return and these changes affect your refund. The notice explains the changes to the tax return and the amount of the overpayment that was applied to your tax balance from prior year returns. If you agree with the adjustment, make the changes to your tax return records to reflect […]
The IRS has made changes to your tax return and there is nothing owed or no refund based on the adjustment. The notice explains the changes to the tax return (and/or Earned Income Credit). If you agree with the adjustment(s), make the appropriate changes to your tax return record. If you do not agree with […]
The IRS has adjusted your tax return including the Earned Income Credit (EIC) and there is a balance due because of the adjustment. The notice explains the changes to the tax return and the EIC. If you do not agree with the change, call or write to the IRS at the phone number or address […]
This notice is issued to inform the taxpayer that the IRS has adjusted their tax return and there is a balance due because of the adjustment. The notice will explain the changes to the tax return and request payment of the balance due. Sections of the CP 11 Header – This area contains the Notice […]
The IRS has adjusted your tax return which affected the amount of the refund applied to the following year’s estimated tax payments as requested on the tax return. The notice explains the changes to the tax return and the resulting adjustment to the amount applied to the estimated payments, you should adjust your tax return […]
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 […]
IRS Notice CP 2000 is referred to as the Notice of Proposed Adjustment for Underpayment/Overpayment and is the most common notice sent out by the IRS. The IRS compares informational returns filed by companies on Forms W-2, 1098, 1099, etc. with information as reported by the taxpayer on their return, and issues a CP 2000 […]
This is a notice the taxpayer would receive if he or she has an installment agreement with the IRS for an outstanding tax balance and the IRS considers you in default on your installment agreement. Examples of default causing actions are: missing a payment, new balance due, or not filing a tax return. The notice […]
This is the final notice that you have a balance due on a tax account. The IRS has previously sent the taxpayer notices about a balance due on a tax account. This urgent notice alerts you that there is an outstanding balance and the IRS intends to levy or take your state tax refunds. Sections […]
This is the first reminder notice that you have a balance due on a tax account. The IRS has previously sent a notice about a balance due on a tax account. This reminder notice alerts you that there is an outstanding balance and, if not paid within 10 days, the possible actions the IRS may […]
The CP 161 is not a math error notice. It shows the underpaid tax according to the IRS records. CP 161 shows the tax you reported on the return, the payments the IRS applied, and the resulting underpayment the IRS has on record. This notice is a reconciliation issue and the starting point is generally […]
The IRS issues this notice to inform the taxpayer that they intend to levy against their Social Security Benefits. The notice contains the steps necessary to be taken within 30 days to prevent the IRS from this action. The taxpayer has a balance due on their account for which they have previously received a notice. […]
This notice is to tell you that the IRS intends to levy or legally seize property to satisfy your tax debt. You should pay the balance due or, if the full payment cannot be made at this time, contact the IRS immediately at the number listed on the notice. The notice gives you 30 days […]
This notice informs the taxpayer that the IRS is taking all or a portion of the overpayment (refund) from one account and applying it to an underpayment (balance due) for another account. There may be additional information on the notice regarding protection from your spouse’s debts (Injured Spouse Relief). Sections of the Notice: Header – […]
The IRS was unable to apply the taxpayer’s overpayment to the following year’s taxes as requested on the return. This could be caused by an adjustment to the filed return or the IRS record of payments made did not match the payments claimed on the return. The notice could also be generated if the IRS […]
The IRS is contacting your because their records indicate there is an outstanding refund check issued to the taxpayer – the refund check is outdated and no longer valid. If you still have the check, destroy it and contact the IRS to receive a new refund check. If the check is lost contact the IRS […]
This notice informs the taxpayer that the IRS has made changes to their return based upon the information the taxpayer has provided. Due to these changes, additional taxes are now due. Sections of the Notice: Header – This area contains the Notice Number, the applicable tax year, the notice date, your Social Security Number, and […]
This notice is issued to inform the taxpayer that the IRS has made changes to their return which results in an adjusted overpayment that will be refunded within 4 to 6 weeks if no other taxes or past due debts are owed. Sections of the CP 12 Header – This area contains the Notice Number, the […]
This notice sent from the IRS is to alert the taxpayer that they may be eligible to receive the refundable Earned Income Credit based on the data supplied on their return. The notice contains a questionnaire to complete and submit to the IRS for the Earned Income Credit claim. After completing the questionnaire, if the […]
Below is a list of common IRS Notices. You can find your notice number on page 1 at the top right. Click a link below that matches the number on your notice to be taken to our corresponding FAQs. Most Common CP2000 CP12 CP11 Letter 525 CP12C Other Notices CP09 CP22E CP79 CP10 CP23 […]
