Turbotax won't let me sign and file

The email subject line from a Maine resident simply said: “2 attempts to file 1040 online rejected.”

“In mid-February, I completed my 1040 on TurboTax only to have it rejected,” the reader wrote. “Next I did the complete return on [IRS] Free Fillable Forms only to have that rejected. So I ended up filing manually.”

Here’s another email I received from Charles H. of Issaquah, Wash.: “My wife and I are in the quagmire of having filed a paper tax return in 2020 which is still not processed. When we tried to file our 2021 return electronically and entered our 2020 AGI (an IRS security feature I guess) our 2021 return was rejected.”

It’s never been more important to file your tax return electronically. You don’t want to mail a paper return if you don’t have to. But a glitch tied to the massive return processing backlog at the IRS is making it harder for some taxpayers to file online.

Let me walk you through the e-file Kafkaesque situation.

As of March 25, the IRS said it had 7.2 million unprocessed individual returns.

When you file electronically, one of the verification questions asks for your adjusted gross income, or AGI, from your most recent tax return.

If your return is in that backlog unprocessed, the IRS system doesn’t recognize your legit AGI. This can cause your e-file to be rejected.

A lot of people have no idea that’s why they can’t file electronically. Or they type in their AGI for 2020 assuming their return has been accepted by the IRS, but their e-filing is rejected.

And why would they assume their return has been processed?

The IRS cashed a check they sent with their 2020 return for taxes owed.

Some folks may have realized their returns haven’t been processed because they received what’s called a “CP80 Notice,” which is sent to a taxpayer when the IRS has credited a payment but has no record of the tax return being filed.

But others in the same situation may not realize their returns were sitting in a pile unprocessed because the IRS has paused sending out CP80 notices to them. (The agency realized the folly in asking people to send more paperwork.)

“The reject rate is similar to previous tax years for electronically filed returns that have AGI mismatches,” the IRS said in a statement.

The agency said it was unable to provide the specific breakdown of rejects related to an AGI mismatch.

You can print and mail your 2021 return, but if you’re expecting a refund that’s not the choice you want to make. If you file electronically, elect to have your refund sent by direct deposit to your bank account — and nothing goes wrong — the IRS says you are likely to get your money in three weeks or less.

The IRS has mentioned what to do if you find yourself in this situation but the workaround has still been missed by some taxpayers.

The Issaquah, Wash., couple was finally able to e-file their 2021 return after searching for a solution and reading about the fix in a column I wrote earlier this year.

Here’s the fix: Enter $0 (zero dollars) for your prior-year AGI, the IRS says.

If you used the non-filers tool last year to register for an advance child tax credit payment or to claim the third stimulus payment, enter $1 as your prior-year AGI.

By the way, if you filed an amended return last year, try using the AGI from your original return. Why? There’s a huge backlog for amended returns too. As of March 26, the IRS said it had 2.2 million unprocessed individual Forms 1040-X, which taxpayers used to add, change or correct information for an already-filed return.

Despite this glitch, as of March 25, the IRS had received more than 81 million individual income tax returns, slightly more than half of all the returns that it projects it will receive during 2022. The agency has issued 57.8 million refunds worth almost $189 billion. The average refund is $3,263.

If you’re having a problem and can’t get through to the IRS on the phone, the agency announced that many Taxpayer Assistance Centers (TACs) will be open around the country this Saturday, April 9 for face-to-face help, and no appointment is needed. Normally, TACs are only open by appointment on weekdays. Employees won’t be set up to do returns, but they can get help with, among other things, the advance child tax credit or third-round stimulus payment.

“We designed these extra weekend hours to make it easier for taxpayers to resolve an issue, inquire about their account or work with the IRS if they have an obligation they cannot meet,” IRS Wage & Investment Division Commissioner and Taxpayer Experience Officer Ken Corbin said in a statement.

Although many offices will be open, it’s not all of them. To find TAC near you open on April 9 for unscheduled walk-up help go to irs.gov and search for “IRS Face-to-Face Saturday Help.”

If you’re having a problem this tax season, I want to hear your story. Email me at .

TurboTax is generally pricier than everything else out there, but even though confident filers may not need all the bells and whistles that most TurboTax online products offer, many people will find the experience and the availability of human help worth the extra cost. We’ve long praised TurboTax for its design and flow.

	For simple tax returns only; it allows you to file a 1040 and a state return for free, but you can’t itemize or file schedules 1, 2 or 3 of the 1040.
	Live Basic $0 (state included). Free version plus access to a tax pro, advice and a final review until March 31. Deluxe $59 + $49 per state (Live: $119, $54). Itemize and claim several tax deductions and credits. Works well for business income but no expenses. Premier $89 + $49 per state (Live: $169, $54). Deluxe version plus investment reporting and rental income (Schedules D and E, and K-1s). Self-Employed $119 + $49 per state (Live: $199, $54). Premier version plus business income, expenses on a Schedule C, home office deductions and features for freelancers.
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One note about prices: Providers frequently change them. You can verify the latest price by clicking through to TurboTax’s site. TurboTax also offers desktop software, where your return doesn't reside in the cloud, but it’s not part of our review.

