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Posted by sirto on April 14, 2006, 4:04 am
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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:
1. Made the full $14000 401k investment in 2005 and
2. Were over 50 and made additional 401k investments under
the catch-up provision of the law.
According to the law up to $4000 additional can be invested
in a 401k in 2005 and the total of $18000 can be tax
deferred.
Well, my W2 properly reported the $18000 in box 12 and my
income less the $18000 in box 1. For the sake of discussion
let us say that box 1 was $100,000.
TaxCut increased my wages as reported on 1040 line 7 to
$104,000 (reporting the $4000 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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