An important part of the Taxpayer Bill of Rights is the Taxpayer Advocate Service. The function of the Taxpayer Advocate is to assist taxpayers in resolving problems with the IRS, identify areas in which taxpayers have problems dealing with the IRS, propose changes in administrative practices of the IRS, and identify potential legislative changes that […]
The Letter Audit (or Correspondence Audit) is conducted entirely by mail. The IRS will send a letter asking for additional information about an item on your return, such as a deduction claimed for charitable contributions or medical expenses. This type of audit could become an office audit if the IRS is not satisfied with your […]
The Field Audit is an in-person interview and review of the taxpayer’s records that is usually conducted at the taxpayer’s home, place of business, or accountant’s office. Audits of business returns, especially for self-employed individuals, are often done at the taxpayer’s place of business and are more involved than audits of individual returns. The term […]
The Office (or Desk) Audit is an in-person interview and review of the taxpayer’s records and is usually done at a local IRS office. Most audits of individual returns (except for the self-employed) are office audits because the returns are not as complex. Often these audits will only cover a few specific issues which the […]
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: […]
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 […]
General Instructions To view and/or print an instruction letter: Print Client Instruction Letter While E-Filing Print Client Instruction Letter While Paper Filing Choose Paper Filing, E-Filing, or Client Instruction Letter If you are attempting to mail a paper return and the instruction letter is indicating the return will be e-filed, or vice versa, you can […]
TaxAct offers product guarantees for each of our product formats, online and download: Guarantees for TaxAct Online $100k Accuracy Guarantee (consumer 1040, 1065, 1120, and 1120-S products only) Maximum Refund Guarantee (consumer 1040 products only) Satisfaction Guarantee Guarantees for TaxAct Download $100k Accuracy Guarantee (consumer 1040, 1065, 1120, and 1120-S products only) Money-Back Guarantee Maximum […]
You will need to complete the filing steps again, and enter different credit card information: From within your TaxAct return (Online or Desktop), click Filing (on smaller devices, click in the top left corner of your screen, then click Filing). On the screen titled Paper/E-Filing – Federal Balance Due Options, click the circle next to […]
If you receive a “Tax Act Final Version Not Found” error when attempting to install a TaxAct® Desktop state module, the error message is most likely caused by one of these issues: The Federal program needs to be installed first. Sign in to your TaxAct Account online, click Orders and Downloads, then download and install the […]
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 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 […]
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 […]
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 […]
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 […]
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. […]
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 […]
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 […]
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 […]
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 […]
If your federal return is rejected with one of these codes, the taxpayer or spouse did not enter an Identity Protection Personal Identification Number (IP PIN) or the number he or she entered is invalid or incorrect. If you have misplaced the IRS letter containing your IP PIN, see the IRS Get An Identity Protection […]
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 1099-INT Interest Income and/or Form 1099-DIV Dividends and Distributions . The most common reasons are listed below: The form was never entered into the TaxAct® program and the income was not reported elsewhere on the return. (According to the IRS instructions, the […]
There are many reasons you could have received a notice regarding your Form(s) 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 […]
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 […]
To view or edit the Bank Account Worksheet which contains the banking information for direct withdrawal of estimated tax payments: From within your TaxAct Professional Edition program, in your client’s return, click Forms in the options bar to view the Forms Explorer (if it is not already visible). Click Federal from the dropdown in forms […]
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. This applies even if no amount is withheld from the payment because of a treaty or code exception to taxation, or if any amount […]
The following steps will enable you to enter or review rental property related depreciation information to populate IRS Form 4562 Depreciation and Amortization (Including Information on Listed Property) for Federal Schedule E (Form 1040) Supplemental Income and Loss. To enter or review rental property related depreciation information (if you need help accessing Schedule E, go […]
If you 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 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) […]
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 […]
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 […]
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 […]
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 […]
