# Carefull with Tax Software



## FFMralph (Dec 22, 2012)

Just a word to the wise. 
Whenever using tax preperation software, be sure to always double check the results.

I found a severe error in TaxAct when reporting *Capital Gains *and taking the *Foreign Earned Income Exclusion*.

It seems the *Qualified Dividends and Capital Gain Tax Worksheet *and the *Foreign Earned Income Tax Worksheet * are not synchronized with each other. This results in an incorrect *Foreign Earned Income Tax Worksheet*.

The error has been reported to TaxAct who is currently looking into the matter.


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## koppazee (Mar 11, 2011)

FFMralph said:


> Just a word to the wise.
> Whenever using tax preperation software, be sure to always double check the results.
> 
> I found a severe error in TaxAct when reporting *Capital Gains *and taking the *Foreign Earned Income Exclusion*.
> ...


Last week, I too experienced an error using TaxAct related to the IRS form 2555-EZ, Foreign Earned Income Exclusion. 

In the end, I sharpened my pencil, set aside several hours and did my own "old fashioned" method to file. Now, I just need the courage to do the same with my state return. Just looking at my blank state form, I wonder if I need a Rocket Science degree from MIT to complete it. Who in the world actually writes the laws and designs these forms anyway? I suspect for my state it is a group of Poindexters with bow ties, horned rimmed glasses and pocket protectors. Just stereotyping!


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## xali (Feb 19, 2014)

"Just looking at my blank state form, I wonder if I need a Rocket Science degree from MIT to complete it." 

Do you mean you have to file US state taxes when you live abroad? Could you please clarify that? Thanks.


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## Bevdeforges (Nov 16, 2007)

xali said:


> "Just looking at my blank state form, I wonder if I need a Rocket Science degree from MIT to complete it."
> 
> Do you mean you have to file US state taxes when you live abroad? Could you please clarify that? Thanks.


Normally, no, you don't have to file state returns once you are established as resident abroad. Koppazee is in a sort of awkward situation where he is working for a company that withholds state taxes - and he needs to file to get them back. (One of the big disadvantages of continuing to "telecommute" to your old job back home after relocating overseas.)
Cheers,
Bev


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## koppazee (Mar 11, 2011)

xali said:


> "Just looking at my blank state form, I wonder if I need a Rocket Science degree from MIT to complete it." Do you mean you have to file US state taxes when you live abroad? Could you please clarify that? Thanks.


The New York State iT-203 is the form I refer to. Too bad there is not a notation on the forms that say it is anticipated that it will take X amount of time to complete this for the average filer. It might help if this was there to bring light to the need for that Rocket Science degree from MIT. Warm regards!


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## koppazee (Mar 11, 2011)

Bevdeforges said:


> Normally, no, you don't have to file state returns once you are established as resident abroad. Koppazee is in a sort of awkward situation where he is working for a company that withholds state taxes - and he needs to file to get them back. (One of the big disadvantages of continuing to "telecommute" to your old job back home after relocating overseas.) Cheers, Bev


Thanks Bev for explaining it for me. I suspect that I will still need to file the State tax forms for as long as I work for the. As they are withholding these taxes, right? Warm regards!


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## Bevdeforges (Nov 16, 2007)

koppazee said:


> Thanks Bev for explaining it for me. I suspect that I will still need to file the State tax forms for as long as I work for the. As they are withholding these taxes, right? Warm regards!


Probably - but IMO you ought to be filing the NR forms (non-resident). I'm pretty sure New York has an NR form (or maybe that's what you're filing already - they don't all have the NR prefix or suffix). 
Cheers,
Bev


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## FFMralph (Dec 22, 2012)

TaxAct reviewed my data and determined that it was not in error. The *Qualified Dividends and Capital Gain Tax Worksheet * was not required because my taxable income was 0.

I must say, I have emailed them three times and have always received a answer within one work day!


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## Bevdeforges (Nov 16, 2007)

FFMralph said:


> TaxAct reviewed my data and determined that it was not in error. The *Qualified Dividends and Capital Gain Tax Worksheet * was not required because my taxable income was 0.
> 
> I must say, I have emailed them three times and have always received a answer within one work day!


I was going to suggest something like that, because the dividends and capital gains have nothing to do with the FEIE. Only "earned" income is subject to the FEIE. But if you had significant income from dividends and capital gains and then had itemized deductions that applied to both types of income, those might have to be apportioned between the part of your income that was and wasn't excluded. 

I have to admit, I have had pretty good luck so far with TaxAct, so I'm glad to hear they haven't been making big errors.
Cheers,
Bev


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