2018 Lacerte Tax Update is available for download on 7/10/2019 (Version 39.0710). This update includes the following items;
US Self Employment Income not Included in SE Retirement Reduction for QBI
When we have a Sch C in screen 16 with the box Exclude SE earnings from SE retirement plan deduction (code 889) and another source of SE income, we are correctly excluding the activity from the SE retirement deduction calculations. However, when calculating QBI for the activities, we are applying a portion of the SE pension deduction against the activity that was excluded from the calculation. Based on the 199A regs available: https://www.irs.gov/pub/irs-drop/td-reg-107892-18.pdf the activities that were excluded from the deduction calculation should not have any amount of that deduction applied against it's QBI amount, since the gross income from this activity was not utilized in the calculation of the SE retirement deduction.
For purposes of section 199A, deductions such as the deductible portion of the tax on self-employment income under section 164(f), the self-employed health insurance deduction under section 162(l), and the deduction for contributions to qualified retirement plans under section 404 are considered attributable to a trade or business to the extent that the individual’s gross income from the trade or business is taken into account in calculating the allowable deduction, on a proportionate basis.
US Diagnostic Ref. 52131 Incorrectly Effected by PDF Attachment Setting
The following diagnostic is generated;
e-file: Electronic filing is not allowed if taxpayer has a domestic production activities deduction passed through from an agricultural or horticultural cooperative under DPAD 199A(g)(section 199A(g)). This return must be filed as a conventional paper return. (ref. #52131)
When the setting "Auto Generated and Attach PDFs to Efiles" is set to 'Yes', this diagnostic clears. The diagnostic itself doesn't say anything about attaching a PDF file.
The setting should not cause this diagnostic to clear. This results in the ability to file a return without the required attachment.
MD Form 502 Line 22 Includes EIC When Federal EIC Not Claimed
When viewing a Maryland Married Filing Separate return, Maryland Form 502, line 22 includes EIC when Federal EIC is not claimed due to the filing status.
According to the Maryland Instruction 18, this is only allowed if the Filing Status for Maryland is Married Filing Separately and Federal is Married Filing Joint.
NJ E-file Reject 116 and 118 References Incorrect Form Lines and Product
When this New Jersey rejection is received, the resolution provided references incorrect form lines and solutions for ProSeries.
The reject indicates the tax on line 47 and the total tax due contain computation errors. When reviewing the files, there are no overrides present that would affect this calculation of penalties and interest.
Error Code 118: NJ-1040 Line 54 Amount of Tax You Owe Contains a Calculation Error.
In the 2018 Tax Year, Line 54 reads Property Tax Credit (See instructions page 25) 2017 tax year, line 54 is amount of tax you owe.
Error Code 116: NJ-1040 - No override is allowed. Please review your return and make the appropriate corrections and re-transmit. However, if the problem persists, print the return and file via US Mail to the appropriate taxing authority.
NJ E-file Rejection Code 370 for Section 956 Income Displayed Twice on Statement
When filing a New Jersey Married Filing Joint return, half of the section 965 income is showing twice on the statement for line 26, Other Income.
If the return filing status is switched to the Single, the full amount is displayed once. This seems to be causing the return to be rejected.
NY Unable to Force Actual Expenses on Form IT-196 Employee Business Expense Worksheet Step 6
When a vehicle is entered on either Screen 22, Deprecation or Screen 30, Employee Business Expenses, it is not possible to force the actual expenses and utilize step 6.
Lacerte optimizes and uses the greater of the mileage or the actual expense however the guidance within the NY instructions for this indicate that mileage can only be utilized if it a new asset for 2018 or if mileage was taken the first year the asset was placed in service. or you leased the vehicle.