TaxAct supports Form 990, Return of Organization Exempt from Income Tax. Generally, tax-exempt organizations must file an annual informational return. Tax-exempt organizations that have annual gross receipts not normally in excess of $25,000 are not required to file the annual information return. In addition, churches and certain religious organizations, certain state and local instrumentalities, and […]
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 […]
There are several reasons why a Republic Bank application can be rejected. If your application is rejected, you will receive an email explaining why the application was rejected and providing instructions for correction. One common reason for rejection includes providing an incorrect expiration date when entering the identification information, or entering the same ID 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 […]
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 […]
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 your return was rejected due to Adjusted Gross Income (AGI), your AGI from the prior year doesn’t match the number in the IRS e-file database. Verify that the AGI you’re using is from the original return and not an amended or corrected return. In the event you need to file a corrected return, you […]
TaxAct® provides tools to help you plan for next year’s tax return. To access the planning tools: From within your TaxAct return (Online or Desktop), click Next Year (on smaller devices, click in the top left corner of your screen, then click Next Year). Continue with the interview process to prepare for next year. Let’s […]
If your browser locks when you try to view a PDF document, tell Adobe Reader to launch the PDF in a new window instead of the same browser window. If you need help editing these settings, go to the Adobe Acrobat Learn & Support webpage. Note that any link in the information above is updated […]
To file a return in TaxAct®, you must complete the filing steps in the program. To begin the filing process, click Filing (on smaller devices, click in the top left corner of your screen, then click Filing). You will choose to either file your return electronically or mail a paper return to the IRS/state agency. Filing Electronically To file […]
Electronic Filing (e-filing) goes through TaxAct® to be transmitted to the IRS. The e-filing module is included in the TaxAct Professional Editions. E-filing with TaxAct is available for Federal 1040, 1065, 1120-S, 1120, 1041, and 990 returns. State e-filing is available for those states that assess personal income tax and for many business and estate […]
After completing the Federal Q&A, the next step is to address the State Q&A. You’ll only need to answer a few state-specific questions for your state return. TaxAct® State Editions are typically available starting in January each year. For anticipated release dates, please refer to our State Program Release Dates FAQ. To prepare your State […]
If you recently updated your Social Security Number (SSN) you might not be able to file your return electronically as the IRS updates their E-Filing Database only 1 time a year. The update is generally done around late October, early November. If your name or Social Security Number changed after that date, you will need […]
If your tax return is rejected because the listed dependent’s Social Security Number (SSN) is being used on another tax return, and you verified that the information you supplied is correct, you will need to file a paper return for this filing season. The rejection could be caused by an error on another taxpayer’s return, […]
Go to our TaxAct System Requirements webpage to make sure your system is compatible with our programs. Disable all pop-up blockers. If you need help printing, go to our Printing Your Return and Individual Forms – Individuals or Printing Your Return and Individual Forms – Professional Edition FAQ. The TaxAct program creates a PDF when […]
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.
To correct error codes for Forms W-2, W-2G, or 1099-R, you need to access the Form again in the TaxAct program and make sure the information you entered is correct. “Form W-2 – Adding,’ Reviewing’ or Deleting” Form W-2G – Entering Gambling Winnings in Program Form 1099-R – Entering Distributions from Retirement Plans The Payer […]
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 […]
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. […]
Personal casualty losses attributable to certain qualified disasters may be claimed as a qualified disaster loss on Form 4684 for the year the loss was sustained. See the current Instructions for Form 4684 and IRS Publication 547 for the definition of a qualified disaster loss and the disasters that qualify. If you have a casualty […]
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.”) […]
REJECTION CODES F1040-513 and F1040A-513 Spouse Listed as Primary Taxpayer or Dependent on Another Return. If your return was rejected because your spouse’s SSN was listed as the primary taxpayer or dependent on another return, please verify that the Social Security Number entered for the spouse is correct. This information should be the same as […]
REJECTION CODES IND-512-01, F1040-512, and F1040SSPR-512 Dependent’s (or Qualifying Child’s) SSN Listed as Primary or Secondary SSN on Same or Separate Return. If your return was rejected because your dependent or qualifying child was also listed as the primary or secondary taxpayer on your return or another return, you have two options: Note. Be sure […]
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, […]
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 […]
Due to tax reform, the deduction for uniform expenses not covered by your employer has been eliminated for tax years 2018-2025.
