This is my second year using Turbo Tax, and likely the last year.

Round and round I go with a $600 royalty check I received for a couple of patents I worked on in grad school. Turbo Tax is dead set on me reporting this income twice. Once as part of the "Rental Properties and Royalties" section and a second time under "Business Item."

What a waste of my time!

Are you using the online or download version? I'm familiar with the download and might be able to spend a few minutes getting this fixed.

I'm using the Deluxe edition I purchased at Costco. When I started it up a few hours ago, it downloaded an update. Problems still persist.

As a Tax Professional; If you received a 1099 Misc with $600 in Box 2 or 3, make sure the $600 appears as Other Income on the 1040. Or else you will also incorrectly pay Self-Employment Tax on the $600.

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Originally posted by Anush:
As a Tax Professional; If you received a 1099 Misc with $600 in Box 2 or 3, make sure the $600 appears as Other Income on the 1040. Or else you will also incorrectly pay Self-Employment Tax on the $600.

Anush, Thank you. This is exactly what is happening. I just can't figure out how to make TurboTax reflect this.

On different, yet related subject. At what dollar value does interest earned in a savings account generate a 1099-INT?

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On different, yet related subject. At what dollar value does interest earned in a savings account generate a 1099-INT?

Ten bucks.

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On different, yet related subject. At what dollar value does interest earned in a savings account generate a 1099-INT?

Whatever the bank/brokerage house programs the computer. I haven't checked IRS rules recently, but it was $15 the last time I looked. Any 1099INT issued will show on your IRS transcript. Just report everything, the tax is low or zero, dependent on income.

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Anush, Thank you. This is exactly what is happening. I just can't figure out how to make TurboTax reflect this.

That is why you give it to a professional. I do not try to be an Engineer, so why should an engineer try to be an Accountant. My Tax software costs $2500 a year, not $50 at Costco.

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That is why you give it to a professional.

And make sure they really ARE a professional. Only four states require any kind of training or certification to hang out your shingle and call yourself a "tax preparer". A good percentage of them are just folks who bought the software and really don't do anything more than punch in the numbers.
If you're dealing with a CPA or an Enrolled Agent, you can be pretty sure they know what they're doing.

Why anyone attempts to do their own tax prep is beyond me. We file jointly and it costs about $155.00. I'd bet my pension that she finds me far more in deductions than I pay her.

I feel just the opposite after having been ripped off for around $500 for a refund that was around $1000.

We had a rental property and a new baby and dummy me thought going to a CPA was a good idea. It wasn't.

Now I use TurboTax Premiere which covers rental properties and it's easy to knock out our taxes in one night.

It depends on your situation. I had a CPA who was a total jerk. Comfortable with who I have now. I have a tendency to call a professional for a lot of things. Finding a good one in any field takes time. I am happy with my physician, accountant, current broker and yard guy. I have had unpleasant experiences in the past. They have all saved me time and money.
I have limited mechanical skills so I hire somebody. I can usually tell if they are doing things properly since my Dad always fixed stuff and I was the "hold it guy". It might take him ten trips to the hardware store and plenty of screaming and yelling but he got it done. He used to do his own taxes and that was Hell for the three or four days he was working on them. I also consider collateral damage in these situations, ie family members.

I used a CPA for about 5 years, and I didn't like the way he "earned" his fee. I went to Turbotax over a decade ago, and it's been smooth sailing. A few tricky years with multiple jobs and other things for us both, but the past few years have been simple.

I have been using Turbo Tax for almost 20 years. I have a complex tax situation and it did take some research on my part, but I've been pleased with Turbo Tax. I like it and will continue to use it.

I'm with Arty. I've used Turbo Tax even when it was still Parsons Technology. Before that, I did my own taxes manually by reading the publications.

My tax situation has gone through complicated stages through the years, mortgage deductions, side businesses, buying and selling stocks with short and long term gains, etc.

Why do I do it instead of taking it to a CPA? For the same reason some of you guys work on your own cars, remodel your houses, do your own plumbing whereas I pay a professional to do all those stuff for me. You do the things that you know you have the knack for and you pay someone to do something that you would likely make worse.

To the OP, I don't understand why Turbo Tax is making you report the income twice. You're the one in control of where you report your income. I'm not particularly familiar with "Rental Properties and Royalties" but if that is a specific IRS section and you consider the royalty as not being part of any business you run, then don't report the royalty check in the business section.

