Critical Diagnostic needed for Dividend income entries exceeding the Total Ordinary Dividends input
I’m requesting a critical diagnostic and better instructions for the 1099-Div input screen (Personal return).
Proconnect allows the user to make entries in the fields for Qualified Dividends, Capital Gain Distributions, and US Bonds.
The program only carries the input for “Total Ordinary Dividends” to Schedule B Part II. Any amounts entered in the 3 other fields listed above do not get included in Dividend income, they are used to tell the program how much of the total ordinary dividends are taxed differently. For example, an entry in US Bonds makes that amount not taxable to the state.
While this is correct, it should give a critical diagnostic if the sum of the amounts in these other 3 fields exceed the amount in the total ordinary dividends field.
I’m posting this because US bond income from 1099-Int were erroneously entered in the US Bonds input field for 1099-Div. The amount massively exceeded the amount in ordinary dividends and proconnect only included the smaller amount on Schedule B. This left a clients income underreported by over 300k, massive tax bill, and significant penalties and interest.
I understand that this is technically an input error made by the preparer but please add a critical diagnostic about this going forward.
