I just used TurboTax to file my Federal taxes - e-filed yesterday. Today I got a notice telling it was rejected because it included a duplicate 1099-R form.
This is simply not true. I understand how two of them could be misinterpreted as being duplicates: For two of the 2021 RMD’s, I withdrew the same amount of money from two IRA’s which are held at the same brokerage. One for me and one for my wife. I have the 1099-R forms from them showing the correct information.
TurboTax is telling me that if there is no actual duplicate and nothing needs to be changed, then I need to remit everything by mail (instead of e-filing). I don’t have a real problem with this but am just wondering why this has happened.
I noticed in the “mailed returns” instructions it says that if no taxes were withheld in a 1099-R payout then the actual 1099-R form does not need to be included with the mailing. And that is the case in my situation - I had no taxes withheld in any of the 1099-R payouts. I wonder if TurboTax included them anyway in the e-filed version.
So, like I said, not a real problem I guess, just wondering anyone here has dealt with this sort of thing?
I don’t use TT, so I can’t answer your specific question. Something must have tripped an IRS anti-fraud filter. I’m sure there is a place to enter whether the income belongs to the taxpayer or spouse. Make sure this is entered (one for you, one for your wife) and try to resubmit.
If it gets rejected again, another possibility is to remove the 1099-Rs from the return, go into Forms entry (where you enter the amounts directly on the IRS forms and enter it there.
If it still gets rejected, you may have to paper file. If so, prepare for a looonnnnng wait to get any return.
Have you verified that you specified the correct person for each of the 1099-Rs?
Including copies of the 1099-Rs might avoid questions from the IRS though most processing is by software without anyone ever reviewing the initial letters.
Yes, the 1099-R’s were properly associated with each one of us. In TurboTax, one is designated for the tax payer, the other for the spouse.
I’m just going to go ahead and mail it in. I’m not getting a refund. I actually withdrew more than I should have on the sum of the RMD’s and am going to paying a couple hundred dollars. I’ll write them a check and I don’t actually care how long it takes them to cash it.
That is a known issue. The solution is to enter a one-cent difference in the two 1099-R amounts. This will keep them from being exactly the same, and IRS rounding issues will make both still match what they have on file.
This has worked for me in the past. Give it a try!
That is a known issue. The solution is to enter a one-cent difference in the two 1099-R amounts. This will keep them from being exactly the same, and IRS rounding issues will make both still match what they have on file.
This has worked for me in the past. Give it a try!
Or increase one by $1. The IRS computers drop all pennies (they don’t round even though the instructions tell you to round). $1 extra reported income won’t change your tax liability (except in some truly rare circumstances).
Lots of nervous Nellies on that thread, worried that being off by a penny will cause an audit.
Yes, the IRS matches 1099s to what you report on your return. No, they do not match to the penny. The don’t really even match to the dollar. That’s because they ask you to round like you were taught in grade school - 49 cents or less rounds down and 50 cents or more rounds up. But they don’t round. They truncate. They simply drop the pennies. So you are almost certain to report a dollar or two more they they check.
Even a significant mismatch won’t generate an audit. It generates an automated letter telling you what they have and attempting to match that up to what you reported. Then it calculates the amount you owe if they are right. If you report more then they have on file, they don’t say anything.
So it’s perfectly safe to add a dollar to one of the “duplicate” 1099s to avoid the duplication problem. And if you want to keep the totals exactly right, take a buck off the other 1099. That still won’t generate any correspondence from the IRS.
Not at all. If you round numbers to the nearest dollar, you are already creating a mismatch. IRS computers truncate the pennies. They do not round. There is an unpublished minimum threshold for generating a document mismatch notice. It isn’t $1.
If you don’t believe me, request a Wage and Income transcript from the IRS and look at it.
I read through the first five and last page of posts in that thread. Most of it was random guessing by those who really don’t know how the IRS and tax prep software systems work. I pull hundreds of transcripts weekly for my clients. I know the IRS truncates because I routinely see transcript entries that are $1 less than what I input to my tax software. (My background was engineering, and I haven’t been able to retrain my mind to truncate instead of rounding to even.)
Most professional tax software will not accept penny amounts, which is why I wasn’t certain adding $.01 to one of the 1099-Rs would be sufficient to pass the IRS anti-fraud checks. But $1 will.
Wow, that sure didn’t take very long. I just got an email from TurboTax saying that the return has been accepted by the IRS.
But, it also says that I need to send a check by mail for the balance due. This doesn’t make sense since the payment was specified as part of the e-file. I’ll wait a few days to see if it gets processed (shows up in the checking account).
You have until April 18 to pay the outstanding balance without penalty. I would wait at least two weeks before sending a check. The e-payment should be faster than that, but with all the stress on operations at the IRS, who knows?
Most professional tax software will not accept penny amounts, which is why I wasn’t certain adding $.01 to one of the 1099-Rs would be sufficient to pass the IRS anti-fraud checks.
My guess is that this is not an IRS check. I don’t think that the IRS is capable of matching 1099-Rs in real time like this. The deadline for payers to electronically file 1099-Rs with the IRS is the end of March. So the IRS won’t even have a lot of those 1099s to do any matching at this point.
I’m pretty certain that it’s Turbo Tax trying to protect their clients from errors. For people who are a bit too trusting in their software, it would be easy to duplicate information, like a 1099-R. Download once directly into the software, then key it in by hand from the paper copy.
Most professional tax software will not accept penny amounts…
Depends on what you mean by “accept.” TaxAct lets me happily enter to-the-penny amounts but then it just as happily keeps only whole dollar amounts as soon as I hit ENTER or Tab to the next field. I haven’t noticed whether it rounds or truncates.