Plowing through the tax return, using HRBlock program; and near the end came upon this, to select one of the choices. The below bold text is as written in the program:
To combat stolen-identity tax refund fraud, the IRS and some states are requesting additional information this filing season, including state identification information. Omitting any of this information may cause delays in processing the tax return or may cause your return to be rejected.
What type of ID do you have?
1. driver's license number
2. other state issued ID
3. I don't have a driver's license or state issued ID
4. I don't want to provide my license or ID SAY WHAT ???
EDIT: I changed search terms/wording and did discover this from Feb. 2017 regarding this topic. The write appears to apply to E-file and more directed towards state returns. However, compliance appears to be moving towards Federal level or that our software knows we'll be filing state, too.
Additional ID requirements.Is Turbo-Tax or other tax software also making this request?
Thank you in advance for any insight.
Regards,
Catch
Comments
TurboTax also prepared the state return. On that one a refund will go via direct deposit to my credit union. Again - not aware of any ID requests. Of course, they have the CU account and routing number so can easily verify identity.
I’d be loath to file electronically after this year. Need time to proof read the paperwork Turbo churns out. This year it failed to detect that a hefty amount of state income tax had been withheld from my pension. Would have cost me around $1500 had I not caught the omission and re-worked the state return (partially by hand).
Regards,
Ted
I've notified Fidelity that the amount in box 1A that gets downloaded into TurboTax doesn't exactly match the amount on their pdf 1099-DIV.
Sure it's only a penny difference, but still one of these is right and one is wrong. Since I reported this to Fidelity a couple of weeks ago, they've been working with Intuit to identify the cause. They agree that in reality there is just one unique precise value.
While they (and I) believe the discrepancy is caused by a rounding error, it's disconcerting that the value is inconsistent. (I corrected the value that TurboTax imported.)
I can't help but think that had their system been built in COBOL (a business language designed for base 10 financial calculations) this wouldn't have happened.
Picture this. S9(9)V99 COMP-3
We did have some tax issues 2015 was audited and hired a CPA, we had to disclose all our paperworks, taxations, 1099k, statements, even our driver license and place we live/ Birth date, everything to cpa to be processed properly. Think its a formality to disclose all those findings to HR block or other firms I believe...
Another Questions [mabye @MFS or others know about private investments]: About tax and investments accounts- can you get tsp, sep-ira, and private roth-ira [can you get all 3 accounts at same time]? Feel like we have to ask this questions to our Cpa but everytime we stop by he charges us 300 bucks...will give fundings to MFO instead. What the max distributions - 55K for sep-ira and 5.5k for 2018 fundings right?
What is the most preferred accounts you folks use for 401K - we have merrill edge and schwab both opened but may use merrill edge because all tradings are free]
Maybe @Ted's invesetments are all in muni bonds, dont need to pay taxations to uncle SAM but get 4.5% YTM every yr
thank you so much
We all place a lot of faith into the electronics with which we are involved, eh?
We've processed our taxes from the way back days; as we've not had a need to use a CPA and related; although we have had some fairly simple business uses over the years. We've learned a lot over the years, from the time when one could obtain most of the paper forms from the post office or a local library....
I agree your situation appears to deal with number rounding.
We've used TT in the past and find this and the HRBlock programs to be satisfactory for our simple needs today.
We don't download any data; and even though all of our numbers input is manual, we always do the simple math to assure the program totals match our calculator numbers.
One slightly odd set of questions and choices set this year with the HRBlock program revolved around the Michigan tax form. For certain age ranges in Michigan, one is able to exempt various amounts of retirement income, as well as SS monies from taxes.
With inputs into appropriate sections defining where various types of income arrived; one could assume the "program" is aware of what income types would be exempt. The program already knows our ages, and thus is able to do the math of how much may be exempted from taxation based upon ages in our household.
The "quirk" was that the potential exempt income sources were shown in a list and the program user had to manually select which income should be exempt and type into an entry block the total value to be exempted. In our case, and I suspect most everyone else; the total was 100%.
I suspect this has become a legal aspect from a problem in the past. As in, you; the taxpayer instructed the program to exempt these monies and the amount to exempt.
The program should have been more intuitive with this section, IMHO.
I can see problems with this, as some folks may choose to exempt wrong sources or wrong amounts from lack of understanding; potentially creating either an over or under payment of taxes.
Oh, well........always a learning process; and I somewhat enjoy the knowledge gathered.
