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Level 2
March 12, 2023
Question

estimated tax penalty calculation - Ca taxpayers

  • March 12, 2023
  • 3 replies
  • 14 views

Has anyone found a work around for lacerte calculating an estimated tax penalty for Ca taxpayers not making a 4th quarter estimated tax payment? This is a huge issue that needs to be addressed either from a software fix or a workaround? 

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3 replies

sjrcpa
Level 15
March 12, 2023

Override it 

The more I know the more I don’t know.
KARENHAMAuthor
Level 2
March 12, 2023

Overriding the penalty is not allowed for e-filing and would cause alot of work on the preparers. The taxpayer may have an underpayment penalty for not making enough payments through the 1st 3 quarters but should not be punished for not making the 4th. Perhaps at least allow us to override the 4th qtr interest rates? That should be an easy programming fix although would not fix in all situations. I have many clients that deferred significant payments in the 4th quarter. This will draw a slew of notices. Please fix Lacerte!!! I don't understand why you are not making programming changes for a law change that affects so many taxpayers!!!

sjrcpa
Level 15
March 12, 2023

We don't know why either but Intuit said they will not make any changes for the postponed filing date.

Can ask for a waiver for the Q4 amount to get the return to come out right?

EDIT: Or suppress all of the penalty & tell client they may get a bill for Q1-3 of about $XXX which they should pay.

The more I know the more I don’t know.
KARENHAMAuthor
Level 2
March 13, 2023

How about Lacerte makes the appropriate software changes so we can file the returns and not receive a flood of notices??

BobKamman
Level 15
March 14, 2023

Fortunately I don't have any California clients who make state quarterly payments.  At least, not for last year.  But I tried to find information online about this law change, just out of curiosity, and came up with nothing.  When was it changed, and what's the new rule?  And is this for the entire state, or just the parts that are underwater or snowed in?

abctax55
Level 15
March 14, 2023

@BobKamman 

All but 7 of CA counties are part of a Federally Declared Disaster Area (and those 7 may get added the way the weather is acting...).  Filing and paying has been extended to October 16.  The FTB has conformed.

HumanKind... Be Both
BobKamman
Level 15
March 14, 2023

So what you are saying is that you want the software to calculate the penalty just for the first three quarters, except in seven counties?  The underpayment is normally figured until the April 15 due date. Now what date do you use, April 15 or October 15?  

Many contracts have an "act of God" or "force majeure" clause, excusing nonperformance due to unforeseen circumstances.  I'll defend Intuit on that one.  And if clients expect preparers to spin their wheels doing calculations so that they don't get a bill, let them go elsewhere.  No one forced them to live in California, and if they aren't actually making money from bad weather, their income is probably not affected.  Certain people take a certain glee in delaying tax payments as long as they can.  Remember the long line of cars at the Post Office, the evening of April 15 back in the old days?  Let them focus on something more important, like the potential collapse of democracy.  They should have paid on January 15 anyway, because they never know when their bank is going to collapse.