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Updates


2001 Windows Workarounds and Other Problems

1099-R Worksheet with Distribution code "P" or "D"
Users Affected: You are affected by this problem if you (and/or your spouse, if married filing jointly) received a 2001 Form 1099-R with distribution code "P" or "D" in box 7.

Note: Code P covers certain distributions that are taxable in 2000 and code D covers certain distributions that are taxable in 1999.

Problem: The taxable amount from Form 1099-R, box 2a may be included incorrectly on the wages line of your return (Form 1040, line 7; Form 1040A, line 7; or Form 1040EZ, line 1).

Solution: If the wages line of your return incorrectly includes the taxable amount from box 2a of Form 1099-R, follow the steps listed below to correct the problem:

  • On the Forms menu in TaxCut, select Open Forms.
  • Select the Non-W2 Wages Worksheet.
  • On line 8 of the Worksheet, select the column for "You" or "Spouse" (as appropriate).
  • Subtract the amount shown in box 2a of the corresponding Form 1099-R from the amount shown on line 8 of the Non-W2 Wages Worksheet.
  • On line 8 of the Non-W2 Wages Worksheet, override the amount with the difference.
    Note: This will not prevent you from e-filing.
  • Click Close Form and click Close Window to close Forms Central.

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Updating TaxCut Federal Version 5607 to Version 6001
Users Affected: You are affected if you meet both of the following conditions:

  • You are running TaxCut federal version 5607. To determine the TaxCut version number, select Help from the main menu, and then select About TaxCut.
  • When you check for a program update from within TaxCut, you receive a message indicating that you are running the latest federal version.

Problem: Some users running TaxCut federal version 5607 may incorrectly receive a message indicating that they are running the most current version of TaxCut federal edition. However, a program update is available that updates TaxCut federal version 5607 to version 6001.

Note: This problem does not affect TaxCut state editions.

Solution: Complete the following steps to correct this problem.

  1. To determine the TaxCut federal version number, select Help from the main menu, and then select About TaxCut.
  2. If the federal version is not 6001, click here and follow the instructions to download and install the update from our Web site.

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Taxpayers Who Were Directly Affected by the September 11 Terrorist Attacks and Owe an Underpayment Penalty.
Users Affected: You are affected by this problem if you meet all of these conditions:

  • You owe a penalty for underpaying your estimated tax;
  • You calculated your penalty using the Regular Method described in Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, and you did not use the Short Method;
  • You checked the box at the top of TaxCut's Form 2210 indicating that you were directly affected by the September 11, 2001 terrorist attacks. Note: Taxpayers who were directly affected by the attacks are described in the IRS instructions to Form 2210 and include victims, relief workers, taxpayers whose principal residence or place of employment is in one of the covered disaster areas, and taxpayers whose records were maintained in a covered disaster area;
  • You had Federal income tax withheld or excess social security or railroad retirement tax ("withheld tax"); and
  • You did not check box 1c at the top of Form 2210 electing to have your withheld tax treated as paid on the dates it was actually withheld.

Problem: For purposes of calculating the penalty in Section B of Part IV of Form 2210, TaxCut treats your withheld tax as being paid 25% on April 15, 2001, 25% on June 15, 2001, and 50% on January 15, 2002. TaxCut should treat your withheld tax as being paid 25% on April 15, 2001, 25% on June 15, 2001, 25% on September 24, 2001, and 25% on January 15, 2002. TaxCut's approach can result in an underpayment penalty that is too high.
Solution: If you do not need to file Form 2210, follow one of these steps:

  • Wait for the IRS to determine the penalty for you. The IRS strongly encourages this. To have the IRS determine the penalty, go to line 71 of Form 1040 (line 46 of Form 1040A) and override the amount shown there so that the line is blank. File your return by April 15, 2002, to avoid interest on the penalty.


    • -OR-

  • Recalculate your underpayment penalty following the IRS instructions to Form 2210. Enter the correct amount of the underpayment penalty on line 71 of Form 1040 (line 46 of Form 1040A).
If you need to file Form 2210, follow these steps:
  1. Recalculate your underpayment penalty following the IRS instructions to Form 2210.
  2. Enter the correct amounts in Part IV, Section B of Form 2210.
  3. Make sure that the penalty amount from line 37 of the corrected Form 2210 appears on line 71 of Form 1040 (line 46 of Form 1040A).

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Keogh/SEP/SIMPLE Worksheet
Users Affected: You are affected by this problem if you used TaxCut version 4301 to enter any of the plans listed below for yourself and your spouse:

  • Keogh Defined Benefit plan
  • SIMPLE plan
  • more than one Keogh Profit-Sharing plan
  • more than one Keogh Money Purchase plan
  • more than one SEP-IRA plan
  • any combination of multiple plans
Note: To determine the TaxCut version number, select Help from the main menu, and then select About TaxCut.

Problem: The information entered for the Keogh/SEP/SIMPLE plans using TaxCut version 4301 may not appear after updating TaxCut.
Solution: Once you have updated TaxCut, follow these steps to correct this problem:

  1. Manually recalculate the deductible contribution to the Keogh/SEP/SIMPLE Plan(s) for yourself and your spouse.
  2. Use the Take Me To... button to return to the Keogh, SEP, and SIMPLE Contributions interview topic.
  3. Re-enter the data and Plan amounts for yourself and your spouse. Note: Be sure to select "More than one plan or type of plan" on the Number of Plans interview screen.

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Rate Reduction Credit And Offset of Advance Payments.
Users Affected: You are affected by this problem if you meet all of these conditions:

  • You are using the Forms method to prepare your return in TaxCut;
  • You are completing line 6 on the Background Worksheet -- Advance Payment Check From IRS (Rebate Check); and
  • All or a part of your advance payment was used by the IRS to pay back taxes, student loans, child support, or other obligations.

