2013 Tax Filing - TurboTax Usage Experience

The filing went really smooth again this year and we had the added benefit of TurboTax offering to complete the FBAR forms - this is a form that needs to be filed separately with the Department of Treasury every year by June 30th, if you have foreign accounts whose total value at anytime exceed $10K. TurboTax also helps with the 8938 form (to report foreign assets $400K or over for outside US residents and $50K or over for US residents). As before, previews before filing are available but not at an obvious location: to access the screens, click on Tools in the upper part of the screen and then go over to "View Tax Summary". On the side of the resultant screen, there is a button for "Preview 1040" which lets you look through the actual 1040 form before filing. Below are a few glitches we encountered:
  1. In the 1099 screens, TurboTax asks what portion of the total dividends reported in 1099 are foreign dividends for which taxes were withheld - this is not obvious and some 1099s do not have the info and so you end up having to manually calculate this. 
  2. Clicking through the foreign earned income exclusion screens was also a breeze although there were a few issues: For our level of income, there were a large number of screens that did not really apply to us and so was a drag. Also, there is a section on "deductions related to Foreign Earned Income" were the first item is pre-filled with "self-employment tax" filled with a link that says "this may need adjusting" - the design was probably better if it was not pre-filled but instead a suggestion was made to consider taking that deduction.
  3. If you did file with TurboTax last year and you had 1099-MISC forms, there is an area of confusion this year: After entering the income, this amount shows up as zero. Clicking on it shows the following message: "1099-MISC Income" Income reported on 1099-MISC may flow to other areas, such as your business, and will be displayed there. Here are the rest of the entries: "EMPTY". In essence, the amount now shows up only in the "Business Items" as compared to both places last year. 
  4. Related to IRA transaction details, TurboTax asks for the total IRA value and says it should be in the 5498 form. For us, only Fidelity sent us the forms and for that it was zero as all of it was converted to Roth IRA. So, it was not obvious where to get the number from. We basically downloaded all our IRA year-end statements and added them up to get the amount. 
  5. 1099 amounts less than $10 are not transferred over when importing and so you will have to do it manually. 
  6. Downloading 1099s from vendor sites worked smoothly although the interface was not uniform. Specifically, the TD Ameritrade interface was especially clunky as the box titles say account number and password but you are expected to enter the account number in the 1099 physical form (which is different) and the document id of the 1099 as the password. 
  7. Certain transactions such as Commodity ETF disposals for expenses and options transactions are not handled well by TurboTax. Both of these areas will involve some amount of manual labor to get them right: for the former transactions, the cost-basis lowers by the total disposal amount and that needs to be calculated and tracked and the expenses per calendar year can be reported as investment expenses under 1040 Schedule A. For the latter transactions, 1099 physical has unreported Options Transactions section that may be of some help to get them reported correctly. Options transactions will get reported properly in the 1099 forms from next year onwards and so the problem should go away then. 
Note: consider also what is available at the Amazon.com Tax Preparation Software area. The options there are suitable in case you prefer client software as opposed to online interface. 

Related Posts:
  1. Free Online Tax Filing with IRS Free File - Ongoing Updates
  2. Turbo Tax to TaxACT switching experience - 2014 Tax Filing
  3. 2013 Tax Filing - TurboTax Usage Experience (this post)
  4. Turbo Tax Online Price Increase Over The Years - A Comparison.
  5. Online Tax Filing – TaxAct, TaxCut, Turbo Tax – User Experience Review.

Last Updated: 04/2017.

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