Lacerte - Estimated Tax Penalty

I'm having a hell of a time getting Lacerte to even remotely accurately calculate the estimated tax penalty. Yes, I am filling in required information, such as filing date, etc. The estimates are consistently far below what the revenue agencies assess and I confirm through other sources.

Interest rates are properly downloaded. Any insight on how to correct this? Haven't bothered contacting Lacerte, yet, but mat need to since it seriously impacts tax planning and makes me look bad that the software cannot calculate a remotely close penalty.

I started using a P&I calculator by Denver Tax Software to calculate failure-to-file and failure-to-pay P&I after it was plugged during one of my state CPA societies CPEs.

Might be worth looking into a specialized software program like the one mentioned above. The DTS one isn't expensive at all.

If you post your numbers I'll run it and tell you what P&I it calculates.

Know of any other good ones besides DTS? They do not support some of the states I need. I previously used an online freebie IRS P&I and it was pretty damn close to what the IRS calculated, and about four times that of what Lacerte calculated.

To be fair, had same issue with UT. Baffles me why these tax programs cannot be more accurate on this front!

They probably don't get enough pushback on it to prioritize getting it right/keeping it current over other areas, which is why a specialized, bolt-on program makes sense.

I'm comfortable with Drake's underpayment penalty calc, but don't trust its failure-to-pay and failure-to-file calcs for obvious reasons.

Sorry I'm not familiar with any other P&I calcs except DTS.

I don't think you will find any software that will calculate it exactly as IRS does IMHO. I take a different tact. I explain to the client the penalties involved and how they apply BUT I am not going to calculate the interest charge because that is the big variable and difficult to calculate because of the changing interest rates by quarter. Let them get the IRS notice and then show them how it applied. It is NOT worth my time to be pin point accurate when I am not the person responsible to calculating interest and penalties. In most situations my basic calculation will be within $100 anyways.

Sorry I'm not familiar with any other P&I calcs except DTS.

I bought DTS since I couldn't find another solution. I am getting errors, it isn't liking my dates for some reason. Time to read the manual I just found (thought I saw it, yesterday, but was struggling to find it again).

Yes the dates take a few minutes to figure out. Your assessment date can't be the same as either the beginning or end date of the calc.

Once you figure out the dates and learn where and what data to enter, it's pretty smooth operating.

I would have run a calc for you (post #2) before you bought it so you could judge accuracy. Best of luck!

Not worried about it, software hardly costs anything but appreciate the offer. I'm sure it is just a slight learning curve and I'll be able to successfully use it to compare to Lacerte and revenue agency notices that follow Federal guidelines.

DTS is calculating a lesser amount than Lacerte, in this case, so I am going to stick with Lacerte's calculation (which makes sense when I look at it, but like I said, they have not been accurate in some cases). This particular client prefers risk of overpayment rather than being dinged for additional amount, later.

I'll play with it...I have another tax return I can compare to based on Lacerte vs. IRS assessment.

Question: it seems the only way I can get it to calculate is if I start with total tax liability, and then add in ALL methods of tax payments to arrive at the calculated underpayment. Is this your finding, or do you in fact start only with the underpayment (amount due)? The manual says underpayment/overpayment amount, but it does not want to calculate anything and showed my client had an overpayment, in the end.

I always start with the underpayment, i.e. the tax due that was not paid in by 4/15 (or 7/15 for the 2019 tax year). No problems for me.

If you'd like to post what you're using as inputs I'll run on my end and see what you might be doing wrong.

I just calculated in an Excel spreadsheet for Failure to pay and Interest for 33 days and I was only 34 cents off! I will settle for that.