Toolbox

Existing tools – potential work

Annual updates to tax data files

  • Update the upcoming tax year data files and create new data files for the next year:
    • IRS data is in files named “IRS_nnnn” and “CO_nnnn” where nnnn is the tax year.
    • Formats are in JSON data structures:
      • {“itemName1”: “value”, itemName2: “value”, …} pairs and each “value” can also be additional itemName/value pairs, ad infinitum although going more than 5 levels deep is not supported in the Common_Routines.js functions.
      • itemNames must be in double quotes. values can be numbers or double-quoted text or additional itemName/value pairs enclosed in curley brackets.
    • Within tools that need this data, 4 years of data is read in (5 for the tax estimator) into an object named  IRSData or COData.
      • Access to the data item within the object can be direct: IRSData[TYnnnn][ItemName][ItemName] or indirect using the Common_Routine function _IRSValue(ItemNameX.ItemNameY.ItemNameZ) and the function will prepend the tax year and add “.value” to the end of the ItemName chain and try both with and without the “.value”. (Colorado data uses COData and _COValue() respectively.)
  • A desirable new capability is to write a PHP application that modifies or creates these files in a more user-friendly fashion.

Annuity/Pension Exclusion Calculator

  1. Clarification for disability pensions and how to deal with them after retirement age or death of taxpayer when spouse doesn’t know pension start date or minimum retirement age but has prior year tax return.
  2. It was a joint or survivor annuity and a disability pension. I was able to duplicate the annuity calculator for 2019 (attached). However, her husband died in 2019 so when I entered their birthdates and checked the box that he was deceased, for 2020 I got the following message: “Because the annuitant has deceased, this is no longer a disability annuity. Recalculate using the spouse as the annuitant, with the start of annuity the first month after the annuitant’s death.” When I recalculate as instructed it does not look right (it’s attached). It doesn’t account for the amount previously recovered, and I can’t find a way to enter it. I tried subtracting the prior years’ amount from the Total Annuity Contributions and the result looks reasonable, but that’s not in the instructions. (Maggie Barrington, CO1 D18 DC, cobarrin@lpcnextlight.com)
  3. For annuitants with annuity beginning dates before July 2, 1986, the contributory amount paid is fully taxable. These annuitants cannot use the employee contribution amount, even if the amount is shown on Form RRB-1099-R, to compute a nontaxable amount of their contributory amount paid because their employee contribution amount has been fully recovered. (John Arenberg, aarptax@gmail.com)
  4. It appears the annuity calculator assumes a lifetime annuity/pension. I recently annuitized an old non-qualified product with a 10-year certain period, for myself only. From my research it looks like IRS 939 applies (to me) using the General Rule. The monthly exclusion fraction is Basis divided by the total expected return, and is the same $ amount excluded from each payment for all 120 payments. After 10 years I’ve recovered all of my basis tax-free. Pretty simple I think, but not the “Simple Rule”.  Entering my data in the tool (age 71) gives 160 months. Assuming I’m correct it may be helpful to clarify where the tool applies. As an AARP tax-preparer I don’t want to mess up someone’s return! I haven’t gotten a 1099 yet, so maybe the issuing company provides all the needed info.  I’ll be interested in seeing THEIR calculation!  (Steve Quarry, steve.quarry@me.com)
  5. Inherited annuities must be recovered in 10 years if not a spouse taking it as her own. Similar issue as previous request.

Business Activity Codes

  1. Check code list each year as part of annual update.
    Last update: 8/17/2023

CO Sales Tax Tables

  1. Each July: Revise each year reflect new tax rates from CO DR1002. Includes adding the new year’s table in the Tax Data directory.
    Last update: 10/1/2024.
  2. Each Dec: When form 1040 Sched A becomes available, update the city codes (A, B, C)

Coronavirus Tax Worksheet

  1. This worksheet was only for 2019 for making a decision whether to chose a 1-year or 3-year tax payment option. Since we can no longer do 2019 taxes, this can now be deleted. DELETED