If you use the interview process, decide where you want to report that income correctly. When you get to that section and it asks you for any income related to the royalty, then put the number there. When you get to the second section just don't report it.

Of course, as I'm writing this, there is the possibility that it asks you, "Did you receive any royalty income for patents?" You answer the question. And then you find the income reported twice. One way you can check if this is true is going through the whole process first, then looking to see if your Adjusted Gross Income or even Gross income is overstated by $600. If it's not being double counted, then I don't see it as a problem; it could just be the way Turbo Tax is tracking the income for its record keeping and the way you're interpreting it.

if the royalty income is, indeed being double counted, then I would be frustrated as you. In that case, you may have to call Turbo Tax for support.

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Originally posted by Rey HRH:
To the OP, I don't understand why Turbo Tax is making you report the income twice. You're the one in control of where you report your income. I'm not particularly familiar with "Rental Properties and Royalties" but if that is a specific IRS section and you consider the royalty as not being part of any business you run, then don't report the royalty check in the business section.

If you use the interview process, decide where you want to report that income correctly. When you get to that section and it asks you for any income related to the royalty, then put the number there. When you get to the second section just don't report it.

Of course, as I'm writing this, there is the possibility that it asks you, "Did you receive any royalty income for patents?" You answer the question. And then you find the income reported twice. One way you can check if this is true is going through the whole process first, then looking to see if your Adjusted Gross Income or even Gross income is overstated by $600. If it's not being double counted, then I don't see it as a problem; it could just be the way Turbo Tax is tracking the income for its record keeping and the way you're interpreting it.

if the royalty income is, indeed being double counted, then I would be frustrated as you. In that case, you may have to call Turbo Tax for support.

I believe I got it figured out now. Basically, the hints they have programmed in were leading me astray. From previous 1040s, the royalty was filed under schedule E. The hints I was given kept resulting in schedule C, which resulted in the secondary tax liability as part of a private business.

I used a cpa for a number of years, but I never thought the $450 was worth it due to my simple tax status. The only complication I have is this stupid royalty apparently.

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Originally posted by HuskySig:

I believe I got it figured out now. Basically, the hints they have programmed in were leading me astray. From previous 1040s, the royalty was filed under schedule E. The hints I was given kept resulting in schedule C, which resulted in the secondary tax liability as part of a private business.

I used a cpa for a number of years, but I never thought the $450 was worth it due to my simple tax status. The only complication I have is this stupid royalty apparently.

I'm glad you figured it out. It helps if you have a basic understanding of how the tax system work. For example, filing any income under schedule C does NOT result in a secondary tax liability. The net income you end up in schedule C just gets rolled up to your total income which then forms the basis of your tax rate.

The benefit of Schedule C is to capture business expenses you incur to generate the income and to net those expenses out. For example, when I was teaching professional certification classes, I was able to deduct my membership fees for the professional organization, the cost of maintaining my own certification, and other expenses.

And also, I don't know about the "hints." I just go through the whole interview process and let it guide me through the different sections. It asks if I got a W2, railroad pension, social security, etc. I just say no to the sections when I don't get railroad pension and it skips that section.

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Originally posted by MMSIG229:
Why anyone attempts to do their own tax prep is beyond me. We file jointly and it costs about $155.00. I'd bet my pension that she finds me far more in deductions than I pay her.

I'll bet you that. How long have you been using her. And how much has your life changed over the years that are tax-related? It's a good bet that if you're paying only $155 that your tax situation isn't too complicated and that it hasn't changed over the years.

That means you're paying her $155 for the deductions she already found for you the first time. She's not getting you any new deductions each year.

On the other hand, Turbo Tax costs about $50 to $75. So you're only paying $75 to $100 more for the convenience. That isn't too bad of a price either.

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Originally posted by HuskySig:

quote:

Originally posted by Anush:
As a Tax Professional; If you received a 1099 Misc with $600 in Box 2 or 3, make sure the $600 appears as Other Income on the 1040. Or else you will also incorrectly pay Self-Employment Tax on the $600.

Anush, Thank you. This is exactly what is happening. I just can't figure out how to make TurboTax reflect this.

On different, yet related subject. At what dollar value does interest earned in a savings account generate a 1099-INT?

FWIW, H&R Block Software handles this very easily.