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 […]
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 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 […]
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 […]
Per IRS Publication 936, page 8: Refinancing. Generally, points you pay to refinance a mortgage aren’t deductible in full in the year you pay them. This is true even if the new mortgage is secured by your main home. However, if you use part of the refinanced mortgage proceeds to substantially improve your main home […]
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 […]
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 […]
To access Form 8815 Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989 (For Filers With Qualified Higher Education Expenses): 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 […]
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 […]
Deductions entered in the Estates and Trusts 1041 program that may be allocable to the Estate/Trust and/or to the Beneficiary are entered under the Estate/Trust column and/or the Beneficiary/Accounting Income column. The following information will help to determine where to make each entry and how the amounts will then flow in the return. Estate/Trust column: […]
Your family may have received multiple Forms 1095-A Health Insurance Marketplace Statements. However, there are only certain instances in which the combined amounts from Column B of those forms should be transferred to the Monthly Calculation section (Lines 12-23) of Form 8962 Premium Tax Credit (PTC). Form 1095-A, Columns A and C will always be […]
Individual preparer information can be added and/or modified in the Preparer Master Information dialog box. The preparer section allows you to: Click Add New Preparer to add a new preparer. Click the Pencil icon to edit a preparer. Click Inactive to remove a preparer from the active list. NOTE: The first preparer you add should […]
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 […]
Once you make all your Master Information selections, the Setup Wizard prompts you to set defaults for various forms you use in your practice. Once you complete the setup for each form, a green checkmark will appear on the tile so you can easily see which you have not yet completed. Set Master Forms Defaults […]
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 […]
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 […]
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 […]
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 […]
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 […]
An Employer Identification Number (EIN) is a nine-digit number issued by the IRS. An EIN identifies the tax accounts of employers and certain other taxpayers, and determines the type of business tax return they must file. An EIN is typically issued using the XX-XXXXXXX format. Sometimes, a letter or an employee plan number (for example, […]
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) […]
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 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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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. […]
To authorize the IRS to discuss your return with someone else (for example, a relative or paid tax preparer), you must provide that person’s name, phone number, and PIN (any 5-digit number created by the designee). This information will be entered into the Q&A. Tax professionals should complete the Third Party Designee section on Form […]
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 […]
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 […]
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 […]
Rejection codes that refer to a mismatched name, birth date, or Social Security Number (SSN) indicate that information on Form 1040 U.S. Individual Income Tax Return or in the filing steps doesn’t match the IRS e-file database. IRS records are generated by the Social Security Administration, so all names, birth dates, and SSNs should match […]
In order to obtain the mailing address for your federal or state return, you can go to the the IRS Where to File Paper Tax Returns With or Without a Payment webpage, or check the filing instructions from within your TaxAct return; go to our Print Filing Instructions Online and Desktop FAQ for help. The […]
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 […]
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 […]
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 […]
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 […]
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 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 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 […]
If you receive a dividend income report without a payer’s identification number, enter the information in the TaxAct program as though you received a Form 1099-DIV Dividends and Distributions, but leave the Payer’s Federal Identification Number (FEIN) blank. This number is not required and the return will e-file without the number. The information required by […]
You 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 […]
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 […]
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 the return was accepted Once your return has been accepted, you can no longer make changes to it in the TaxAct program. You must create an amended return in order to make changes to your return. Go to our Form 1040-X – How to Create an Amended Return FAQ for more information. If the […]