Dependent Qualification Calculator

  1. Difficult to maintain. Any way to make this more “table-driven”?
  2. Add a report option to print the path through the NTTC laminated tool.
  3. I have a question as to why the medical expense deduction is yellow when you check: TP paid >50% of HH cost, Marital status is divorced/separated or lived apart last 6 months, child lived with one or both parents>6 months, more than 1/2 support provided by parents, child provided <= 50 percent of support. When you click on the yellow medical expense deduction it indicates it can be claimed if the other TP doesn’t claim.  But, Pub 502 (2022) page 4 appears to indicate both parents can include the medical expenses they pay for the child, if conditions indicated by above described checked boxes apply. The Qualifying Child or Relative Resource tool blue result boxes 37 and 52 also seems to indicate both parents can claim the medical expense deduction. (Margaret Matulis, mmmatulis@gmail.com) Comment clarified.
  4. Just ran into something that might be useful to add to the dependent calculator.  Dependent is disabled brother. Died after 4 month in home. It is clear he qualifies as a dependent, but maybe a box for deceased to confirm that he qualifies his brother for HOH. (Gina <ginakrit@gmail.com>)

  5. We came across an unusual situation that we believe the Calculator does not properly address, regarding HOH status.  As per the 4012 (Page B-13 footnote 5) and the link below, a technically married TP can be treated as Unmarried for HOH purposes if the spouse is a non-resident alien.  This means the qualifying dependent need not be the TP’s child; e.g. a niece would suffice.  But choosing that status at upper left does not change what the Calculator displays. Here’s the IRS link:  https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-residents-abroad-head-of-household#:~:text=If%20you%20are%20a%20U.S.,head%20of%20household%20tax%20rates. (Paul Peyser DC, NJ1 D20, pmpeyser@aol.com)

Education Benefits Calculator

  1. It appears to me the Student portion of the calculator is treating any part of a scholarship reported as taxable on student return as “unearned income” for purposes of the “standard deduction”.  In fact, the law allows for SD (only) taxable scholarship not reported on W2 to be treated as earned income thus allowing $12,950 as SD to a single student filer. Then again, I may have entered incorrect input in one of my tabs. (Paul Mazerik, IN01, D02, pmaz317@sbcglobal.net)
  2. Remove current tax calculation code and use a new tax common routine.
  3. Add a test for AMT and include or avoid it during optimization (option?)
  4. Are there implications with military academies and 529 plans?
  5. Add form 8814 option if in scope for Alaska (as we’ve been told)
  6. see http://www.savingforcollege.com/articles/the-truth-about-scholarships-and-529-plans-880 for anything that needs to be considered
  7. Since the Tuition and Fees option is no longer available, can that column be used for using education as a business expense?
  8. Enter ACA data from 1094A instead (not sure what this means)
  9. Deal with the 2020-2021 above-the-line charitable contribution
  10. Fix not able to input wages if the “No W-2” box is checked
  11. Add a state interface and include in the optimization
  12. Check NoEIC box if TP is under 25

EIN Search Tool

  1. Update annually from TaxSlayer EIN reports to include new ones
    Last update: 10/19/2024

Estimated Tax Worksheet

  1. Break tax calculation out as a separate common function DONE
  2. Block entry of Retirement credits if AGI is too high
  3. Detect if single youth is subject to the kiddie tax and alert
  4. Detect if AMT is required and add warning
  5. Include additional Medicare/SE/RRTA tax if over the AGI boundaries DONE
  6. Add a line for K-1 S-corp QBI entry
  7. Add a state interface
  8. Add Credit for Elderly/Disabled
  9. Add ACA information and an option to optimize PTC and SEHI

  10. I appreciate the worksheet overall…. but it seems your formula to calculate self-employment tax seems inaccurate when MFJ if one spouse has W2 income and the other spouse has business income.  In this case your worksheet would assume the W2 income and business income together for the SE taxes calculation…. resulting in an under-estimation of the SE tax on your worksheet. (Ram Bo, 989bright@gmail.com)

Home Cost and Support Worksheet

  1. No changes suggested.

Home Sale Worksheet

  1. There is a difference in how the selling expense $6487 is treated by your worksheet Schedule D shortcut and the Tax Slayer Sale of Home Worksheet’s longer path to Schedule D. In the shortcut the selling expense is charged against the exclusion allowed. In the longer pathway (easily entering data from your worksheet page 4) the selling expense is added to the cost, thus reducing the amount of exclusion needed. This seems like a nit, but could make a difference with other numbers. (John Travell, velltrev@gmail.com)
  2. I entered that 1 spouse on a joint return did not meet residency test, but it gives the full $500000 exclusion? (Carole Ressler, carole.ressler1@gmail.com)