TurboTax has a lot going for it, but price isn’t one of them. The list price of its software routinely is on the high end of the spectrum, especially when adding the cost of a state return. And if you want access to human help, it costs even more.

TurboTax offers a free version for simple tax returns only; it lets you file a Form 1040, claim the earned income tax credit, reconcile your advanced child tax credits and deduct student loan interest. Unlike last year, the free version no longer handles unemployment income reported on a 1099-G.

The free package also can’t handle itemized deductions or schedules 1, 2 or 3 of Form 1040, which means it probably won’t work for you if you plan to do things such as deduct mortgage interest, report business or freelance income, or report stock sales or income from a rental property.

TurboTax’s interface is like a chat with a tax preparer, and you can skip around if you need to. A banner running along the side keeps track of where you stand in the process and flags areas you still need to complete.

Embedded links throughout the process offer tips, explainers and other resources. And help buttons can connect you to the searchable knowledge base, on-screen help and more.

You can switch from another provider: TurboTax imports electronic PDFs (not scans of hard copies) of tax returns from H&R Block, Credit Karma, Liberty Tax, TaxAct and TaxSlayer.

Auto-import certain tax documents: You can automatically import W-2 information from your employer if it's partnered with TurboTax, but you can also take a picture of your W-2 and upload it to transfer the data to your return. You can import certain 1099s, and the Self-Employed version also lets you upload 1099-NECs from clients via photo, as well as import income and expenses from Square, Uber and Lyft.

Crypto support: TurboTax’s Premier package eliminates one of the biggest pain points for cryptocurrency investors — manual entry. Users can import up to 4,000 transactions at once.

Donation calculator: The Deluxe, Premier and Self-Employed packages integrate ItsDeductible, a feature — and standalone mobile app — that’s helpful for quickly finding the deduction value of donated clothes, household items and other objects.

Platform mobility: Like many other providers, TurboTax lets you access and work on your return across devices: on your computer via the website or on your phone or tablet.

Here’s a look at the various ways you can find answers and get guidance when filing your return with TurboTax.

• General guidance: Searchable knowledge base, forums and video tutorials are helpful for research on the fly.

• Tech support:  TurboTax Digital Assistant (a chatbot) and contact form available for all; paid packages get access to a TurboTax specialist.

• One-on-one human tax help: Live, on-screen tax advice or review of your whole tax return by a tax pro is available if you buy the TurboTax Live version.

One of TurboTax’s most outstanding support options is TurboTax Live. It offers a one-on-one review with a tax pro before you file, as well as unlimited live tax advice throughout the year. You can talk on the fly to a tax pro via one-way video (you see them, but they don’t see you; they just see your screen).

TurboTax also offers Live Full Service, which does away with tax software altogether. Instead, you upload your tax documents and a human puts together your tax return. You’ll be matched with a tax preparer, meet on a video call before he or she begins working, and then you’ll meet again when your return is ready for review. The preparer files the return for you. Prices range from $199 to $389 for federal returns depending on complexity, plus $54 per state return.

Getting audited is scary, so it’s important to know what kind of support you’re getting from your tax software. First, be sure you know the difference between "support" and "defense." With most providers, audit support (or "assistance") typically means guidance about what to expect and how to prepare — that’s it. Audit defense, on the other hand, gets you full representation before the IRS from a tax professional.

TurboTax gives everyone free audit support from a tax pro to help you understand what’s going on if you get that dreaded letter about your 2021, 2020 or 2019 tax return; if TurboTax can’t connect you with a pro, you’ll get a refund. If you want someone to represent you in front of the IRS, you’ll need TurboTax’s audit defense product, called MAX. It runs an extra $49 and includes features such as identity theft monitoring, loss insurance and restoration help.

No matter how you file, you can choose to receive your refund several ways:

• Direct deposit to a bank account.

• Loaded onto a Turbo Visa Debit Card (if you’re getting a refund on your state taxes, see if your state offers a prepaid card option as well).

• Direct deposit to Coinbase account.

• Apply the refund to next year’s taxes.

• Directing the IRS to buy U.S. Savings Bonds with your refund.

You also have the option of paying for the software out of your refund. But there’s usually a charge to do so — the amount may depend on the type of service or add-ons you requested.

With its intuitive design and variety of human support options, TurboTax is in many ways the standard for the do-it-yourself tax-prep industry. Its products come at a price, however, and confident filers might find that similar offerings from competitors may provide a better value.

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