Turbotax - 2005 Tax Year

To my understanding not. However, I don't think you will see a difference in your Taxes (unless the cents jump up to the next rate).

"Dennis G. Rears" wrote in news:OUExf.422$r snipped-for-privacy@fe09.lga:

I am curious why you want to do this. AFAIK when the IRS loads your data into their systems, it rounds to the nearest dollar.

Why? They are just following IRS guidelines.....

Not that it makes much of a difference in the end, but the IRS says "you may round" but TurboTax (and probably most other tax software) behaves as "you must".

I don't think the IRS rounds the numbers if one doesn't, as I've filed forms with amounts not rounded and received refunds with fractional dollars in the past.

-- HASM

Personality quirk. I'm a mathematician by degree and I love numbers. Rounding numbers is a perversion to me. I don't care what the IRS loads in.

dennis

I think you're right. I've gotten used to the rounding thing, and don't mind it now at all, but I think I'd prefer to have 2 decimal points, just so figures in TurboTax would exactly match my records. There is something reassuring about having things match to the penny. I haven't paid enough attention to what happens in TurboTax, but in a Schedule C, for example, if you had $.49 in advertising expenses and $.49 in utilities, and those were your total expenses, in my books, that would be almost a dollar in total expenses. In TurboTax, and I suppose with the IRS, your total expenses would be $.00, or rather $0, since $.49 would round down to $0 both times.

Jim

Not so. If amounts are summed, TurboTax uses the .49 numbers even though it did not display them when you entered them - and rounds the total.

Doug

Really?! (Not doubting you,) but this must amount to an audit flag. Zero plus zero equals 1? And of course this can work the other way.

51 cents rounds to $1, so I could have three entries in TurboTax that appears as $1 each, yet TurboTax sums 1+1+1=2?

This would really seem to miss the whole point of rounding. I think the assumption should be that, even rounded, 1+1+1 should always =3, and that to the extent that is incorrect sometimes, those times will be counteracted by the times that rounding goes the other way.

If what you are saying is correct, the IRS would presumably have to have access to the figures to the right of the decimal point, otherwise, I would think they would have to reject the filing for math errors.

Furthermore, TurboTax at least implicitly encourages you to enter $.49 as 0, and $.98 as 1, so it is not always the thing doing the rounding.

Jim

I don't have T-Tax running, but I believe you are incorrect in your response to Jim Garrett.

Jim Garrett's example of Schedule C entries for advertising and utilities are for different sections of the form. I believe T-Tax would add those two expenses as $0.00 + $0.00 = $0.00.

Now, if he had more expenses for advertising, and opened a supporting window to itemize them, such as: "Playboy" $0.49 "Deacon's Daily" $0.03

Then his advertising total would be $1.00. If his only other Sched C expense was his utilities at $0.49, his total Sched C expense would also be $1.00 ($1.00 + $0.00 = $1.00).

Jim Garrett wrote in news: snipped-for-privacy@4ax.com:

Well, try to figure out whether the IRS receives the final sum, or all the in-between sums, or the original numbers (all those $0.49 cents in the collection plate).

I just fired up TT04 and amended my Sch C with 3 expense lines that had been blank. I keyed in .49 in each. TT changed my entries to 0 each time, of course. The "Total expenses' (line 28) did not change at all. 0+0+0=0, even though all zeroes represented .49 rounded down.

Sorry I didn't go to this trouble earlier.

(I didn't save my return.)

Jim

Well, I tried it on my Sked E before I posted, and it did indeed add the sub-dollar amounts. I wonder if the program is not consistent form-to-form?

Pehaps others should experiment and report back.... Doug

Jim Garrett wrote:

Please describe what entries you entered and where.

Rick Hess

From a tax classes I took several year ago: For the record, the IRS prefers rounding cents to the nearest dollar on all individual tax returns. When rounding income from multiple source documents, you may round the amount on each document to the nearest dollar, or you may add the amounts first then round the total.

Personally, I think rounding also increases accuracy of data entry (both outgoing on your return and incoming on the IRS keying if used), but that's a personal feeling.

Though I wouldn't use accuracy, that's probably "true", when entering and adding the data by hand, which traditionally made up the large majority of returns. When we're talking about computer programs, I fail to see why a computer will be more "accurate" rounding to whole numbers.

The interesting thing is that even though the final tax could be computed exactly, using tax brackets and percentages, the IRS wants one to use the tax tables for taxable amounts less than 100k, and these are quantized every 50 dollars (every 5 dollars up to 1k, and every 25 dollars between 1k and 3k).

Using the quantized tables, rounding or no rounding will result in the same tax amount for almost all cases, in a statistical sense.

-- HASM

All seems true enough, but as the original poster did say, he's a mathematician (So am I, by training) and I do know the feeling of ensuring things are accurate down to the cents.