IRA Worksheet

  1. Instructions for how to enter data for non-spouse, inherited, or spouse > 10 years difference in age
  2. This tax-year we’ve had many younger Roth IRA owners withdraw some or all of their contributions (basis). Because many of these taxpayers are under 59&1/2, the administrators of these accounts code the 1099-R with a “J” which is Out of Scope unless it’s miscoded. Since Roth IRAs permit the withdrawal of contributions (basis) at any time, this necessitates generating a Form 8606 to justify $0 being placed in box 2 of their 1099-R because it’s a actually a permissible withdrawal of basis. As I understand it, your current 8606 Calculator focuses mainly on traditional IRAs or Roth conversions from a traditional IRA. Is there some way you could modify the existing 8606 Calculator, or perhaps initiate a new one, to address basis withdrawals prior to 59½ from pure Roth IRAs (not from Roth conversions from traditional IRAs)? In these cases, the Form 8606 Part III is straightforward. But it would be very helpful to have one of your clearly written Calculators to guide counselors unfamiliar with Roth rules to the correct answer in these cases. (John Harris, NC01, Instr, harris@bellsouth.net) Interest from that amount is taxable and would have to be figured. Not implemented at this time.

Mortgage Interest Worksheet

  1. Review how points are handled for new vs refinanced points:
    1. Points paid when a mortgage is refinanced can be amortized over the life of the loan; they cannot simply be deducted on the return for the year when the loan was refinanced. (Pradeep Thayamballi, pthayamballi@gmail.com) Worksheet only asks for amount paid that year, so should be OK. We don’t try to guess how to amortize the points.
    2. Are points reported on the 1098 form accurate or does the taxpayer have to tell us?
  2. When one refi’s for a better rate, only, and does not pull any cash out, but rolls refi costs into the new loan causing the loan to increase, isn’t the original loan balance interest, only, deductible, and interest on the refi costs non-deductible. (D_Armin Adams, WA01, darminadams99@gmail.com). Refi costs should be entered as equity.
  3. Example 1–two mortgages, one for the first house $500K and the second house also has a $500K mortgage. The first house was sold on June 30 and replaced by the second house. The above seems to say that your avg balance is $500K for each mortgage and added together that to0 are 1 million and exceed the $750K limit so only 75% of the interest is deductible.
    Example 2–first mortgage is for one month at $500K. second is for 6 months at $500K. I think following Pub 936 I still end up with a $1Million mortgage. (Rob Klemberg, imaattion@aol.com) Restored average balance over full 12 months rather than just mortgage months.

Part Year Worksheet (CO specific)

  1. Update annually for new CO rules if any.
  2. Adjustments and credits are in multiple switches. Change these switches to use a table-based scheme.

Railroad Retirement Worksheet (CO specific)

  1. See if TaxSlayer fixed Tier I coverage – either added a field to define the amount in the state return section or tagged the entry in the federal section
  2. Update the line numbers for any DR104 or DR104AD form changes each year

Refund/Recovery Calculator

  1. From Rob (?) – when refund is limited to std deduction, the 4th payment is still limited. Overall consequence is better if std deduction was taken.
  2. Consider cap gains that make tax 0
  3. Add AMT considerations
  4. Tax is based on $50 ranges. There may be a few dollars available based on where the actual taxable amount lies within the range and could be accounted for at some point in the calculation. (Paul Westcott, VA, pcwestcott@gmail.com)
  5. On the state refund taxability tool, I suggest that the dropdown menu choose the “refund tax year,” not the “current tax year.” (Barbara Smith-Thomas, barbarast.aarp@gmail.com)If a taxpayer filed their 2021 taxes in 2023, resulting in a refund in 2023, the “current tax year” is 2023, but the calculation of the refund taxability has to use 2021 tax return data. To get the correct answer, I need to choose 2022 as the “current tax year.” DONE

Sales Tax Deduction Worksheet (see Pub 4012 page F9.1)

  1. Add line numbers to the source column (requires #1 above) DONE
  2. Add row for Insurance Proceeds (Life, Accident, etc) (Jon Garlett, garlett.jon@gmail.com) DONE
  3. FYI, a suggestion that was received for the NTTC Sales Tax Worksheet (PDF) that we’re incorporating in the version that will soon be posted is to add a line for “ADD Child Support and Nontaxable Alimony.”  Sharing this as you may want to add something similar to your calculator as well. (Matt Meyerson, matthew.s.meyerson@gmail.com) DONE

Tax Credit Plotter

  1. No changes recommended