< 1999 Macintosh Calculation Alerts

The update for the 1999 Macintosh and Macintosh Deluxe editions of TaxCut fixes all calculation alerts listed below.

Child/Dependent Care Worksheet -- Child Care Provided by an Employer
Users Affected: This problem affects you if both conditions apply to you:

• You (or your spouse if Married Filing Jointly) were covered by your employer's dependent care plan, and your employer furnished the care (either at your workplace or by hiring a care provider). If this condition applies to you, there should be an amount in box 10 of your W-2, and the box in the "Additional Information for Box 10 (Dependent Care Benefits)" section of TaxCut's W-2 Worksheet should be checked.
• You (or your spouse) are claiming the credit for child/dependent care expenses.

Problem: TaxCut may calculate your credit for child/dependent care expenses incorrectly.
Solution: The update corrects this problem. If you have already entered your dependent care expenses, you'll need to complete these additional steps after installing the update:

1. On the Prepare tab, click the Forms button (located in the bottom right corner).
2. If the list of TaxCut forms isn't displayed, click the All Forms button at the bottom of the window.
3. Open the Child/Dependent Care Worksheet, which is listed under Form 2441.
4. Review the qualified expenses you entered in Part II, Information About Qualifying Persons, and include qualified expenses you incurred and paid in connection with care that your employer furnished. You do not need to adjust your entries in Part I, Information About Care Providers.
5. Save your changes before closing the form.

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8606 Worksheet and Recharacterized Roth IRA Conversions
Users Affected: This problem affects you only if all these conditions apply to you:

• You (or your spouse, if your filing status is Married Filing Jointly) converted part or all of a traditional, SEP, or SIMPLE IRA to a Roth IRA in 1999, but later reversed part or all of the conversion by "recharacterizing" it back to a traditional, SEP, or SIMPLE IRA.
• You (or your spouse) contributed to a traditional IRA for 1999.
• Your return includes a copy of TaxCut's 8606 Worksheet (this is a special form different from Form 8606 itself).

Problem: Your recharacterized conversions were not being entered on the 8606 Worksheet. This could result in an incorrect calculation of your IRA deduction or taxable IRA distributions.
Solution: The update corrects this problem.

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Roth IRA Contributions and 1998 IRA Conversions
Users Affected: This problem affects you only if both of these conditions apply to you:

• You (or your spouse, if your filing status is Married Filing Jointly) contributed to a Roth IRA for 1999.
• You (or your spouse) converted to a Roth IRA in 1998 and are spreading the conversion income over four years.

Problem: When calculating your maximum 1999 Roth IRA contribution, TaxCut was incorrectly including in modified adjusted gross income the portion of your 1998 conversion that is taxable in 1999.
Solution: The update corrects this problem.

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Schedule D -- Reporting the Sale of Section 1250 Property
Users Affected: This problem affects you only if both of these conditions apply to you:

• You are filing more than one copy of Form 4797; and
• On the second or third copy of Form 4797 you reported a sale of Section 1250 property in
  Part III.

Problem: If you used the second or third copy of Form 4797 to report a sale of section 1250 property, tax on the gain was calculated at the long-term capital gain rate, rather than at 25%.
Solution: The update corrects this problem.

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Earned Income Credit -- Rental Activities
Users Affected: You are affected only if both these conditions apply to you:

• You are taking, or want to take, the earned income credit; and
• You have income or loss from a rental activity.

Problem: In certain special situations, your investment income or modified adjusted gross income may be calculated incorrectly for purposes of determining your eligibility for, or the amount of, your earned income credit.
Solution: The update corrects this problem.

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Earned Income Credit and Direct Rollover of Distribution
Users Affected: You are affected by this problem if you meet both of these conditions:

• You are claiming or would like to claim the earned income credit (EIC).
• Your return includes a Form 1099-R showing a direct rollover of a distribution (code G or H should appear in box 7 of the 1099-R).

Problem: When calculating modified adjusted gross income for purposes of the EIC, TaxCut does not exclude the amount of the direct rollover.
Solution: The update corrects this problem .