Regards,
Catch
Regarding retirement plans: They basically just fall into two categories, employer plans and individual plans. TSPs, 403(b)s, 401(k)s, SEPs, SIMPLEs, etc. are employer plans. "Regular" IRAs (traditional and Roth) are individual plans.
If you've got more than one employer, you can usually participate in each one's plan. So you can have a 401(k) with one employer, a SEP with another, a 403(b) with a third. They don't affect your ability to open/fund pesonal IRAs, though they may affect your ability to deduct IRA contributions.
On the employer plans, there are per-plan (employer + employee) limits, and one combined limit (the familiar $19K + catch-up limit on employee-side contributions). On the individual side, there is one cross-IRA (combined) contribution limit, $6K + catch-up.
A nice thing about 457 plans is that you can have those side by side with 403(b) plans at the same employer and each one has its own limit.
Here's a column by Kitces that covers the subject of simultaneous employer plans pretty well.
https://www.kitces.com/blog/coordinating-contributions-multiple-employer-sponsored-defined-contribution-plans-401k-defined-benefit/
In New York, it doesn't help with 414(h) or 125 deductions. Sometimes these amounts are deductible in NY, sometimes not, and it's up to the taxpayer to know the answer. In Delaware it doesn't seem to understand that Virgin Island muni bonds are tax-free.
Basically I just do the state form on a spreadsheet and coax TT's numbers to match. I've started importing tax forms because that's likely to prevent a typing error on my part. However, I always verify every figure, every description that is downloaded. I often wind up changing the descriptions to provide more detail.
Though outside of the topic of this post; you note:
"What is the most preferred accounts you folks use for 401K - we have merrill edge and schwab both opened but may use merrill edge because all tradings are free]"
---Those with a 401k, 403b, etc. use whatever vendor is available through their employer plan, yes? Your question, as I read it, does not have a "right" answer.
We probably likely go w/ merrill-edge because of their available stocks etf/high grade bonds and free tradings
likely will save few pennies here and there w/ these vehicles from uncle Sam
SEP IRA: "Merrill Edge offers participants simple, flat-rate pricing of $6.95 per online stock and ETF trade.* If you're a sole proprietor, learn how to qualify for $0 trades".
401(k): Per plan monthly administration fee ($20), per participant monthly record keeping fee ($3), etc.
Personally, I use T. Rowe Price for my individual 401(k) because it cost nothing and provides a Roth option. Since I opened that account, Vanguard has started a similar service which I'd also look at. If you're talking about a brokerage window in an employer plan over which one have no control, then as Catch wrote, one uses what's available. That's not a question of what one prefers.
For 2018 distributions, you are right 5500 dollars < 60 yo and 6000 for > 60 yo for Roth or regular 401K, and 55K max for sep-ira, for me total ~ 60.5k tax shelter from 2018
https://www.nerdwallet.com/reviews/investing/merrill-edge
"What is the most preferred accounts you folks use for 401K - we have merrill edge ..."
" I called merrill edge. their fees are free if you have sufficient funds ..."
Merrill Edge is not the best place to call for their 401k plan fees. Merrill Edge contracts out its individual/small business 401k plans to a TPA, Plan Administrators Inc. (PAI). Their plans include a conventional laundry list of mutual funds (selected by another third party, Morningstar), and do not include a brokerage window. So of course there are no brokerage fees. There are a setup fee and annual plan and per-participant fees as I described previously. These are not waived because there are two third party companies involved who need to get paid.
This information is from a call I just had with PAI, using the number for 401k plans shown on Merrill Edge's individual 401k page:
https://www.merrilledge.com/small-business/individual-401k
"For 2018 distributions, you are right 5500 dollars < 60 yo and 6000 for > 60 yo for Roth or regular 401K"
Those are contribution limits for Roth or regular IRAs. Catch ups in IRAs (and 401(k)s) are allowed starting at age 50.
Let's try going through this again, slowly and carefully ...
SEP IRAs: Only employers can contribute money (no employee contributions). For sole proprietor/partnership/LLC (not taxed as corp), that's capped at 20% of net profits.
In 2018 the max is $55K, meaning net business profits of $275K or better. (We'll use this figure later.)
TSP (like a 401k): employee side is limited to $18,500 in 2018. Technically, employer + employee max for 2018 was $55K, but as the linked TSP Bulletin notes, "civilian participants are rarely affected by" this limit, i.e. the government rarely adds that much extra.
It does, however, offer a 5% matching program for participants in the Federal Employees Retirement System.
