I am working on the tax returns for a couple and their two children. The daughter has a tuition slip and the full amount is available for transfer. At present, TaxCycle has linked the transfer to the mother. If I go into the dependant form for this child, there is a pull down where one can select who claims the transfer but as soon as I switch it to the father it indicates an override. This is the field {{CurrentClient.Dependant[1].TuitionClaim.ClaimedBy}}.
I like to avoid overrides as much as possible because the info is likely coming from somewhere else and feeding into the field. Any idea on where this is coming from or how TaxCycle determines which parent should be claiming the amount?
In this case, it makes no difference to the tax payable whether it is the father or the mother who is claiming the transferred tuition, but if the father claims it, it will reduce the tax owing for him and reduce the refund that the mother is receiving when compared to the mother claiming it. Given that the returns are late, reducing the father’s payable will reduce his penalty and interest. The mother has a refund either way.
Cannot speak to why it specifically on this file it is picking one spouse over the other without looking at the file. One reason could be if the optimizations are set to maximize Refund.
In any case, I find that there are times I have to use override to pick which spouse I want for Tuition, education, medical, DTC transfer, etc…
Remember that Override’s are not the enemy. Your experience as a tax professional, knowing and understanding your clients needs trumps the Taxcycle standardized programming to aid the masses.
While I agree that overrides aren’t the enemy, they’re usually a good indicator that you’re doing something you either shouldn’t be doing or you’re doing it in the wrong area.
For the tuition transfer from one parent to the other, you should go to the Dependant schedule (F4 > DEP) and toggle the transfer from there. Just about half way down on the form there’s a pull-down menu to choose which parent will claim the tuition…
Ok, I might have to look at whether turning off the optimization or just going with the override is the better option.
You are correct that overrides are not the enemy, but too many overrides can needlessly complicate matters. Another place where overrides seem necessary is in which spouse claims the donations. I’ve seen some situations where the optimization in the program applies the donations to the spouse with the lesser benefit in claiming them and an override can decrease the taxes payable.
Yes, that is the field I’m talking about. Changing it results in an override and as previously pointed out, I think that is because I’ve got the optimization set to maximize the refund. Maybe that setting is only to maximize the refund and does not include minimize the tax owing. The father’s refund is zero because he owes whether he claims the tuition or not, yet the mother’s refund increases if she claims.
My apologies, clearly I didn’t read your initial post as well as I should have. I see now that you point to the exact same pull-down I referenced.
I also didn’t realize you had optimization turned on. That would explain the need for the override. I’ve never been able to find a way to have the other parent claim the tuition without an override when optimization is on.
I believe if there’s no difference in the combined balance, TaxCycle will optimize to have the parent with the highest taxable income claim the tuition.
Our firm’s policy is to have optimization turned off. Having it turned on typically leads to overrides when you’re truly trying to optimize things like this. On the other hand, turning optimize on seems to be the only way to claim non or net capital losses carried forward (well, maybe not the only way, but the quickest/easiest).
Don’t worry about missing that. I probably should have done a screen capture like you did instead of using the field code. It would have been clearer.
And it is optimizing to the parent with the higher income in this case. I’m thinking that you are correct in how the optimization of this item works. In this case, I’m going to leave the optimization on until I reach the end of my review, then turn it off before switching the parent claiming the tuition.
I have found that optimization has its benefits and so we are configured with it turned on automatically. A good example of the benefits is RRSP contributions that exceed the amount necessary to bring tax payable to zero. It is pointless to deduct all of the contributions. Optimizations will claim only what is necessary and leave the remainder to carry-forward. Donations, and capital gains deduction are two other items that work similar. It saves time going around to all the items like this and making such adjustments.
