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Question

TurboTax Early Rounding Issues creating LARGE variances between TurboTax Produced Return and Brokerage 1099-B Data

Forum|Forum|5 years ago
February 18, 2021
40 replies
0 views

Edited to be as clear as possible.

"In my 2019 TurboTax Produced Tax Return, Column H on Form 8949 was NOT ROUNDED. In my 2020 TurboTax Produced Tax Return (this year), Column H is Rounded.

The IRS guidance did not change between the two years so please fix it. Rounding every individual transaction on FORM 8949 produces large variances with what the broker sends the IRS on 1099-B for people with hundreds of transactions. Software should not be rounding this number."

*Edited to add the issue is worse than I thought....TurboTax appears to be rounding All dollar amounts on Form 8949 in the final version of returns. Every column that features dollar amounts is being rounded on Form 8949 and that is definitely not REQUIRED by the IRS. We are not using pen and paper so please be precise.

TurboTax software for this year has a serious issue that is upsetting customers. TurboTax is forcing rounding at the individual transaction level for items like stock sales. This creates an enormous problem for people with hundreds of transactions. The early rounding results in a large variance between the Broker to IRS 1099-B statements and what a TurboTax produced return details. Some suggest "the IRS allows it." First off, the IRS definitely does not REQUIRE it. Just because the IRS allows it does not mean it should be forced upon TurboTax customers. I am sure the IRS intention for allowing rounding (again, not requiring) is to help people who use pen and paper and don't pay for expensive software. We that pay for expensive TurboTax software expect precise data. When the early rounding creates a variance, it is possible that other issues with the data are being hidden. It is why anyone who has ever done reconciliation on financial data knows that you tie out to the penny (and then at that point you can round). It is the only way to know 100% that you have accounted for all the data. Come on TurboTax, you should know better. As a decade long customer, I genuinely believed your product got better every year....but this year, it has taken a giant step back. Please Fix It.

TurboTax Premier Online

mjrengaw

Thanks for opening a new thread on this issue. Hopefully we will get some sort of response from TT and they won't close it as "resolved" because as of right now it is not.

gp10237

IRS says "If you have to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round off only the total."

That rounding applies to Schedule D, where taxes are calculated. The transactions to support Schedule D are shown on Form 8949. The values Form 8949 should include the cents, and the sums should be rounded as they are transferred to Schedule D.

That is the only way to get the 1099-B values to match the Schedule D values. My brokerage firm does NOT round individual stock transaction values as they are entered into the 1099-B form, and I question if the IRS would allow them to do that.

Please fix the TurboTax software so that the Form 8949 matches the 1099-B forms. They have matched for the past 10 years, and the current year's software is BROKEN.

I came across this problem at another tax preparer years ago, so I immediately switched to TurboTax and have used them since. In fact, I have been recommending TurboTax to my friends and relatives for 10 years, specifically because the stock transactions are only rounded after summing, so that the tax forms (Schedule D and 8949) will match what has been sent to IRS in the 1099-Bs.

MaxTax00Author

I have tried calling TurboTax but obviously the people I get in support don't write the software so it is hard to get too angry with them. This is definitely an urgent matter that TurboTax must address or they are going to have a ton of complaints as we move closer to April 15th. It was NOT like this any of the prior years. The online experts have been of no help unless they are escalating the issue already and this is being worked into an updated version of the software. The product is virtually unusable for anyone with hundreds of 1099-B transactions as it stands now.

MaxTax00Author

I believe the best thing we can do to get this fixed is to remain organized and continue to post on this thread until TurboTax updates their software. It should be an easy fix considering their software did it correctly for at least the prior decade that I used it. It was always so easy....I would import and then the number on TurboTax would tie out perfectly with the numbers on my 1099-B brokerage statement. Now, it is off by an uncomfortable amount because of this new rounding that TurboTax is doing at the individual transaction level. My transaction total has been relatively similar year to year so it is not like all of the sudden I have a variance because I have hundreds of transactions. I had hundreds of transactions last year and TurboTax perfectly tied out with my Brokerage 1099-B. Fix this TurboTax. Thank you.

mmckay3157

This is my first year using TurboTax and coming over from the other Green Logo'd Giant. This is a MAJOR issue for TurboTax and will likely result in me going back and filing this year with the competition after considering TT. At least I'll get some recourse for the time I put in on this by saving on TT filing fees.

