TaxAct Users

[Chief]

In using TaxAct evaluation package for 2009 returns I have run across something that I don't understand. In using their simplified method worksheet to compute the taxable portion of a pension I notice that the method does not correspond with the IRS simplied method given in the IRS 1040 instruction manual. The ages of the pensioner and his beneficiary are given separately in TA and not together as in the IRS manual and the result is smaller separatly than jointly. That is the amount of the pension tax free is smaller with the TA computation.
I always thought the end result of different softwares would be the same.
Somethings is not right here. That Taxwise and the TaxAct results are different.
What's wrong.

[DonPriebe]

Can't duplicate problem

In using TaxAct evaluation package for 2009 returns I have run across something that I don't understand. In using their simplified method worksheet to compute the taxable portion of a pension I notice that the method does not correspond with the IRS simplied method given in the IRS 1040 instruction manual. The ages of the pensioner and his beneficiary are given separately in TA and not together as in the IRS manual and the result is smaller separately than jointly. That is the amount of the pension tax free is smaller with the TA computation.
I always thought the end result of different softwares would be the same.
Somethings is not right here. That Taxwise and the TaxAct results are different.
What's wrong.

I just tried a calculation with starting ages of 65 and 35 and got the same answer in TaxWise and TaxAct. What were the parameters that you used when you got the different results?

[FEDUKE404]

No problems noted

You need to pay careful attention to the lines/boxes in the TaxAct worksheet.

Be sure you enter the correct age(s) as of the starting date for the annuity.

There are instructions as to what to do for "first" year vs subsequent years.

You must also make an entry in the box for "number of months payments received" for the calculations to function.

I cannot imagine TaxAct having a problem with such a reasonably simple calculation, assuming the initial data input was correct.

FE