makbo wrote:[ . . . ] As one in the early years of the profession might agree, you are more open minded and skeptical when it comes to asking whether something is correct than someone who is comfortable with a wide variety of tax returns, and thus is lulled into a false sense of confidence.
LW25 wrote:[ . . . ] We used electronic desk calculators -- but we didn't independently check to make sure that the desk calculator was actually doing the math correctly [ . . . ]
The 2018 Schedule D Tax Worksheet in the Instructions for Schedule D (Form 1040) contained an error. The tax calculation did not work correctly with the new TCJA regular tax rates and brackets for certain Schedule D filers who had 28% rate gain (taxed at a maximum rate of 28%) reported on line 18 of Schedule D or unrecaptured section 1250 gain (taxed at a maximum rate of 25%) reported on line 19 of Schedule D. The corrected worksheet is at the end of the updated instructions at the link above.
Chay wrote:glowacks wrote:there's a sanity check at the end of the worksheet so that you don't end up paying a dollar more because of rounding issues when you have a very small amount of capital gain.
You not only found the error but you also understand the deeper meaning of each line? How do you know so much about this worksheet, especially considering you seem to be relatively new to the profession?
glowacks wrote:It was absolutely the hardest thing I have ever done as an accountant. I do not fault other people used to the IRS being right all the time for not taking the time to research this.
Divorce or separation agreements after 2018. Amounts paid as alimony or separate maintenance payments under a divorce or separation agreement executed, or changed, after 2018 won't be deductible by the payer. Such amounts also won't be includible in the income of the recipient.
glowacks wrote:However, the "sanity check" at the end I already knew about for a different reason: personal experience preparing the worksheet by hand on a relative's return.
glowacks wrote:I only looked into it more simply because I thought the tax on an individual who sold some rental real estate seemed too high
Spell Czech wrote:So you two are saying that everybody with a kernel of reading ability and at least a two-digit IQ should recognize immediately that "Your capital gains tax is based on your regular tax bracket, while your unrecaptured Section 1250 gain is [taxed at] a flat rate," - as one source has written on its website - is simply wrong, incorrect, misstated, and should be disregarded. Which part of it?
We had a client who was issued a refund with no explanation. We called the tax practitioners hotline and the IRS could not explain why the refund was issued. We recalculated the return (Prosystem Fx) and the change was due to the Schedule D tax worksheet and the recalculated return agreed to the refund issued.
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