Can I import my prior year tax return from a different software? Yes! TaxAct makes it easy to switch, even if you used a different tax software last year. You can upload your prior-year tax return in PDF format, and we’ll pull in the details we need, which you can review for accuracy. It’s quick, seamless, […]
TaxAct customers can enter multiple Form 1099-B Proceeds From Broker and Barter Exchange Transactions quickly and easily by importing a CSV (comma separated values) file. To import transactions, you will need to either: obtain a spreadsheet file from your broker and import it using the steps below, or create your own spreadsheet – see Form […]
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 […]
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 […]
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). […]
You can save time by importing last year’s return into this year’s return. You can import TaxAct Online returns, TaxAct Desktop returns, and PDF files created in another tax program. When you import a prior year return, anything previously entered in the current return will be overwritten. You need to import the prior year return, […]
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 > […]
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 […]
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 […]
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, […]
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 […]
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.
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: ATX CrossLink […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 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 […]
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. […]
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 […]
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 […]
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 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 […]
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 […]
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 […]
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 […]
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 […]
You can manage your data within your TaxAct account by removing returns or submitting a privacy request to delete certain personal information. Removing a Tax Return (Individual) 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 been e-filed […]
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 […]
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 […]
During the TaxAct Professional Edition setup process, you need to choose to save your files online or locally. For more network setup information, go to our Professional Editions Setup Guide. When you set up TaxAct Enterprise Edition to be used over your local network, you will be prompted to choose two distinct places to store files, […]
If this is your first time filing a tax return, there are a few things you should keep in mind: Talk to your parents. Even if you have earned income, your parents may still be able to claim you as a dependent. Depending on your circumstances, you may need to decide whether they will claim […]
Idaho recently enacted legislation updating how the state conforms to federal tax law under the new tax bill. These changes are retroactive to January 1, 2025, and may affect your Idaho income tax return. Because Idaho adopted most of the federal changes made by the new tax bill: Certain new federal deductions may now also […]
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 […]
As TaxAct Federal editions are updated, details will be added below to highlight what’s new in each release. See https://www.taxact.com/forms for forms availability. 1040 Edition – 2025 Limitations Form 1062 – Deferral of Tax on Gain From the Sale or Exchange of Qualified Farmland Property to Qualified Farmers not released. Prevents e-file and printing. Changes […]
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 […]
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 […]
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 […]
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
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, […]
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 – […]
If your tax return results in a refund, there are several options that you can choose from. 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 […]
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 […]
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 […]
All TaxAct Customer Support: (319) 373-3600 Tax Professional Support: (319) 731-2682 Refer to our Contact TaxAct Service & Support page for support hours.
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 […]
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 […]
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 […]
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 […]
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 […]
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 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 […]
When filing a return, the first year after the taxpayer or spouse has died, you can either import the prior year information into the return, and then make changes, or skip the import process and enter return details manually. If you choose to import the prior year’s information, if the spouse was the deceased you […]
There are several options that you can use to enter or import your stock transactions and information from Form 1099-B. Once entered, the TaxAct program will complete Form 8949 Sales and Other Dispositions of Capital Assets, Schedule D Capital Gains and Losses, and Form 1040 U.S. Individual Income Tax Return, Line 7, as applicable. If […]
Generally, the IRS requires all sales and exchanges of capital assets, including stocks, bonds, etc., to be entered on separate lines on Form 8949, however, the Form 8949 Instructions provide two exceptions to this requirement. Exception 1: When basis was reported to the IRS and no adjustments are needed, totals may be reported directly on […]
Capital gains and losses are reported on Form 1099-B and are automatically carried to Schedule D and/or Form 8949, as applicable. The 1099-B form you received might not report the date acquired or the cost basis, but you are responsible for acquiring and entering that information to properly report the transactions. Sale Dates – If […]
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 […]
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 […]
To get Line 19 of IRS
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 […]
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 […]
Form 4868 is used to request an extension of time to file an individual tax return, Form 1040. Generate and FileTo generate and file Form 4868, follow the steps below. NOTES: Form 4868 is only an extension of time to file, not an extension of time to pay any amount due. If you expect […]
