Randall Posted March 14, 2023 Report Share Posted March 14, 2023 I prepared a return for a dependent. Excess scholarship as income on line 8 from Sch 1. ATX calculated the standard deduction with W2 income plus $400. Parents came in and dependent came in over a week later to sign 8879. ATX made me recreate the efile and when I did, ATX used the excess scholarship income (as earned income) and increased the standard deduction up to the full amount. I guess ATX had a recent update. Anyone else see this. Just a heads up. 2 Quote Link to comment Share on other sites More sharing options...
RitaB Posted March 15, 2023 Report Share Posted March 15, 2023 On 3/14/2023 at 9:17 AM, Randall said: I prepared a return for a dependent. Excess scholarship as income on line 8 from Sch 1. ATX calculated the standard deduction with W2 income plus $400. Parents came in and dependent came in over a week later to sign 8879. ATX made me recreate the efile and when I did, ATX used the excess scholarship income (as earned income) and increased the standard deduction up to the full amount. I guess ATX had a recent update. Anyone else see this. Just a heads up. Yes, someone on the Facebook group reported an issue with the calculation being incorrect, and they fixed it. Thanks for the heads up, and I recommend making friends with "ATX Tax Software Support Group" if y'all have a Facebook account. 1 Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted March 15, 2023 Report Share Posted March 15, 2023 Just wondering but that sounds a bit bizarre to me. Was the program using the dependent standard deduction and then recalculated with the non-dependent standard deduction? Is this maybe what happened? I would check to see if dependency changed in the returns. Normally the excess scholarship funds to go on line 8 or 7 of the 1040. Different line for different years. Adding to or taking away from earned income shouldn't have any affect on the standard deduction or itemized deduction for that matter. Quote Link to comment Share on other sites More sharing options...
RitaB Posted March 15, 2023 Report Share Posted March 15, 2023 7 minutes ago, Terry D EA said: Just wondering but that sounds a bit bizarre to me. Was the program using the dependent standard deduction and then recalculated with the non-dependent standard deduction? Is this maybe what happened? I would check to see if dependency changed in the returns. Normally the excess scholarship funds to go on line 8 or 7 of the 1040. Different line for different years. Adding to or taking away from earned income shouldn't have any affect on the standard deduction or itemized deduction for that matter. It's a dependent return. A dependent with 2,000 earned income will have a different SD than a dependent with 5,000 earned income. Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted March 15, 2023 Report Share Posted March 15, 2023 Well see, there you go. I don't do too many returns like this and was not aware the SD differs based on earned income. Thanks!!! 1 Quote Link to comment Share on other sites More sharing options...
Randall Posted March 16, 2023 Author Report Share Posted March 16, 2023 Thanks for comments. I was unaware that the excess scholarship income would count as earned income for purposes of calculating the SD. As a matter of my normal routine, when there is a long wait between completing the return and client coming in to sign the 8879, when ATX forces me to recreate the efile, I always compare the return in the program with my pdf copy I had made previously. When I saw a difference, I starting looking. Yes, Terry, the program must have recalculated when I opened the return. 1 Quote Link to comment Share on other sites More sharing options...
Randall Posted March 16, 2023 Author Report Share Posted March 16, 2023 16 hours ago, RitaB said: Yes, someone on the Facebook group reported an issue with the calculation being incorrect, and they fixed it. Thanks for the heads up, and I recommend making friends with "ATX Tax Software Support Group" if y'all have a Facebook account. I am on that group but I haven't been paying much attention to it. I should start to look at the postings more. Thanks. 2 Quote Link to comment Share on other sites More sharing options...
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