What could be more fundamental than determining whether retired people have already paid their income taxes in the form of estimated tax? And yet TurboTax is missing that for the 2018 tax year.
The new tax rules have resulted in a shorter 1040 tax form that has only 23 lines, none of which deal with estimated tax. Maybe that's where TurboTax dropped the ball.
The previous version of the 1040 tax form used for many years had 79 lines and included for 2017:
65 2017 estimated tax payments and amount applied from 2016 return
Even if your previous returns using TurboTax included estimated tax paid, TurboTax does not explicitly prompt you for that tax, even if you are listed as retired. That's two very obvious cues that TurboTax misses in its online system.
Despite numerous, tedious on screen cartoons that are supposed to simulate rechecking your return for ever more elusive "savings", TurboTax misses that essential item every damn time. It never prompts you for estimated tax paid.
Speaking to two TurboTax reps:
The first simply drones on about there being new tax rules, even after repeatedly being told it's not about deductions, etc. but about estimated tax paid. Finally that person sends you to an expert ... after a 20 minute wait on hold.
The expert is genuinely surprised but confirms. Then you are shown a convoluted way to find way your down in the TurboTax menus to a place to enter your estimated tax paid.
With many articles written about people being surprised that their taxes have increased after the changes in tax rules, you may think that a higher tax bill may be due to that. But it may also be due to gross incompetence by a company like TurboTax.
If you discover this problem after filing your taxes with the IRS through TurboTax, you will have to wait until March 7 for TurboTax to be able to handle tax form 1040X to amend your return because of the mistake by TurboTax. Be sure to list that as your reason for omitting your estimated tax paid. Then you have to print, sign and mail in 1040X to the IRS. TurboTax can't do that electronically.
Oh, for your 2018 tax return TurboTax will still generate those quarterly 1040-ES forms for paying your 2019 estimated tax even though TurboTax did not apply it to your taxes owed for 2018.