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. […]
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 […]
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: TaxAct Online Dashboard From within the […]
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) Online Dashboard To print a paper […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
If you’ve signed up for Tax Protection Plus program but have decided you no longer wish to use it, you can remove it from your account. Note: If you remove Tax Protection Plus from your account within 30 days of your purchase, you’ll receive a full refund. If you remove Tax Protection Plus from […]
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 […]
“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 […]
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. Desktop To add a new client return in TaxAct Professional Edition: Go to File > Add Client Return or Press Ctrl + N on your keyboard. If your software only has the individual program, a new 1040 return will open without additional […]
To generate and save your return as a Portable Document Format (PDF) file, follow these steps: Ensure Adobe Acrobat Reader is Installed You’ll need Adobe Acrobat Reader to view, print, or save your tax return. Access the Print Center in TaxAct Open your TaxAct return (Online). Click the Print Center dropdown. Select Return from the menu. Specify the Number of Copies In the Federal Copies field, enter […]
To create a new return in TaxAct Online: 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 return to your TaxAct account. Related Links Professional – Adding a New Return in TaxAct Multiple Returns […]
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 […]
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 […]
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, […]
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. […]
Per IRS Publication 501 Dependents, Standard Deduction, and Filing Information, page 10: Dependents The term “dependent” means: A qualifying child, or A qualifying relative. Page 11: Tests to be a Qualifying Relative The person can’t be your qualifying child or the qualifying child of any other taxpayer. The person either (a) must be related to you in […]
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 […]
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 […]
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 […]
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 […]
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. During the initial setup for each preparer, you have the opportunity to assign permissions. Permissions can also be modified any time in Master Information: From within your TaxAct Professional Edition program, click Preparer in the upper menu bar, then hover your mouse over […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 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 […]
In the TaxAct® program, you can attach an approved Form 2553 to your Federal and/or State tax return. When the election is allowed to be attached, the program will prompt you to upload the documentation. An S Corporation election can be attached if: You are electing to be an S Corporation this year S Corporation […]
Every Form 1099-MISC Miscellaneous Income needs to be assigned to one of the following schedules or worksheets: For the self-employed, freelancers, and independent contractors – Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship), For those that own rental and royalty property – Schedule E (Form 1040) Supplemental Income and Loss, or Other […]
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 […]
You are required to file Schedule B-2 (Form 1065) Election Out of the Centralized Partnership Audit Regime if you answer “Yes” to question 31 on Schedule B within Form 1065 U.S. Return of Partnership Income, “Is the partnership electing out of the centralized partnership audit regime under section 6221(b)?” Schedule B-2 (Form 1065) is not required for corporation returns. Per IRS Instructions […]
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 […]
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 […]
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 […]
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 […]
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. […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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’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 […]
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 […]
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 […]
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 […]
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) […]
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 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 […]
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 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 […]
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 […]
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 […]
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 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® 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 […]
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 […]
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 […]
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: […]
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 […]
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 […]
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 […]
To access the Preparer Master Information window: From within your TaxAct® Professional Edition program, click Preparer in the upper menu bar, hover your mouse over Master Information, then click Practice. Available options in the Preparer Master Information window include: Practice Practice Name Practice ID EIN Check if self-employed Address Foreign address Contact information Preparers Add, […]
**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.** 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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
When an S Corporation 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. While the instructions for the 2023 Form 1120-S U.S. Income Tax Return for an S Corporation state the form can be used when filing a short year […]
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 […]
How do I check the status of my client’s refund? 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 […]
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 […]
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 […]
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 […]