REJECTION CODES R0000-507-01 and F1040SSPR-507-01 Dependent Was Claimed On Another Return If your return was rejected because your dependent was claimed on another return, double-check the information you entered for the dependent. If the name, SSN, or other data for the dependent is incorrect, fix the mistake and resubmit your return. If the dependent’s information […]
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 […]
If your Social Security Number is used on more than one return, TaxAct will notify you, even if you have not yet filed your return. Duplicate SSNs are usually the result of a typo or other manual mistake. If the information you have entered is correct, you may have created more than one account. Make […]
What is the PCI Secure Software Standard? The PCI Secure Software Standard provides a set of security requirements as well as assessment procedures for performing PCI Secure Software Assessments. The Secure Software Assessor training covers the PCI Secure Software Requirements and Assessment Procedures (PCI Secure Software Standard). What is the Validated Payment Software list maintained by […]
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 […]
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 […]
TaxAct return file extensions are three characters long: The first character is the file type: b = backup file t = return file (not a backup) The second character is the return type a = 1040 c = 1120 s = 1120-S p = 1065 e = 1041 x = 990 The third character is […]
Form W-2C Corrected Wage and Tax Statement is issued by an employer if they discover they made a mistake on Form W-2. If you have received a Form W-2C, Corrected Wage and Tax Statement, you can still electronically file your return. Enter the information from your Form W-2C as a Form W-2, Wage and Tax Statement […]
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 […]
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 […]
While the TaxAct program does not support Form 7203 for 1040 returns, we do support the ability to attach the shareholder’s basis worksheet when required. In order to see this option during the e-filing steps, the “basis computation required” field must be checked on the Schedule K-1 (1120-S). From within your TaxAct return (Online or […]
With TaxAct Professional Edition, you can offer bank services through Santa Barbara Tax Products Group (TPG); however, you must first establish an account with the bank. Deadlines for applying with Santa Barbara Tax Products Group (TPG) can be found via TaxAct’s Bank Product page. If you miss the bank application deadline, you can still provide tax […]
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 […]
Website problems can be caused by poor internet connection, or browser settings like add-ons, pop-up blockers, auto-fill, or other security settings. Here are some troubleshooting options: Try using a different web browser. Check your browser settings. Enable pop-ups temporarily for the TaxAct website if pop-ups are blocked. Clear your cache and browsing history. You can […]
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 […]
You can click one of the help topics for common e-filing issues, or click any of the error codes listed. Common e-filing issues: IRS Reject Codes – Name, Birthdate, SSN Mismatch IRS Reject Codes – Self Select PIN/AGI Mismatch IRS Reject Codes – Employer ID Number (EIN) or Payer’s ID Number Ineligible for Self-Select PIN […]
If a taxpayer is unable to pay the full balance due, they may request a monthly payment plan by filing Form 9465, Installment Agreement Request. The IRS generally recommends paying as much of the outstanding tax liability as possible before requesting an installment agreement for the remaining balance. Form 9465 is available in all versions […]
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 […]
In the United States, federal taxes apply to workers no matter where they live. State taxes, however, can vary — especially for workers who live and work in different states. Generally, if you live in one state but work in another, you must file an income tax return in both states. This is because withholding […]
Your share of sales proceeds (generally reported on Form 1099-S Proceeds From Real Estate Transactions) from the sale of an inherited home should be reported on Schedule D (Form 1040) Capital Gains and Losses in the Investment Income section of TaxAct. Enter “Inherited” as the date the property was acquired, then enter the cost basis, […]
The information below will help you determine if Short Term Disability payments you received are taxable income on your return. Per IRS Publication 525 Taxable and Nontaxable Income: Sickness and Injury Benefits In most cases, you must report as income any amount you receive for personal injury or sickness through an accident or health plan […]
As a general rule, the starting point for determining a general partner’s self-employment earnings is the partner’s distributive share of a partnership’s ordinary trade or business income reported on line 1 of Schedule K-1 (Form 1065). Whether or not the partner materially participated in the partnership’s business is irrelevant. Added to this amount are certain […]
Generally, Code 2 is reflected on the Form 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. received from the payer of the distribution for a Roth IRA conversion, where a Traditional IRA is converted to a Roth IRA. Per IRS Publication 590-A Contributions to Individual Retirement Arrangements (IRAs), on page […]
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. Form W-2 Wage and Tax Statement, Box 14, can be used by the employer to give other information to an employee. If you have an amount in Box […]