Problem: The text of line 6 does not explicitly state that the amount, if any, to be entered is the amount of the advance payment before it was used by the IRS to pay the back taxes, student loans, child support, etc.
Solution: Enter on line 6 of the Background Worksheet the amount of your advance payment before it was used by the IRS to pay back taxes, student loans, child support, etc. You may consult the Rebate Check (Rate Reduction Credit) topic of the Interview for more information. You may also call the IRS automated telephone tax line at (800) 829-4477 to find out about advance payments.

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TaxCut version 4301 fails to update IRS Publications
Users Affected: You are affected by this if problem if you are a Deluxe user who is updateing version 4301.

Problem: Updating TaxCut version 4301 does not also update IRS Publications. When IRS Publications are updated separately, you may not be prompted to restart your system to view updated IRS Publications.
Solution: Complete the following instructions to update your IRS publications within TaxCut:

  1. Be sure you have the most recent program update. From the Tools menu, select Update TaxCut. Follow the onscreen instructions to complete the update.
  2. From the Tools menu, select Update Publications. Follow the onscreen instructions to complete the update.
  3. Restart your PC even if the Restart dialog box does not appear. Note: You will not be able to view updated publications without restarting your PC.
  4. Open TaxCut.
  5. To verify the publications update, click Help and then click IRS Publications.
  6. Select "Publication 17, Your Federal Income Tax". If IRS Publications have been successfully updated, "Publication 17 - 2001 Tax Year" should display. If the Publication 17 for 2001 does not display, return to Step 2.

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Updating IRS Publications
Users Affected: You are affected by this problem only if you are a Deluxe version user attempting to review a 2001 IRS publication.

Problem: Not all IRS publications were finalized at the time we released this update.
Solution: You need to update your IRS publications from the Windows Start menu (Start->Programs->TaxCut 2001->Update IRS Publications). This will give you the most recent versions of publications.

However, the following publications were not finalized at the time we released this update:
  • Publication 463, Travel, Entertainment, Gift, and Car Expenses
  • Publication 504, Divorced or Separated Individuals
  • Publication 505, Tax Withholding and Estimated Tax
  • Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers
  • Publication 523, Selling Your Home
  • Publication 526, Charitable Contributions
  • Publication 527, Residential Rental Property (Including Rental of Vacation Homes)
  • Publication 550, Investment Income and Expenses
  • Publication 551, Basis of Assets
  • Publication 560, Retirement Plans for Small Business
  • Publication 564, Mutual Fund Distributions
  • Publication 583, Starting a Business and Keeping Records
  • Publication 590, Individual Retirement Arrangements
  • Publication 926, Household Employer's Tax Guide
  • Publication 929, Tax Rules for Children and Dependents
  • Publication 936, Home Mortgage Interest Deduction
  • Publication 946, How to Depreciate Property
  • Publication 1212, List of Original Issue Discount Instruments

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Microsoft Money 2002 Import
Users Affected: You are affected by this problem only if you meet all of the following conditions:

  • You are a Windows 95 user;
  • You imported Microsoft Money 2002 account information; and
  • You imported more than six accounts.

Problem: If you are importing information from more than six accounts, the scroll bar in the Select Your Accounts window, which lists all the accounts, will not allow you to scroll through the entire list. Because of this, you may not be able to see or access accounts at the bottom of the list.
Solution: All your account information will be successfully imported. The accuracy of your return is not affected in any way.

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Screen Display of Microsoft Money 2001 Capital Gains Report
Users Affected: You are affected by this problem only if you imported capital gains information from Microsoft Money 2001.

Problem: The Review Import Report does not correctly display the imported information; however, all the information is carried over successfully and the report prints accurately.
Solution: Since this is a display-issue only, it does not in any way affect the printing or accuracy of your return. You will be able to review and edit any information as you complete the Capital Gains and Losses Interview.

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"Review Your Entries" Report
Users Affected: You are affected by this problem only if your return includes more than 15 forms.

Problem: The Review Your Entries Report will display and print blank fields.
Solution: Print and review your tax return to verify that the amounts you entered are correct.

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Electronic Filing: Contributing to Express IRA or Express Investor Account
Users Affected: You are affected by this problem only if you meet both of the following conditions:

  • You are filing your tax return electronically; and
  • You are funding an Express IRA or Express Investor account for an amount identical to your tax refund.

Problem: TaxCut stops you from filing electronically and asks you to enter information about your bank account which is not needed to process your return.
Solution: The update corrects this problem.

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Importing Microsoft Money 2001 or 2002 File
Users Affected: You are affected by this problem if you are importing information from Money 2001 or Money 2002.

Problem: If you start TaxCut without first opening Money, and then import your 2001 tax information, your tax information from 2002 may be imported instead of information from 2001.
Solution: Follow these steps to correct this problem. To import your 2001 tax information from Money:

  1. Close TaxCut if it is open.
  2. Open Money.
  3. If you are using Money 2002, go to Money's Taxes menu and select Export to TaxCut. If you are using Money 2001, go to Money's Taxes menu, choose TaxCenter, and from this screen select Export to TaxCut.
  4. Choose the tax year 2001 on the first screen, then check the categories you want to import on the second screen.
  5. With Money open, start TaxCut as you normally would (from the Start menu or the TaxCut shortcut icon.
  6. Go through the Welcome to TaxCut Interview. If you need to go to this Interview, click the Take Me To … button, scroll to the top of the list, and click Welcome to TaxCut.
  7. If you need to load a tax return file from last year, follow the instructions on the Load Last Year’s Data screen.
  8. From the Import Financial Information screen, follow the steps to import your financial information from Money.

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