I recently found an error in the way that TaxCut handles some 401k payments. This may not apply to may people but for those it does affect it can be an expensive error. The people who would be affected are those that:
- Made the full 000 401k investment in 2005 and
- Were over 50 and made additional 401k investments under the catch-up provision of the law. According to the law up to 00 additional can be invested in a 401k in 2005 and the total of 000 can be tax deferred. Well, my W2 properly reported the 000 in box 12 and my income less the 000 in box 1. For the sake of discussion let us say that box 1 was 0,000. TaxCut increased my wages as reported on 1040 line 7 to 4,000 (reporting the 00 as exces salary deferral) even though I entered my age as 54. I have reported this to HRBlock but, so far, they don't seem to understand that this is an error in their program.
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