Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

I use HR Block online to prepare my taxes. I have two sons…

Customer Question
I use HR Block online...
I use HR Block online to prepare my taxes. I have two sons who qualify as dependents. When I added the second son, the impact on my taxes owed was virtually nothing. I realize there's a phase-out, but AGI is $338,000 (and my filing status is married filing jointly) so I don't see why the phase-out impact would be almost 100%.
Does this experience make sense to you?
Submitted: 2 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 16 minutes by:
3/5/2016
Tax Professional: Lev, Tax Advisor replied 2 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,271
Experience: Taxes, Immigration, Labor Relations
Verified

The issue is

If the amount on line 38 is over $154,950 (that is AGI) - we need to use the Deduction for Exemptions Worksheet to figure your deduction for exemptions.

You might want to locate that worksheet in your software - it is named Deduction for Exemptions Worksheet—Line 42.

So - if you are filing Married filing jointly and your AGI is above $309,900 - deduction for exemptions is reduced significantly - and that likely what you experienced.

Normally each dependent will add $4000 in exemptions - but because of higher AGI - that would be ever lower.

Ask Your Own Tax Question
Customer reply replied 2 years ago

The HR block site is useless.

I found this example online:

Married couple with two children and AGI = $347,000: AGI exceeds phaseout start by $37,100 (= $347,000 - $309,900); divide that excess by $2,500 = 14.84, which rounds up to 15. Reduction is 30% (= 15 * 2%) of $16,000, which is $4,800.

Substituting my situation for those numbers, the reduction should be 22%. That means the incremental exemption for my second son should be 78% of $4,000, and assuming a marginal tax rate around 30% that should be worth more than $40!!

Tax Professional: Lev, Tax Advisor replied 2 years ago

Correct.

These calculations are are actually done on the worksheet I mentioned

- it is named Deduction for Exemptions Worksheet—Line 42.

If you are not able to locate it in your tax preparation software - You will find the worksheet in instructions

on page 41

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

You will see here same calculation you mentioned above.

Ask Your Own Tax Question
Customer reply replied 2 years ago

I created my own spreadsheet based upon the instructions. It seems as though you and I agree that there should be more than a $40 impact to the taxes I owe based upon the inclusion of my second son as a fourth exemption. So I guess that means the HR Block online tax program is flawed.

Do I start over and go with a different software? That seems like a HUGE burden. But I pay enough taxes that I'll refuse to pay a penny extra because of a flawed tax software.

Tax Professional: Lev, Tax Advisor replied 2 years ago

I do not think that the software is making so simple mistakes.

We need to know the exact reason.

So far - I run that worksheet for one and two dependents - and attaching the difference

Please verify what you have on line 42.

Ask Your Own Tax Question
Customer reply replied 2 years ago

I agree completely with your two scenarios. The difference between the two scenarios on Line 8 should be $3,040. Since that's a direct reduction in taxable income, my tax savings should be my marginal tax rate times the $3,040 figure. It's no where near that.

I even took the second son out completely, and it had zero impact on my tax owed. I don't trust this piece of shit program farther than I can throw it.

Am I generating a dollar-for-dollar increase in my alternative minimum tax for each dollar of savings generated by the added exemption???????

Tax Professional: Lev, Tax Advisor replied 2 years ago

If you will be able to share forms - I could verify.

It would be hard to guess...

can you also check what you have on line 45 and line 40 in each situation?

Ask Your Own Tax Question
Customer reply replied 2 years ago

No I can't. As far as I can tell, I won't be able to print a form until I pay and file it. That's the biggest problem I have. No way to review all the forms!!!

Tax Professional: Lev, Tax Advisor replied 2 years ago

That is the issue with all online software...

If you download and install software locally - you should be able to see forms.

Ask Your Own Tax Question
Customer reply replied 2 years ago

I was able to print out forms with 1 dependent exemptions, and other forms with 2 dependent exemptions. My taxable income does fall by $3,040 with the added exemption, and my tax falls by $1,003. However, my AMT increases by exactly $1,003, so there's no advantage to the second exemption. Annoying.

What triggers the dollar-for-dollar increase in AMT? Is it the President's personal opinion that I don't pay enough tax already?

Tax Professional: Lev, Tax Advisor replied 2 years ago

Ok - at least we know the item which affects your tax calculations.

How Is the AMT Calculated? The AMT is the excess of the tentative minimum tax over the regular tax. Thus, the AMT is owed only if the tentative minimum tax is greater than the regular tax.

The tentative minimum tax is figured separately from the regular tax. Individuals who claim certain tax benefits may owe AMT because these benefits are available ONLY for regular tax purposes.

If you owe AMT, you usually must file Form 6251, Alternative Minimum Tax – Individuals.

There are some items which trigger AMT. For instance - in calculating the AMT, we are not allowed to claim itemized deductions for state and local income tax, real estate taxes and personal property taxes, even though these are deductible on your regular return.

So your return is getting more and more complicated.

Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,271
33,271 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
I have a rental property for which I have a $9945 loss.
I have a rental property for which I have a $9945 loss. (Income vs expenses). The HR block software is not reporting it on Sch E. How do I override … read more
Marcia Mitrano
Marcia Mitrano
MBA
62 satisfied customers
2014 Home Mortgage Interest question: Premium paid is
2014 Home Mortgage Interest question: Premium paid is $1,026. Taxable amount is 71,903 What is the deduction?… read more
Jonathan Tierney
Jonathan Tierney
MBA
295 satisfied customers
As owner of 17.5% of an S-Corp I expect to make $50K to $100K
As owner of 17.5% of an S-Corp I expect to make $50K to $100K in profits. I now live in Israel and will not be working. My wife though will be working as a consultant and making approx. $80K/year. Wil… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Do I need to pay the 2.5% California 401k early withdrawal
Do I need to pay the 2.5% California 401k early withdrawal penalty as a nonresident? I current live in Virginia and has a rental property in California. That's why I needed to file with California as … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
I have a 403() account at work and, due to an error in our
I have a 403(b) account at work and, due to an error in our payroll department, did not make the max contribution in 2014. I am 57 years old. Can I still make a contribution today to an IRA that I hav… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
My daughter receives EIC on an income of $8500. She has a
My daughter receives EIC on an income of $8500. She has a traditional IRA that she could draw money from. Would withdrawing up to $7000 from the IRA effect the EIC?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I am on a conditional green card and I need to apply on Remove
I am on a conditional green card and I need to apply on Remove Conditions on Permanent Residence Based on Marriage in next next year 2014. My husband said that for this year 2012 we filed "married but… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,271 satisfied customers
Have education expenses for tuition totaling 12.000 for 2011
Have education expenses for tuition totaling 12.000 for 2011 tax return and "Question is can I as a teacher deduct the full amount for masters degree required to maintain teaching license in NYS ? And… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I recently got married and just started thinking about filing
I recently got married and just started thinking about filing next years taxes. Is it best to file as a married couple or file as married - but filing seperately? I make a significantly larger amount … read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,271 satisfied customers
What is better for a two physician couple (both working) in
What is better for a two physician couple (both working) in terms of total federal taxes paid – filing jointly or filing separately?… read more
Jesse Handel
Jesse Handel
Tax Preparer and Chemist
Bachelor's Degree
3 satisfied customers
Hello, I am a RE Professional and file as such, jointly with
Hello, I am a RE Professional and file as such, jointly with my wife, who has a W2. We have several rental properties out of state, with huge (obviously) losses in 2009. They could be entirely deducte… read more
Dr Arthur Rubin
Dr Arthur Rubin
Doctoral Degree
24 satisfied customers
We were recently married in November of 2009. Both of had
We were recently married in November of 2009. Both of had claimed head of household the year before. Both of were divorced with children. Combined our incomes are over $300k. Filing head of household … read more
Dr Arthur Rubin
Dr Arthur Rubin
Doctoral Degree
24 satisfied customers
I need to file for 2005, 2006 and 2007. I was Married in ...
I need to file for 2005, 2006 and 2007. I was Married in Sep of 05 and have filed for divorce on Sep of 07. I have no contact with my former spouse. I was told that I can''t file "head of household" f… read more
Ed Johnson
Ed Johnson
Senior HR Consultant and Business Devlpm
Bachelor's Degree
6,994 satisfied customers
How do I cash in EE government Bonds, in my name, for ...
How do I cash in EE government Bonds, in my name, for my son''s college tuition so that I get the best tax break? I have bonds that are from 1986 through 1995. I understand that there is a tax break i… read more
Marvin,EA
Marvin,EA
Enrolled Agent
Bachelor's Degree
1,605 satisfied customers
hi i need help my ex told me my taxes were completed it ...
hi i need help my ex told me my taxes were completed it turns out they were not done for the last 3 years can i go to h&r block and can they fix this? thank you lisa… read more
Wendy Reed
Wendy Reed
Master Tax Advisor Enrolled Agent
Master's Degree
60 satisfied customers
My 20 year old son lives with us. He is a full time ...
My 20 year old son lives with us. He is a full time student and received a form 1098-T from his school. This for has his SSN on it and an amount that was paid in block 1. Is this amount fully deductib… read more
Christopher Phelps
Christopher Phelps
Sole Practitioner
Master Degree
1,180 satisfied customers
How do I calculate the child tax credit for my 3 young sons
I purchased Turbo Tax Premiere and the child tax credit it is assigning me is $150. Last Year it was $1900, and little has changed. I have two 9 year olds and one 11 year old. I am filing jointly with… read more
Steven Weinstein, Esq
Steven Weinstein, Esq
Attorney
Post-Doctoral Degree
54 satisfied customers
I qualified for a child tax credit in 2005 but the preparer ...
I qualified for a child tax credit in 2005 but the preparer who did my 2004 taxes didn't include a child tax credit. My situation hasn't changed... should I file a 1040x to amend my 2004 taxes, and ho… read more
Steven Weinstein, Esq
Steven Weinstein, Esq
Attorney
Post-Doctoral Degree
54 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x