Claudia Buck for the Sacbee writes: Reader Question: I refinanced my mortgage in 2012, which left a points balance that I had not yet fully deducted over the life of the loan. The IRS says I can deduct the remainder all at once in 2012 -- unless I refinanced with the same lender. Which I did. However, TurboTax and other online software programs do not make provision for a refinance with the same lender, instead, they are giving me the entire deduction for the points from my previous loan. In reality, I need to combine the points remainder with my new points -- and deduct all of them over the life of my new loan. I can juggle the numbers to make my return come out right (i.e. fake out the tax software), but I am thinking it might be safer to fill out the paper forms and mail them in. Advice? Thank you.
Answer: All tax preparation software has limitations, in my experience. When I run into such a limitation as you describe in your question, I "work around" the limitation in order to get the correct result, attach an explanation of the "work around" and file the return electronically. This is preferable to filling out and filing a paper return for two reasons: 1. Less chance of making an error in the preparation of the return, since I am relying on the software for all of the various arithmetic computations that need to be made and the safeguards built in to the software. 2. Less chance of processing errors by the tax agencies since the return will be processed digitally rather than by humans. The tax agencies prefer that you file your return electronically for the same reason plus it's cheaper for them to process returns electronically.
About the only time I prepare a paper return for filing is when the return can't be filed electronically because of an unsupported form or other limitation imposed by the tax agencies, or I am filing a return that requires special handling and I want a person at the tax agency involved in processing the return. This arises when filing separate returns in which community income, deductions and withholding are being allocated between spouses or registered domestic partners. Even then I use tax preparation software to prepare the return to the greatest extent possible for efficiency and to minimize errors.
Read more here: http://blogs.sacbee.com/personal-finance-ask-the-experts/2013/04/should-i-override-my-tax-software-or-file-a-paper-return.html#storylink=cpy
Read more here: http://blogs.sacbee.com/personal-finance-ask-the-experts/2013/04/should-i-override-my-tax-software-or-file-a-paper-return.html#storylink=cpy
A: All
tax preparation software has limitations, in my experience. When I run into such a limitation as you describe in your question, I "work around" the limitation in order to get the correct result, attach an explanation of the "work around" and file the return electronically. This is preferable to filling out and filing a paper return for two reasons: 1. Less chance of making an error in the preparation of the return, since I am relying on the software for all of the various arithmetic computations that need to be made and the safeguards built in to the software. 2. Less chance of processing errors by the tax agencies since the return will be processed digitally rather than by humans. The tax agencies prefer that you file your return electronically for the same reason plus it's cheaper for them to process returns electronically.
About the only time I prepare a paper return for filing is when the return can't be filed electronically because of an unsupported form or other limitation imposed by the tax agencies, or I am filing a return that requires special handling and I want a person at the tax agency involved in processing the return. This arises when filing separate returns in which community income, deductions and withholding are being allocated between spouses or registered domestic partners. Even then I use tax preparation software to prepare the return to the greatest extent possible for efficiency and to minimize errors.
Read more here: http://blogs.sacbee.com/personal-finance-ask-the-experts/2013/04/should-i-override-my-tax-software-or-file-a-paper-return.html#storylink=cpy
A: All
tax preparation software has limitations, in my experience. When I run into such a limitation as you describe in your question, I "work around" the limitation in order to get the correct result, attach an explanation of the "work around" and file the return electronically. This is preferable to filling out and filing a paper return for two reasons: 1. Less chance of making an error in the preparation of the return, since I am relying on the software for all of the various arithmetic computations that need to be made and the safeguards built in to the software. 2. Less chance of processing errors by the tax agencies since the return will be processed digitally rather than by humans. The tax agencies prefer that you file your return electronically for the same reason plus it's cheaper for them to process returns electronically.
About the only time I prepare a paper return for filing is when the return can't be filed electronically because of an unsupported form or other limitation imposed by the tax agencies, or I am filing a return that requires special handling and I want a person at the tax agency involved in processing the return. This arises when filing separate returns in which community income, deductions and withholding are being allocated between spouses or registered domestic partners. Even then I use tax preparation software to prepare the return to the greatest extent possible for efficiency and to minimize errors.
Read more here: http://blogs.sacbee.com/personal-finance-ask-the-experts/2013/04/should-i-override-my-tax-software-or-file-a-paper-return.html#storylink=cpy
0 comments:
Post a Comment