MaxTax00Author

Hopefully they fix it soon. Since most people just got their 1099-B this week, I imagine a tsunami of complaints will start to come in to TurboTax as we move closer to April 15th. If using the desktop version, I recommend leaving feedback where it asks for it at the bottom of the screen. It was not like this last year so clearly they can correct it.

MaxTax00Author

Still zero help from any of the TurboTax experts on relaying the issue to their technical team. I got the generic email asking if the issue had been solved. Clearly not. I can screenshot the difference between how TurboTax addressed the issue for the prior decade versus this year if needed. Simply, Form 8949 column H is rounding this year on TurboTax after not rounding for any of the prior decade I have used the product. The IRS guidance has not changed so I am not sure why TurboTax is doing it differently this year.

Rerun48

The rounding screws up everything to do with investments. I can't clear an error on capital g/l adj form because of the rounding. I agree with everyone on this thread - there should be no rounding on the transaction level. I have used TT for more years than I can count and this is the first time I've seen this type of rounding. Very disappointing.

vulpinepuppy

I 100% agree with the others, I cannot file my taxes as is because of the variance. Turbotax is causing me to pay more in taxes because it is rounding every transaction instead of a the form line level. This issue needs to be fixed ASAP otherwise myself and others will not be able to file our taxes correctly, or worse, others will file incorrectly given the large variances caused by rounding.

MaxTax00Author

Glad to see more people posting. This rounding at the transaction level will come as a shock particularly to longtime TurboTax customers since it was not done this way in the past. We were so used to hitting one button and having everything perfectly match. TurboTax was a great product last year and no reason it can't be again this year if they fix this unnecessary rounding issue.

Geoffl10

Adding my voice as another who is affected by this. It needs to be fixed. Imagine rounding up 500 separate transactions for a potential $250 error in excess. I could be paying more tax than necessary in that situation.

TT, please elevate priority for a fix and update. Thank you.

Angelo5

I too am having this problem. I am a day trader with hundreds of transactions. The rounding of each individual stock/option sale is resulting in over a thousand dollar variance between the total profit/loss shown on my 1099B and the number TurboTax is saying it is.

MaxTax00Author

I don't see how TurboTax can in good faith offer a product that is causing people to potentially have a higher tax bill because their software is doing rounding at the individual transaction level that is definitely not required by the IRS.

vulpinepuppy

To put it into a number perspective.

Say you have 1,000 transactions of different stock sales (which are wash sales which means you must list out the sales instead of summarizing).

Every stock sold for 10.50 and the basis was 5.45, thus the 1099-B showed a net capital gain (assume short term) of $5,050.

Under the current turbotax calculation, every stock proceed would be rounded up to $11 and the basis would be rounded down to $5. Turbotax would then force the calculation as a net gain of $6,000.

Paying tax on an extra $950 in this scenario is not the maximum refund guaranteed that most would expect from turbotax....

Critter-3

First the rounding has been the same for the 30 years I have been in the business and the difference is usually less than $10 total which will not usually effect anything.

However if you have hundreds of sales then using the summary entry option and mailing in a copy of the broker statement for the uncovered sales is the way to go.

How do I enter a large number of stock transactions in TurboTax Online?

TurboTax Online is equipped to handle around 500 individual transactions (give or take) per brokerage account before performance starts to deteriorate.

If you need to enter a bunch of stock transactions with a total sales volume of less than $10,000,000 (ten million), you can enter a summary for each sales category. Instructions follow.

Another alternative is to switch to the TurboTax CD/Download software which handles around 2,000 individual transactions per brokerage.

How to enter a summary in lieu of individual transactions

Your brokerage statements should include a summary of your transactions, grouped by sales category, for example "Box A short-term covered" or "Box D long-term covered". You'll enter the summary info instead of each individual transaction.

Open your return in TurboTax Online (if it's not already open) and search for stock sales in the upper-right corner.
Click or tap the "Jump to" link in the search results.
Answer Yes to both Did you sell any investments? and Did you get a 1099-B?
- If you land on Here's the investment sales info we have so far, select Add More Sales. Then answer Yes to Did you get a 1099-B?
On the Choose Your Bank or Brokerage import screen, select I'll type it in myself.
Select or enter your brokerage on the next screen and continue.
On the following screen (Tell us about...) select the second option, I'll enter a summary.
On the same screen, enter the total proceeds (sales) and cost basis, along with the sales category. Refer to your 1099-B for the amounts and category. When finished, select Done.
Follow the onscreen instructions to enter additional sales or to view a summary.

