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estimated tax penalty calculation - Ca taxpayers

KARENHAM
Level 2

Has anyone found a work around for lacerte calculating an estimated tax penalty for Ca taxpayers not making a 4th quarter estimated tax payment? This is a huge issue that needs to be addressed either from a software fix or a workaround? 

13 Comments 13
sjrcpa
Level 15

Override it 

The more I know, the more I don't know.
KARENHAM
Level 2

Overriding the penalty is not allowed for e-filing and would cause alot of work on the preparers. The taxpayer may have an underpayment penalty for not making enough payments through the 1st 3 quarters but should not be punished for not making the 4th. Perhaps at least allow us to override the 4th qtr interest rates? That should be an easy programming fix although would not fix in all situations. I have many clients that deferred significant payments in the 4th quarter. This will draw a slew of notices. Please fix Lacerte!!! I don't understand why you are not making programming changes for a law change that affects so many taxpayers!!!

sjrcpa
Level 15

We don't know why either but Intuit said they will not make any changes for the postponed filing date.

Can ask for a waiver for the Q4 amount to get the return to come out right?

EDIT: Or suppress all of the penalty & tell client they may get a bill for Q1-3 of about $XXX which they should pay.

The more I know, the more I don't know.
KARENHAM
Level 2

How about Lacerte makes the appropriate software changes so we can file the returns and not receive a flood of notices??

sjrcpa
Level 15

Excellent idea. They said they won't.

 

The more I know, the more I don't know.
BobKamman
Level 15

Fortunately I don't have any California clients who make state quarterly payments.  At least, not for last year.  But I tried to find information online about this law change, just out of curiosity, and came up with nothing.  When was it changed, and what's the new rule?  And is this for the entire state, or just the parts that are underwater or snowed in?

abctax55
Level 15

@KARENHAM 

 flood of notices??

I'm sure you didn't mean it as a joke; but I laughed anyway.

 

 

HumanKind... Be Both
abctax55
Level 15

@BobKamman 

All but 7 of CA counties are part of a Federally Declared Disaster Area (and those 7 may get added the way the weather is acting...).  Filing and paying has been extended to October 16.  The FTB has conformed.

HumanKind... Be Both
abctax55
Level 15

Can ask for a waiver for the Q4 amount to get the return to come out right?

EDIT: Or suppress all of the penalty & tell client they may get a bill for Q1-3 of about $XXX which they should pay.

@sjrcpa   - those are the two things I plan on trying when I get the first one.

HumanKind... Be Both
KARENHAM
Level 2

@abctax55 

I actually did not mean for that to be a pun, but it is true - lacerte not fixing the software to reflect the current law is going to be a huge hassle. I don't understand why they will not change the software to reflect the current law... I don't want to prepare incorrect returns or cause alot of extra work replying to notices or explaining to clients. All they did was tell us how to change the letter??? It is riduculous....

Rate LC a 1 for the question "How much does LC care about me as a customer?" 

BobKamman
Level 15

So what you are saying is that you want the software to calculate the penalty just for the first three quarters, except in seven counties?  The underpayment is normally figured until the April 15 due date. Now what date do you use, April 15 or October 15?  

Many contracts have an "act of God" or "force majeure" clause, excusing nonperformance due to unforeseen circumstances.  I'll defend Intuit on that one.  And if clients expect preparers to spin their wheels doing calculations so that they don't get a bill, let them go elsewhere.  No one forced them to live in California, and if they aren't actually making money from bad weather, their income is probably not affected.  Certain people take a certain glee in delaying tax payments as long as they can.  Remember the long line of cars at the Post Office, the evening of April 15 back in the old days?  Let them focus on something more important, like the potential collapse of democracy.  They should have paid on January 15 anyway, because they never know when their bank is going to collapse.  

abctax55
Level 15

No one forced them to live in California, and if they aren't actually making money from bad weather, their income is probably not affected. 

Which, has nothing to do with the software and how to get it to properly present due dates, penalties, etc.   

HumanKind... Be Both