Given the significant earnings in the SEP business, let's use a round figure, $100K as the government W2 pay. That makes the estimated matching contribution here $5K.
IRAs: The 2018 contribution limit is $5500 per spouse (even if the second spouse has no income). That makes the limit $11K per couple.
However, with a net business income over $275K (we're assuming the SEP IRA is maxed out), it is highly unlikely that MAGI will be below $199K. So direct Roth IRA contributions will be disallowed. But this money can still be coaxed into a Roth IRA via a nondeductible contribution to a traditional IRA followed by a conversion (back door Roth).
(There are above the line ways to reduce MAGI, including the qualified business income deduction, self-employed health insurance, and of course deductible SEP IRA contributions.)
In short, we have: $18.5K (employee-side contribution to defined contribution plan) + $5K match (estimated) + $55K (employer-side self-employed contribution) + $5.5K IRA (back door Roth) = $84K + $5.5K spouse IRA.
As I posted previously, the $55K max is a per (employer) plan limit, so one can max out both a TSP and a self-employed SEP IRA without worrying about a combined limit.
https://www.kitces.com/blog/coordinating-contributions-multiple-employer-sponsored-defined-contribution-plans-401k-defined-benefit/
I'm not concerned with the penny, I'm concerned with the fact that their computers came up with different numbers and they can't explain why.
My theory: Worry about the little things and you won’t have as many big things to worry about.
Because there is no ambiguity. I received so many dollars and cents from each fund each time it distributed a dividend. When those dividends were paid into my MMF I never was paid a fraction of a penny. Take those payments and add 'em up.
Can't different algorithms written by humans be slightly different (even at the same company)?
(A + B) + C equals A + (B + C). Precisely. Regardless of what algorithm is used. Add up dividends received in dollars and cents and you get dividends in dollars and cents. No mils, nothing to round.
It's one thing to say that floating point calculations coded sloppily often produce different results, but fixed point calculations must always produce the same result. Thus if results are different, at least one must be wrong.
Think integer arithmetic. You would never say that 23 + 45 = 68 give or take 1.
It doesn't matter whether that is $23 plus $45, or 23¢ plus 45¢.
The why doesn't seem that strange to me.
You're assuming the discrepancy is due to a rounding error. Without knowing how the error arose, how can you be certain? If you are not sure, then how do you know that the program won't produce more sizeable errors?
Even if the cause is a rounding error, you've assumed a lot more than I did when I wrote to Fidelity.
I suggested that while it was possible they were running two different sets of software to generate the figure they reported to me and the figure they reported to Intuit, it might just as easily be the case that there was a bug in the transmission software, or in the rendering software. That is, a correct, unique value may have been computed, but sent incorrectly to Intuit. Or both Fidelity and TT might be working with the same correct value but they displayed it differently in the 1099 pdf file and on the TT screen.
Edit: From M*'s Fidelity forum: "Got a letter today from Fidelity that data downloaded, electonic import function to TurboTax was in error. Some data is duplicated. Paper copies are correct."
More numerically significant? Sure. However, each incident is indicative of the need to verify all imports because one cannot trust the data imported by Turbotax.
https://www.bloomberg.com/news/articles/2018-07-23/trapped-in-new-york-salt-cap-haters-find-moving-isn-t-that-easy
Great Miscalculations - The French Railway Error and 10 Others
https://www.bbc.com/news/magazine-27509559
Then you ask me to "argue" that the sky is not blue.
You're equating a question about an internally consistent abstract system (arithmetic) to a question about physics or biology (do all people perceive colour the same way) or a philosophical one (is perception the same as reality).
Perhaps you'd care to explain why there isn't a unique right answer to the value of dividends I (or you) received in 2018.
---
FWIW, the sky "is" blue only if one holds that perception is reality.
I prefer to think that an object's colour is objectively defined by the frequencies and intensities of light received from that object, rather than by how that light is perceived. An object has a unique colour whether perceived by you or by someone colourblind; I received a well-defined, unique amount of dividends in 2018 regardless of how Intuit's software perceives it.
Since this is a financial forum, here's an article from The Capitalist Tool (Forbes) explaining that as far as the colour of the sky is concerned, perception diverges from reality.
https://www.forbes.com/sites/briankoberlein/2017/01/11/earths-skies-are-violet-we-just-see-them-as-blue/
I remember the President Clinton quote (in response to the question about Ms. Lewinsky) :
“It depends on what the meaning of the word ‘is’ is.”