When you are done entering all your sales transactions, you'll eventually come to the Here's the investment sales info we have so far screen. Here you can edit, delete, or enter more sales.

Related Information:

How do I switch from TurboTax Online to the TurboTax software?

MaxTax00Author

@Critter-3

Sorry, but the rounding is not the same in TurboTax as it was last year and I have the TurboTax Produced returns from both years to prove it. Last year, Column H was not rounded on Form 8949 and this year it is being rounded.

DBC1014

This really upsets me. I cannot finish my e-file because of this tiny bit of money. I have paid for TT fees with credit card and now I have received on email my fees will go up if I don't file by Feb. 28.

I am a first time user. I got to the very end of completing and it stopped me because of this "tax wash" issue. I spent well over an hour with a Turbo agent trying to resolve. Finally I was told to wait a few days to see if TT resolved the problem and gave me a discount code to use towards my fees, which I can't use because I chose to pay fees with credit card. And told if the issue is not resolved, I will need to MAIL in my return. What the heck??

Can't at this point recommend TT. This is a disaster,

MaxTax00Author

It is a total disaster and the issue is worse than I thought. I just previewed my actual return in the TurboTax software and they are Rounding ALL of the dollar amounts on Form 8949 in its final copy. Every single column that has dollar amounts on Form 8949 is being rounded! That is definitely not allowed by the IRS. I still believe this is such a huge issue bubbling up that the complaints are about to go parabolic. I imagine many on this thread loved TurboTax in the past so we are not looking to complain.... but this is absolutely an issue that has to be fixed.

Xer

I agree

This is my first time filing tax but I’m almost done filing but only need to fix that issue, wash sale error ( another way to file is entering the info manually). The system already charged me but I need answer on when they can fix. Man if turbo tax doesn’t have a proper answer to when they can fix it, honestly I will file with another system.

fanfare

Employee

This is a problem, compounded by thousands of new Robinhood-ers doing hundreds of tiny trades generating teensy "wash sale loss disallowed" amounts of pennies.

GrtScott

This is also generating error messages when the final review is run, particularly when Box 1g of the 1099-B is less than $0.50. Overriding the downloaded value and entering the value from the form results in the same $0.00 and is not accepted as valid. I'm assuming since the box is flagged as such and cannot be removed.

DawnC

Employee

You can edit and remove the error(s). @GrtScott The changes required cannot be performed through the Review and/or Error Check screens. You must return to the interview section to edit your entries, specifically, the wash sale adjustments.

The error messaging you are seeing is a result of the automatic rounding of the numbers, either imported or typed in by you. If the wash sale adjustment is $0.49 or less, then it is automatically rounded to zero. Although this type of rounding is allowed by the IRS, it causes some fields to show $0. And unfortunately, zero is not a valid value for this field, so you will get an error for any field with a $0 entry.

To resolve the issue, you can edit each individual transaction (although not from the screen in the review process) and delete the amount entered in the wash sale adjustment if it is $0.49 or less. This will clear the error message(s).

To do this, you will need to revisit the Form 1099-B entry interview. Use the following steps:

Use the Search feature by clicking on Search in the top right corner
Type in 1099-B and hit enter
In the results window, click on Jump to 1099-B
Click Edit next to the issuer's name
Click Edit beside each transaction that contains a wash sale adjustment amount of $0.49 or less
Delete the wash sale adjustment, leave it blank, and then click Done

If you have too many transactions to edit, consider using the summary reporting option.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

MaxTax00Author

@DawnC

I think the problem most of us are having on this thread is that TurboTax did not round in prior years at the individual transaction level even though the IRS allowed (not required) it. This rounding at the transaction level creates all these new problems and introduces glitches into the software.... so shouldn't TurboTax just make it not round at the individual transaction level since the IRS also allows that? It seems odd that TurboTax appears to be taking an antiquated position by adopting rounding on Form 8949. A position that is more suited toward the pen and paper era than that of the software era.