I am convinced I have found a calculation error in ProSeries. How do I get in touch with an advanced support person?

[mw11373]

I have a very specific situation where I think Proseries (Professional) is miscalculating the taxable amount of a client's Social Security Benefits.

I spent an hour on the phone with support on Thursday evening.  We ended up in a place where I was told to check the worksheets in an IRS Publication.  OK - my bad - I didn't do that first. 

I have now gone through the worksheets in the publication and I still think the calculation in Proseries (professional) is wrong.

I called back yesterday and, I'm sorry, but the support person was not very bright. I really didn't have the patience to go through the whole thing with him.

Is there another way for communicating concerns regarding errors in the software, other than a phone call?  Any help is greatly appreciated.

[Just-Lisa-Now-]

If you can describe the issue here, someone else may be able to offer suggestions....support really isnt that great for tax support, theyre not tax preparers working the phones.

[qbteachmt]

"I really didn't have the patience to go through the whole thing with him."

Would you describe this as related to the taxable amount of SS where the taxpayer also has UI? See how easy it was to give details?

And if that is what you are asking about...

The Unemployment is still fully considered for SS. Here is the specific IRS release on the computations:

https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation

"When figuring the following deductions or exclusions from income, if you are asked to enter an amount from Schedule 1, line 7 enter the total amount of unemployment compensation reported on line 7 (unreduced by any exclusion amount) and if you are asked to enter an amount from Schedule 1, line 8, enter the amount from line 3 of the Unemployment Compensation Exclusion Worksheet. See the specific form or instructions for more information. If you file Form 1040-NR, you aren’t eligible for all of these deductions. See the Instructions for Form 1040-NR for details."

• Taxable social security benefits (Instructions for Form 1040 or 1040-SR, Social Security Benefits Worksheet)
• IRA deduction (Instructions for Form 1040 or 1040-SR, IRA Deduction Worksheet)
• Student loan interest deduction (Instructions for Form 1040 or 1040-SR, Student Loan Interest Deduction Worksheet)
• Nontaxable amount of Olympic or Paralympic medals and USOC prize money (Instructions for Form 1040 or 1040-SR, Schedule 1, line 8 )
• The exclusion of interest from Series EE and I U.S. Savings Bonds issued after 1989 (Form 8815)
• The exclusion of employer-provided adoption benefits (Form 8839)
• Tuition and fees deduction (Form 8917)
• The deduction of up to $25,000 for active participation in a passive rental real estate activity (Form 8582)

[qbteachmt]

The Unemployment is still fully considered for SS. Here is the specific IRS release on the computations:

https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation

"When figuring the following deductions or exclusions from income, if you are asked to enter an amount from Schedule 1, line 7 enter the total amount of unemployment compensation reported on line 7 (unreduced by any exclusion amount) and if you are asked to enter an amount from Schedule 1, line 8, enter the amount from line 3 of the Unemployment Compensation Exclusion Worksheet. See the specific form or instructions for more information. If you file Form 1040-NR, you aren’t eligible for all of these deductions. See the Instructions for Form 1040-NR for details."

• Taxable social security benefits (Instructions for Form 1040 or 1040-SR, Social Security Benefits Worksheet)
• IRA deduction (Instructions for Form 1040 or 1040-SR, IRA Deduction Worksheet)
• Student loan interest deduction (Instructions for Form 1040 or 1040-SR, Student Loan Interest Deduction Worksheet)
• Nontaxable amount of Olympic or Paralympic medals and USOC prize money (Instructions for Form 1040 or 1040-SR, Schedule 1, line 8 )
• The exclusion of interest from Series EE and I U.S. Savings Bonds issued after 1989 (Form 8815)
• The exclusion of employer-provided adoption benefits (Form 8839)
• Tuition and fees deduction (Form 8917)
• The deduction of up to $25,000 for active participation in a passive rental real estate activity (Form 8582)

[mw11373]

I'm happy to give details.  MFJ couple - retired, ages 67 (H) and 65 (W).

Income consists of (ballpark numbers)

Investment Income - $17,000
IRA Distribution (H) - $44,000 (If it matters - this distribution was converted to a Roth)
Pension (W) - $23,000
Social Security (Both) - Gross $31,225 / 85% = $26,541 (this is correct)
Self Employment Income - $3,000 for H
AGI = $110,541

With these elements, 85% of their Social Security Benefits are considered taxable.  This is appropriate.

I add a $2,722 Traditional IRA contribution for the husband (based on the $3,000 of SE Income).

Adding the IRA contribution generates worksheets from Publication 590-A. Appendix B. These worksheets calculate the following:

1 - The amount of IRA contribution that is deductible (for taxpayers who receive Social Security Benefits and make IRA contributions).  This schedule  indicates that the entire $2,788 is deductible.  I'm good with this.

2 - Computation of Taxable Social Security Benefits (for taxpayers who receive Social Security Benefits and take a Traditional IRA deduction).  In this schedule, Proseries is excluding the IRA distributions from the calculation of Modified AGI.  As a result, only 64% of the client's Social Security Income is considered taxable.  No where in the IRS instructions for the worksheet does it say to exclude IRA distributions from the calculation of Modified Adjusted Gross Income for purposes of calculating the taxable amount of Social Security Benefits.  As a result, I think Proseries is undercalculating their Federal Taxes.

I really do appreciate your responses. It just seems like such an obscure situation.

Thank you

[qbteachmt]

@TaxGuyBill 

Let's see if he has a spreadsheet to review this; he's good at SS issues.

[BobKamman · Accepted solution]

Is a Form 8606 popping up when you add the IRA contribution?  And why isn't the self-employed health insurance deduction (for both spouse's Medicare) wiping out the Schedule C income, anyway?  

[linette]

I duplicated and ProSeries shows 85% of social security taxable and never changed.

I did what you said, using numbers that you reported and put them in one at a time not adjusting for the IRA contribution.  Reviewed the return to see that 85% of social security was taxable.

Then I put in the IRA contribution and see max is $2,788 so all is matching up as you say.

When I look to 1040 it shows AGI 110K as you state and is showing 85% of social security still being taxed.

Check inputting for some kind of technicality...IRA Ckd when pension.  Husband vs. wife.  Try removing social security screen and then reinput.  It seems like you might have a glitch....

PS--I made over 70-1/2 or under.  That doesn't seem to be an issue.

[qbteachmt]

The conversion could be part of the issue, because the 8606 is used for basis. I would review this relative to that deductible contribution.

You realize the client is sort of digging their own hole that they also are digging out of, by making a Deductible contribution and a Conversion? At this point, they might want to make only Roth contributions.

[mw11373]

@BobKamman and I thought I was being clever with an IRA contribution.  Thank you!  Your suggestion to deduct the Medicare Premiums was genius and got rid of the SE Income.

@qbteachmt - I can't disagree with you there.  The client had the SE income for a dumb reason & I wanted to get rid of as much of it as I could.

@linette - Thank you for taking the time to re-enter the data to try to recreate the situation..

I believe the numbers are correct now.

Thank you all very much. ❤👍