DIY Products

DIY Products

Whether you’re an experienced do-it-yourselfer or doing your own taxes for the first time, this is your place to learn and share. Here you’ll find information and resources for using H&R Block’s online and software DIY solutions. You’ll also find links to more information to assist you on your DIY journey.

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Trusted Pioneer
Posts: 5
Registered: ‎04-11-2018

HELP - why has my Federal and State owed amount changed last minute?

So - my husband and I have been trying to submit our taxes for a couple months now and have run into various issues. Tonight, as we were ready to finally submit our tax return with the H&R Block software, we were reviewing our information and now suddenly the Federal Owed amount and State Owed amount has decreased drastically. 

 

We converted funds ($5,500) from a Traditional IRA to a Roth IRA since we were notified that our income was too high to deduct an IRA Contribution this year. Then we were told by H&R that since this was a conversion (not recharacterization), that we would have to report it as a Traditional IRA. Now for some reason last minute, the tax program is giving us the deduction and our taxes owed have gone way down. I double checked on Turbo Tax and this is not the case. 

 

WHYYYYYY are there so many issues? This seems incorrect to me. Do we go ahead with submitting our tax returns? I cannot wait another 2 hours to try and "chat" with another representative who gives me contradictory information. 

 

Pleaseeee someone help save us! 

Council Member
Posts: 548
Registered: ‎04-06-2016

Re: HELP - why has my Federal and State owed amount changed last minute?

I don't know why you're experiencing these issues.

Things you should know:

1) Yes, you'll report the Trad-IRA contribution on your 2017 tax return as a non-deductible contribution. 

2) The conversion won't be considered on your 2017 return at all. Since you converted the amount in 2018, you'll get a 1099-R in the first couple months of 2019 for this conversion and any taxable amount will show up on your 2018 return filed by April 15, 2019.

3) If you can look at the forms in your return, you can see if the program is handling this correctly. 

     a) 1040 Ln 32 will report any amount it's taking as a deductible contribution.

     b) Form 8606 will show any non-deductible amount.

     c) If you have the option to print the return with all worksheets, you can probably see the IRA worksheet where it does the calculations to figure out what part of the contribution is deductible.

 

Karen

 

 

Trusted Pioneer
Posts: 5
Registered: ‎04-11-2018

Re: HELP - why has my Federal and State owed amount changed last minute?

My concern is the software is now giving us a deduction in our taxes owed, even though our AGI is more than $119,000. 

 

There is no option to choose deduction or non-deduction when going through the questions in the software. We enter $5,500 for the Traditional IRA contributions and we are automatically given a deduction. 

 

It seems as though the software is failing. If we open up the link for more information regarding Traditional IRA deduction, it even states that the deduction "is eliminated altogether when your AGI is more than $119,000."

 

Form 1040, Ln 32 is showing IRA deduction $5,500 

Form 8606 now shows 0 

 

Why are we being given a deduction now? And why is Turbo Tax giving us the original amount owed, but this one has changed?

 

I do not feel confident in submitting our tax returns with this incorrect information. 

 

Thank you.

Council Member
Posts: 548
Registered: ‎04-06-2016

Re: HELP - why has my Federal and State owed amount changed last minute?

With the info you've provided, you are correct that what the program is doing is wrong. I, too, would be not be confident in the program in your situation.  


Unfortunately I'm at a loss to what to suggest you do.

 

Karen

Pioneer
Posts: 1
Registered: ‎05-07-2018

Re: HELP - why has my Federal and State owed amount changed last minute?

If it makes you feel any better, I went to H&R block and had them do my amendment, and not only did they mess up on it in regards to the Federal portion of it, but they didn't even do the State part as well either. I went there and had them do the original Taxes and paid for Peace of Mind, only to find out despite filing the claim because they messed up on my taxes, they may not reimburse me in spite of their mistake. I have no problem paying my taxes, I have a problem paying it with late fees acquired due to their incompetence. I don't even know what I owe on state, but I do know that according to their website it says, and I quote; "If we make a mistake on your return we'll pay the penalties and interest". So far though, I am the one paying and they don't seem to be taking any responsibility at all for their mistake despite their claims of paying if they make a mistake. Once I am resolved with them I am going to Jackson Hewitt next year because they have lost my confidence completely.