Per IRS Publication 17 Your Federal Income Tax, page 22: Married Filing Separately You can choose married filing separately as your filing status if you are married. This filing status may benefit you if you want to be responsible only for your own tax or if it results in less tax than filing a joint return. Special […]
Per IRS Instructions for Schedule D Capital Gains and Losses, page D-2: Sale of Your Home You may not need to report the sale or exchange of your main home. If you must report it, complete Form 8949 before Schedule D. Report the sale or exchange of your main home on Form 8949 if: You […]
The EIC is based on several factors such as age, earned income, adjusted gross income, filing status, whether the taxpayer had no qualifying child, had one qualifying child, or had two or more qualifying children, etc. The EIC worksheets and tables can be accessed on IRS Instruction 1040 1040 and 1040-SR Instructions, pages 46-56. You can […]
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 […]
Until you sell stocks acquired under an Incentive Stock Option (ISO), there is nothing to report as a capital gain or loss. The following information is useful if you still hold the stock at the end of the year after it has been exercised, or for the year you sell the stock. Per IRS Publication […]
If your employer withheld too much Social Security tax in Box 4 of your W-2 form, or withheld too much Medicare tax in Box 6 of your W-2 form, you’ll need to contact your employer for a refund of the excess FICA taxes withheld. Excess social security withholding occurs when Box 4 is more than […]
The IRS has a number of Online Tools and Resources available from their website. Due to their high call volumes, you may want to explore those options first for faster service. If you determine you do need to call for assistance, the site instructs how to prepare for the call and the information you will […]
Master Limited Partnerships (MLPs) are becoming more and more popular investment options. When you sell your interest in an MLP, the tax reporting can be complicated based upon your unique individual situation. Over the course of your investment in the MLP, you will receive a Schedule K-1 each year reporting your portion of the income […]
The TaxAct Professional programs are designed to allow Federal return information to flow to the state return(s). Although you can e-file a state return without e-filing the federal return, you must first complete Federal Q&A. The State Q&A interview section will prompt you for additional information specific to the state return. In order to then […]
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 […]
To enter or review information from Form 56 Notice Concerning Fiduciary Relationship: From within your TaxAct 1041 return, click Federal. On smaller devices, click in the upper left-hand corner, then click Federal. Click Miscellaneous Topics in the Federal Quick Q&A Topics menu to expand, then click Form 56 – Notice Concerning Fiduciary Relationship. Click Form 56 to scroll down to answer all applicable questions, then […]
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 […]
Qualified dividends (Form 1041 U.S. Income Tax Return for Estates and Trusts, Line 2b), are split between the beneficiaries and the estate or trust based on the beneficiaries’ share of distributable net income (DNI). TaxAct takes the total amount of qualified dividends times total distributions (Schedule B within Form 1041, Line 11) divided by DNI […]
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 […]
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 […]
The IRS imposes a limit of five on the number of tax returns that you may file electronically (“e-filing”). This limitation is imposed by the IRS, not by TaxAct. Note: The IRS imposes the five-return limit specifically on electronically filed returns. If you reach the five-return e-file limit, you may submit paper copies of any additional tax returns. […]
The IRS requires all paid preparers who anticipate preparing and filing 11 or more individual returns during a calendar year to e-file those returns. Members of firms must count returns in the aggregate. A summary of the new requirements appears in the IRS Most Tax Return Preparers Must Use IRS e-file webpage. The measures are […]
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 […]
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 […]
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 […]
The American Opportunity Tax Credit (AOTC) can be claimed for qualified education expenses incurred during a student’s first four years of postsecondary education. The credit is worth up to $2,500 per eligible student each year and is calculated as 100% of the first $2,000 of qualified expenses plus 25% of the next $2,000. Up to […]
Form 3922 Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c) is for informational purposes only and isn’t entered into your return. Keep the form for your records because you’ll need the information when you sell, assign, or transfer the stock. When you dispose of the stock, you’ll receive Form 1099-B […]
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 […]
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 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 […]
Understanding commonly used terms and their acronyms can make it easier to prepare and file your tax return. Taxpayer Identification Number (TIN): Refers to the number issued by the IRS or Social Security Administration to identify taxpayers. For individual filers, TIN is usually the taxpayer’s Social Security Number (SSN) or individual taxpayer identification number (ITIN). […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
