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My mom got a pension amount and on the 1099R it says taxable amount is unknown.
When entering this into FreeTax I tried to leave the taxable amount blank but it says "the taxable amount is usually the same amount as the gross."
But that certainly wasn't true last year. The taxable amount from this was about 1/4 the gross amount.
There is a complicated worksheet in the 1040 book and I may have to use it. But I didn't have to use it last year with TurboTax. Is this just a shortcoming of FreeTax?
The blank field on a 1099 has nothing to do with FreeTax. Replied to your other thread about this. That 1040 worksheet you referenced will generate the filer's "taxable amount" but it won't parse out specifically to any one source of income. The tax rate (bracket) the worksheet comes up with for the filer will apply to the filer's combined income sources. There may be percentages of your income that are subject to different tax rates.
Last edited by Parnassia; 02-05-2024 at 03:09 PM..
I used the IRS Free File during the pandemic Jan-Feb 2022 tax season to avoid more of a delay in getting a refund as IRS was major delayed for months in backlogged paper returns. The one issue had was had to manually type each of my 1099s, no scan option, so time constraining and so afraid that make a critical typo.
For the Jan-Feb 2023 and 2024 tax seasons, went back to the free fillable pdf paper tax forms typing there which hope IRS has scanning software now or soon once they receive by trackable mail from me. More importantly a couple of days before mailing, I use IRS Direct Pay which my e-bank payment due to them clears by the next day (my tax situation changed from a large refund to a small under $100 owed the last two tax seasons). I am a firm believer of not making an expenditure of dozens of dollars for a tax preparer/accountant or time learning commercial tax software sometimes with bugs. I do mail my return at a Post Office. My state has a very similar process with pdf forms and direct pay which must be in an owe and not refund situation. With mailing then, only SSN and not bank account info on paper return by attaching the paper copy of the direct pay receipt. Once I am done mailing, then only possible contact afterwards if IRS has a question. No problems last year this time, and just filed/nailed my return last week.
Something to consider is withholdings for SS payments. So you don't have to pay a big amount all at once.
I have withholding set up for all my income sources (pension, semi-401K, RMDs and will consider it for SS). Yes, that's handing the government use of some of my money I might have to file to get back each year, but I'd rather do that than face a big tax bill every April. I have hardly any deductions. Historically, the amounts I've chosen to withhold haven't been too outrageously large...my refunds are typically small. Must be doing something right!
FreetaxUSA was actually about a grand cheaper for us. I'm not questioning it. They were cheaper last year too. Screw Turbotax.
This was probably our last year with TruboTax. Stuck with them this time around due to generous offer from one of our CCs, but plan for 2024 is to have ducks lined up in row early and look elsewhere.
Just am fed up with TT's prices and constant shoving various upgrade offer messages in my face as am just wanting to get things done. That and at nearly $200 a pop (combined federal and state submission), don't really see value for money any longer.
Depending upon state of residence there are many offers for free tax online filing.
If worse comes to worse just get the deed done, print out paperwork and mail it before 15 April.
Think many are spoiled for choice with online filing since USPS largely has stopped keeping at least one local post office open until late to accommodate those filing taxes.
Will be interesting to see where "direct file" from IRS goes.
In many other western developed nations treasury or whatever federal office responsible for collecting taxes long has offered some version of direct filing. USA (as usual) is well behind the curve on that score.
Republicans in Congress are dead set against the thing. If DT wins in November and or GOP gain majority in one of both houses of Congress look for war to be declared on "direct file".
Issue is that far more persons today have income from gig economy, self employment and so forth which makes tax filing a bit more complicated. Most free tax preparing services only are good for income below certain threshold and simple returns.
I filed 1040 with Freefile Fillable Forms. It was free. You enter your W2 info into a blank screen with empty fields.
I did not upload or send the 1099 for bonds at all but mentioned it on the 1040 screen.
I filed 1040 with Freefile Fillable Forms. It was free. You enter your W2 info into a blank screen with empty fields.
I did not upload or send the 1099 for bonds at all but mentioned it on the 1040 screen.
Did those bonds generate reportable income, cap gain or loss? Did you report it on your 1040? Intentionally not filing a 1099 could cause you trouble. The least of which your return might be rejected and you'd need to file an amended return. You could also earn yourself an audit. Most concerning is incurring late fees because you didn't file a complete return or an extension request by April 15.
Last edited by Parnassia; 04-17-2024 at 01:25 PM..
The bonds generated interest, yes. No cap gain or loss.
No withholdings.
question about setting up withholdings: you specify a withholding with a dollar amount - wouldn't some people want to specify or percentage instead?
So, you did you report that interest anywhere? The point I was trying to make was: if you did report it but didn't provide the 1099 to back it up, the IRS may spot that and reject your return as incomplete. Refiling late will cost you a penalty. If you didn't report that interest the penalty for underreporting taxable income could be worse.
Taxpayers select how much to withhold based on filing status, exemptions, etc. so it is somewhat discretionary. They can also request an additional dollar amount be added on top.
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Did those bonds generate reportable income, cap gain or loss? Did you report it on your 1040? Intentionally not filing a 1099 could cause you trouble. The least of which your return might be rejected and you'd need to file an amended return. You could also earn yourself an audit. Most concerning is incurring late fees because you didn't file a complete return or an extension request by April 15.