New Vehicle Sales Tax on 1040

[LisaAnn]

Hi,

I just ran across an issue I had with a tax return and wanted to make you aware of a glitch in the software.

I thought I was finished with a return: basic W-2, Sch. D, interest, and filing for the new vehicle sales tax deduction on Sch. L. No problem. Then the client called with some additional deductions that would be included on Sch. A. This created higher itemized deductions than the standard deduction, so of course we wanted to itemize at this point. After entering all of the additional deductions on Sch. A, I did an error check and no errors were found. I automatically assumed (which I shouln't do) that the software would move the new vehicle sales tax deduction over from the Sch L.(since we were not using it there now) to the the Sch. A. It did not. Just something to watch when preparing your returns.

Happy filing everyone!

[SUE A.]

I HATE WHEN THAT HAPPENS!

[TAXBILLY]

Also be careful of the situation where a Schedule A is generated and RE tax in entered.

Then if you decide you want to go to the standard the RE tax does not automatically go to Schedule L.

taxbilly

[Pacun]

I efile all my returns whenever possible and I avoid this type of issues.

On returns with the 8K FTHB credit, I prepare the return and I create the efile. Then I invoke the extra form for the 8K credit and paper file.

[taxperson]

I efile all my returns whenever possible and I avoid this type of issues.

On returns with the 8K FTHB credit, I prepare the return and I create the efile. Then I invoke the extra form for the 8K credit and paper file.

You're paper filing an amended return, right?

[Pacun]

You're paper filing an amended return, right?

No, I prepare the return without the 8K credit. I create an efile file and then I add form 5405 and print return to be mailed.

[HV Ken]

Our clients so far have expressed an interest in not waiting for the TAT on the first time home buyers credit.

So we do the two step:

1) e-file return w/o the credit

2) amend to get the $8000 credit

[David1980]

No, I prepare the return without the 8K credit. I create an efile file and then I add form 5405 and print return to be mailed.

Wouldn't that create two original tax returns for the taxpayer?

[Pacun]

Wouldn't that create two original tax returns for the taxpayer?

Not really, I work on the return without the 8K credit, create efile files for both federal and state. Any errors or missing forms will pop up at that point. After I create the efile files I keep working on the same client and I open form 5405 and finish the return. As soon as I print my efile files are marked as rejected. I prepare the package and mail it. I hate to amend returs and I only do it when necessary.

I also tell my clients... "if for any reason, your refund is too late and you don't need the money anymore, please donate it to a non-profit organization". So far, my only two clients with 8K credit have accepted.