Tax Planner Results Don't Match TurboTax

TheBobster

I just completed my federal tax return for 2021 using TurboTax, and I compared it with the 2021 forecast in Tax Planner. The line items are all correct -- adjusted gross income, deductions, taxable income, etc., but the projected tax is $1,330 higher in Tax Planner than in my TurboTax return. This is annoying because I based my quarterly estimated taxes on Tax Planner. Has anyone else seen this? I'd like to know what caused it.

Chris_QPW

There are lots of things that trip up the Tax Planner.  I learned long ago that it can't be trusted for more than a ballpark estimate for a lot of use cases.  I use my tax program for estimating quarterly taxes.

markus1957

My first guess is you don't have an accurate estimate of Qualified Dividends in the dividends section. That is causing the value in the dividends box to be taxed as regular income rather than at the lower rate for QDI. It's a manual input as Quicken doesn't have the capability (yet) to automatically track QDI at the transaction level. Take a look at TurboTax form 1040 Line 3a and insert the value for QDI into Tax Planner. The projected tax in the planner should converge with TurboTax.

Taxable social security is another value that requires special treatment in Quicken, but since you indicated Taxable Income matched up, it is not likely a factor in your case.

I can get Tax Planner to come within a few dollars of TurboTax. It is a useful tool and it would be time well spent if you can track down the source of the discrepancy and resolve it.

Sherlock

Quicken's Tax Planner tends to over estimate the tax we have due as there are many factors that it doesn't have access to.  For example, consider qualified dividends. 

Regarding estimated taxes, they can be managed in a few ways,  The simplest being to pay 110% of the previous years taxes.  What we do is export a customized Tax Summary report regularly into a spreadsheet we maintain for our particular situation with the appropriate annual adjustments to provide better quarterly tax estimates. 

Note: Depending on your situation, TurboTax may also have you overpay.  It certainly does a better job than Quicken's Tax Planner but, like any program, it has its issues and limitations.  We do use TurboTax annually and reconcile any differences with our spreadsheet and set overrides in TurboTax where necessary.

Rocket J Squirrel

I have things in my 1040 that never appear in Quicken but affect my bottom line tax. I have oddball boxes and amounts like 1099-DIV Box 5, "Section 199A Dividends". I don't even know what that is, but it downloaded from my broker so I believe it, despite its failure to appear in Quicken.