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 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. […]
Various functions for TaxAct Professional Editions are toggled on and off through the Preparer Master Information box: 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 window that appears, you can control the following: Filing/Printing Options Print the preparer’s […]
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 […]
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 […]
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 […]
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 […]
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 […]
Information on shareholder basis can be found in the instructions for Schedule K-1 (Form 1120-S) and Form 7203. Per IRS Shareholder’s Instructions for Schedule K-1 (Form 1120-S) Shareholder’s Share of Income, Deductions, Credits, etc. (For Shareholder’s Use Only), page 2: Basis Limitations Generally, the deduction for your share of aggregate losses and deductions reported on Schedule K-1 […]
While the at-risk limitations are calculated on IRS Form 6198 At-Risk Limitations and the passive activity limitations are calculated on IRS Form 8582 Passive Activity Loss Limitations, there is not an IRS form for the potential limitations on the amount of corporate losses that you may deduct based on your basis in the corporation. You would need to enter only […]
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 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 […]
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 […]
Per IRS Instructions for Schedule M-3 (Form 1120) Net Income (Loss) Reconciliation for Corporations With Total Assets of $10 Million or More, on page 1: Who Must File Generally, the following apply. A domestic corporation or group of corporations required to file Form 1120, U.S. Corporation Income Tax Return, that reports on Form 1120, Schedule L, Balance […]
A signed Form 8453 U.S. Individual Income Tax Transmittal for an IRS e-file Return must be attached to a federal partnership or corporation return whenever a taxpayer electronically files a business return without the assistance of a Paid Preparer. A signed Form 8453 authorizes the transmitter to send the return to the IRS. Form 8453 […]
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 […]
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 […]
In Pennsylvania, if the distribution code on Form 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. shows as “7” for normal distribution, then the distribution amount will not transfer to the PA-40 form or be included in gross income on the state return. If the distribution code shows as a “1” or “2” […]
The locality withholding from Box 19 of Form W-2 Wage and Tax Statement does not transfer to the Pennsylvania return. The locality withholding would only transfer to your federal return, Schedule A (Form 1040) Itemized Deductions, Line 5, for itemized deductions. If you have more than two local withholding amounts, you can combine the amounts of your locality withholdings and […]
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 […]
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. […]
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 […]
File the 2024 return for 1065, 1120, 1120-S, 1041, or 990 for fiscal years that begin in 2023 and end in 2024. For a fiscal or short tax year return, fill in the tax year space at the top of the form. See the “Period Covered” topic (“Accounting Period” for 990) in the following instructions: […]
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 […]
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 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 […]
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 […]
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 […]
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 […]
One of the eligibility requirements for the child and dependent care credit states that the childcare must be provided so you (and your spouse if filing jointly) could work or look for work. However, if your spouse did not have a job and had no earned income, you still may take the credit if he […]
To 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 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 […]
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 TaxAct® Desktop and Professional Editions programs can automatically attach state returns for state modules that were installed on your computer. If you don’t need to file for a state that was attached to your return, you can choose not to file for the state and skip the interview questions for that state. You may […]
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 […]
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 […]
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 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 […]
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 […]
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 […]
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 […]
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. […]
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 […]
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 […]
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 […]
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 […]
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 […]
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, […]
How do I contact Santa Barbara Tax Products Group? Existing customers: Call 800-779-7228 Online and new customer contact: Santa Barbara Tax Products Group contact information
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. In TaxAct, you enter your wage information the same way whether you receive Form W-2 or Form W-2C. If you need help reporting the corrected W-2, read our article Form W-2 – Adding, Reviewing, or Deleting. […]
“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 […]
Per the PA Department of Revenue What taxes are imposed on a local level? webpage: Local taxes are not administered by the PA Department of Revenue, but by local tax authorities in each area. For a list and brief description of local taxes which can possibly be levied by a municipality (i.e. borough, township, or city), school […]
Use IRS Form 9465 Installment Agreement Request to request a monthly installment plan if you can’t pay your full tax due amount. The IRS encourages you to pay a portion of the amount you owe and then request an installment for the remaining balance. Form 9465 is available in all versions of TaxAct®. You can file Form 9465 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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. […]
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 […]
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 […]
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 […]
