ATX tax calculation not working properly

[Pacun]

My friend did his taxes using Turbo Tax and I tried to verify everything was OK.

MFJ AGI is $149,790.

Tax liability using Turbo Tax was $30,196

Tax liability using ATX was $29,626

Hand tax calculation using tax rate schedules for 2009 was $30,204.

Could you please let me know if my Pentium 4 Chip is calculating it wrong?

[TAXBILLY]

Why do you assume Turbotax is right? http://www.nytimes.com/2010/04/07/business/07tax.html?partner=rss&emc=rss

Was there any qualified dividends?

taxbilly

[Pacun]

ATX is using Alternative Minimum tax. I thought AMT was only used to increase your taxes in case you were deducting too much.

[kcjenkins]

It's impossible to calculate from just AGI alone. Depends on what made up that AGI. For example, if you do MFJ, no children, and put the $149,790 on line 21, you get a tax of $25,148. Put the whole $149,790 on a W-2 and you get tax of $25,148 LESS 800 on line 62, for a net of $24,931 . Put it on Sch D as a sale of a zero basis longterm asset, and you get a tax of $9,479. Put 100K on a W-2 and 49,700 on sch D and you get a tax of $20,658. Etc.

You did not even make clear whether that amount was from line 46 or line 60. Any credits? Anything on Line 36? ????

[Terry D EA]

I agree with KC. You have too many unanswered questions and certainly not enough information to make a comparison. Alot of different items can trigger the AMT which is a horse of a different color to deal with. I would never assume any package is right or wrong without all of the information surrounding the client's income and expenses.

[Pacun]

I will post the figures later on, but are we on agreement that if the ATX uses AMT it is because under the regular tax system the TP is getting away with too much? Which means that AMT will result in a bigger tax liability.

[Pacun]

I found the problem mia culpa.

My friend sold stock for 200 and the basis was 423. Since I was doing just a sample return, I click override and enter -223 on line line 13 where schedule D goes. That drove ATX bananas and instead of using that tax table, it used alternative minimum tax.

Lesson I learned: If you need to override something, prepare the return and print it before the override and then compare. In this case, even if I lowered the W-2 from 206K to 79K, the program was giving me the wrong results. When using 79K, the error was very obvious.

[fredazcpa]

And that is the reason when family and friends ask me to look at their "self Prepared" I tell them without the detail, the math is correct, but there are too many moving parts to make sure they have done it correctly. And if they what me to review the return make an appointment and bring your check book and my hourly rate = and It will take a min of 1 hour to review the return.

Usually they say that is ok, and when the IRS sends them a notice, I see them next year and they are happy to have me prepare their returns.