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Background

  1. I calculated my federal taxes by hand. I kept the cents in all of my calculations (I did not round to the nearest dollar at any point). Then I used these values to calculate my New York taxes.
  2. I submitted my federal taxes using Free File Fillable Forms and my New York taxes using the Department of Taxation and Finance website.
  3. My federal return was rejected because I forgot to include my Form 1040 Schedule D. I put my Form 8949 and Schedule D information into FFFF and resubmitted my federal taxes.

FFFF rounds all of its amounts to the nearest dollar, and somewhere in the chain of calculation my capital gains ended up $1 higher than [the rounded version of] what I had calculated. Hence, the capital gains and adjusted gross income (AGI) shown on my state return are $1 higher than the corresponding values on my federal return.

Question

Do I need to amend my state tax return to reflect $1 differences in my capital gains and federal AGI that were caused by using different rounding methods? (I have verified that my state tax amount is the same with or without this dollar.)

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No, you don't. Rounding errors happen, and if there's no change in the actual tax there's no reason to amend. If all the income was properly reported and the tax was properly calculated - no-one cares if it was rounded up or down on one of the lines.

Note for the next time though: Not sure about New York, but Federal taxes are generally rounded to the nearest dollar on each line of the form. So don't calculate cents, just round to the nearest dollar, and be consistent on all of your tax forms. Technically, it is perfectly legal to report cents as well (and people used to when the forms were still filled by hand with pen), but all the automatic tax filing software rounds, so just do that.

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  • "So don't calculate cents, just round to the nearest dollar, and be consistent on all of your tax forms." It's not that simple, because there are different ways that stocks can be listed on Form 8949 and Schedule D. If you don't have any adjustments, the gross amount can be listed on Schedule D without Form 8949, where the gross amount is added together with cents. On Form 8949, if you list each stock separately and rounded, it will produce a different number. On Form 8949 you can also attach a broker statement (but you can't really do this on FFFF) and just list the gross amount on one line.
    – user102008
    Mar 30, 2015 at 22:20
  • @user102008 yes. So? Chose whatever method is beneficial to you. Either way is right, as long as you apply it consistently (i.e.: list only some of the stocks and group the rest - that wouldn't fly. Group all or group none).
    – littleadv
    Mar 31, 2015 at 5:30

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