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Distributions from Roth IRAs and Roth IRA Conversions
Users Affected: You are affected by this problem if you (and/or your spouse, if married filing jointly) meet all of these conditions:

• You (or your spouse, if filing status is married filing jointly) received a distribution from a Roth IRA in 1999.
• You (or your spouse, if filing status is married filing jointly) converted part or all of a traditional, SEP, or SIMPLE IRA to a Roth IRA in 1999.
• Your modified adjusted gross income (i) drops from above $100,000 to $100,000 or below, or (ii) increases from $100,000 or below to above $100,000.

Problem: TaxCut may not calculate your modified adjusted gross income correctly in these circumstances. This can result in a valid Roth IRA conversion being incorrectly treated as an erroneous conversion, or an erroneous conversion being incorrectly treated as a valid conversion.
Solution: The update corrects this problem .

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Erroneous 1999 Conversion to Roth IRA and 1998 Conversion Taxable in 1999
Users Affected: You are affected by this problem if you meet both of these conditions:

• You (or your spouse, if filing status is married filing jointly) converted a traditional, SEP, or SIMPLE IRA to a Roth IRA in 1998 and chose to spread the taxable income from the conversion over four years.
• You (or your spouse, if filing status is married filing jointly) also converted a traditional, SEP, or SIMPLE IRA to a Roth IRA in 1999, and this conversion was treated by TaxCut as an erroneous conversion because your modified adjusted gross income exceeded $100,000.

Problem: In calculating modified adjusted gross income for purposes of the 1999 conversion, TaxCut did not exclude the portion of your (and/or your spouse's) 1998 conversion taxable in 1999. As a result, the 1999 conversion may have incorrectly been treated as an erroneous conversion.
Solution: The update corrects this problem .

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Schedule SE -- Schedule C or Schedule F with No Material Participation
Users Affected: This problem affects you only if you meet both of these conditions:

• You completed a Schedule C or Schedule F; and
• On the Schedule C or Schedule F, you indicated that you did not materially participate in the activity (see line G of Schedule C or line E of Scheudle F).

Problem: TaxCut does not carry line 31 of Schedule C to line 2 of Schedule SE (or line 36 of Schedule F to line 1 of Schedule SE).
Solution: Follow the steps listed below to correct the problem.

1. On the Prepare tab, click the Forms button.
2. Open Schedule SE.
3. Review lines 1 and 2.
4. If the amount on line 1 does not match the amount on line 36 of Schedule F or the amount on line 2 does not match the amount on line 31 of Schedule C, override and correct the amount:

• Click on the line, and click the Entry Info icon (the green button to the left of the line).
• In the Entry Info dialog box, check the Override checkbox, and then enter the correct amount.
• Click the OK button, then click the Close button.

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Form 6251 -- Part IV, Line 24, Computation Using Maximum Capital Gains Rates
Users Affected: This problem affects you only if Part IV of Form 6251 is used to calculate line 24 of Form 6251. (Part IV of Form 6251 will be completed only if it is used to calculate line 24.)

Problem: TaxCut may not have accurately refigured the Schedule D amounts on lines 30, 31, and 33 of Form 6251 for Alternative Minimum Tax (AMT) purposes.
Solution: Follow the steps listed below to correct the problem.

1. On the Prepare tab, click the Forms button.
2. Open Form 6251.
3. Review the entries on lines 30, 31, and 33.
4. If the amounts are incorrect, override and correct them:

• Click on the line, and click the Entry Info icon (the green button to the left of the line).
• In the Entry Info dialog box, check the Override checkbox, and then enter the correct amount.
• Click the OK button, then click the Close button.

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Depreciation Worksheet -- Number of Years over Which Asset is Being Depreciated
Users Affected: This problem affects you only if all these conditions apply:

• You depreciated an asset directly on TaxCut's Depreciation Worksheet or through one of TaxCut's Interview topics;
• You manually entered the number of years over which the asset is being depreciated; and
• You mistakenly entered a decimal point in the number of years. For example, you entered ".05" instead of "5".

Problem: TaxCut does not flag the entry as incorrect.
Solution: Follow the steps below to correct the problem:

1. On the Prepare tab, click the Forms button.
2. Open the Depreciation Worksheet. It is one of the three forms listed under Form 4562.
3. Review your entry on line 13.
4. Correct the entry if it is wrong.

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