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By Edward Parsons, CPA · licensed since 2009
Key takeaways
- Most consumer tax software doesn’t include Form 8621. TurboTax and TaxSlayer say so outright, and FreeTaxUSA, Jackson Hewitt Online, IRS Free File Fillable Forms and H&R Block’s personal products leave it off the lists of forms they publish.
- A few programs do include the form: TaxAct in its paid editions, OLT, H&R Block’s expat product, and 1040.com for Parts I to IV only.
- None of these programs’ own pages describes computing Part V, the section 1291 calculation, from your purchase and sale history. TaxAct calls its version a fillable form, and 1040.com says its Part V has to be completed manually.
- Even TaxSlayer’s software for tax professionals describes entering the Part V tax as a typed figure. The calculation happens outside the return software.
- So the useful question isn’t “is Form 8621 in the program?” It’s “who computes the numbers?” A tool built for the calculation, such as the PFIC Calculator & Form 8621 Generator, answers that, whichever program prepares the rest of the return.
People ask me which tax software to use for Form 8621, as if the right program would make the form easy. It won’t, and the reason is the same for every program on this list. This page sets out what each maker says on its own pages, what those statements mean in practice, and what to do about the part none of them does.
Which tax software supports Form 8621?
Here is what each program’s own pages say, checked against the maker’s help pages and forms lists for the current filing season.
| Program | Form 8621, per its maker’s own pages | Part V figures |
|---|---|---|
| TurboTax | Listed among the IRS forms TurboTax doesn’t include | Not applicable |
| TaxSlayer | Listed as “Not supported” for its individual software | Not applicable |
| FreeTaxUSA | Not on its published list of supported forms | Not applicable |
| Jackson Hewitt Online | Not on the list it calls the full list of forms it supports | Not applicable |
| Cash App Taxes | Never mentioned; foreign accounts and the foreign tax credit form are unsupported | Not applicable |
| H&R Block Online and desktop (personal) | Not on its published federal forms lists | Not applicable |
| IRS Free File Fillable Forms | Not on the IRS’s list of available forms; the program can’t take attachments | Not applicable |
| TaxAct | A fillable form in Deluxe, Premier and Self-Employed, up to 50 per return; not in Free or desktop Basic | Typed in by you |
| 1040.com | Parts I to IV can be completed; Part V is not currently supported | Completed manually |
| OLT | Listed as a supported form | Pages don’t say |
| H&R Block Expat (do-it-yourself) | An additional form with its own fee; H&R Block advises against doing it yourself | Pages don’t say |
| Expatfile | Not on the most recent version of its supported-forms list I could read, which says unlisted forms can’t be supported | Not applicable |
| MyExpatTaxes | Listed, but prepared by its tax team, from your full transaction history | Prepared by staff |
Two more facts complete the picture. The IRS says the Free File partner companies aren’t required to support every federal form, and Form 8621 isn’t on the list every partner offers. And TaxSlayer Pro, sold to tax preparers, has help pages that describe entering the tax calculated on Form 8621 Part V as a figure.
Each of these programs has its own details. My guides to TurboTax, TaxAct, H&R Block, FreeTaxUSA, TaxSlayer, Cash App Taxes and expat tax software cover each one and the trap that goes with it.
What does “supports Form 8621” actually mean?
It can mean four different things, and the difference is the whole problem.
| Level | What the software does | What is still left to you |
|---|---|---|
| 0 | Doesn’t include the form | Everything, and a way to get the form onto your return |
| 1 | Prints a blank form, or lets you attach one | Every figure, every statement, the form itself |
| 2 | Gives you the form’s boxes to type into | Working out every Part V figure, then typing it in |
| 3 | Computes Part V from your transaction history | Checking the inputs: every purchase, sale and distribution |
Every program in the table sits at level 0, 1 or 2, going by its own pages. None of them describes level 3.
Why does tax software stop at the form?
Because the form is filled in from a calculation no tax document contains.
Return software is built around documents that arrive with the answer on them: a W-2, a 1099. Part V of Form 8621, for a fund taxed under the default rules of section 1291, needs your whole history with the fund, block by block:
- a 125% test for each block of shares against the three prior years;
- an allocation of the excess across every day you held the shares;
- the top rate for each prior year;
- interest compounded daily at a rate that changes every quarter, under section 6621.
The Form 8621 instructions have the allocation worked on a separate sheet attached to the form, and call for a separate Part V for each block of shares with its own holding period. A program that only ever saw this year’s 1099 has nothing to compute that from.
My guide to the PFIC excess distribution regime explains what the calculation is doing.
How do I check a program I’m already using?
Ask its help pages three questions, for the edition and year you are filing:
- Is Form 8621 on the supported forms list? If it is listed as not included, you have your answer.
- If it is there, is it a fillable form? Fillable means the figures are yours.
- Does anything describe computing Part V from your purchases, sales and distributions? If the help pages are silent, assume it doesn’t.
Then one more, which no help page answers for you: can the return still be filed electronically with the form attached, or does it have to go on paper? The IRS instructions say Form 8621 is attached to your return.
What should I do?
- Settle whether you have a PFIC at all. Most foreign funds are, but test yours with the free PFIC Analyzer, and see whether your foreign mutual fund is a PFIC for why.
- Settle which years are due. The rules on who must file Form 8621 and the $25,000 and $50,000 exception decide that, before any software question.
- Compute Part V outside the return software, because that is where every program on this list expects it to be done. The PFIC Calculator & Form 8621 Generator runs the PFIC tests, the 125% test for each block, the allocation, the rates and the interest, and fills in the official Form 8621 for each fund and year, with workpapers showing every figure and where it goes on your return.
- Then choose the program for the rest of the return knowing which level it sits at, and how the form will travel with it.
Glossary
- Supported form: a form a tax program can prepare. Makers publish lists, and most don’t say the lists are complete.
- Fillable form: a form in tax software where you type the figures yourself.
- Part V: the part of Form 8621 for distributions from, and sales of, a fund taxed under section 1291. Lines 15 and 16.
- Section 1291 (the default method): the rules that apply when no QEF or mark-to-market election is in effect.
- PFIC: a passive foreign investment company, including most foreign mutual funds and ETFs. See what a PFIC is.
Frequently asked questions
Which tax software supports Form 8621?
Few consumer programs do. Going by their makers’ own pages, TaxAct includes it as a fillable form in its paid editions, OLT lists it, H&R Block’s expat product offers it as an add-on, and 1040.com handles Parts I to IV but not Part V. TurboTax and TaxSlayer say they don’t support it, and FreeTaxUSA, Jackson Hewitt Online, IRS Free File Fillable Forms and H&R Block’s personal products don’t list it.
Does any tax software calculate Form 8621 Part V for you?
None of the consumer programs’ own pages describes computing Part V from your purchase and sale history. TaxAct calls its form fillable, 1040.com says Part V must be completed manually, and even TaxSlayer’s professional software describes entering the Part V tax as a figure.
Can I e-file a return with Form 8621?
That depends on the program. The IRS instructions say Form 8621 is attached to your return, so a program that doesn’t include the form may not be able to send it electronically, and IRS Free File Fillable Forms doesn’t allow attachments at all. Check before you file.
Does IRS Free File support Form 8621?
Form 8621 isn’t on the IRS’s list of forms available in Free File Fillable Forms. For the guided Free File partners, the IRS says the companies aren’t required to support every federal form.
What is the best tax software for PFICs?
The program matters less than where the Part V figures come from. Use a tool built for the section 1291 calculation, such as the PFIC Calculator & Form 8621 Generator, then choose the return software knowing whether it can carry Form 8621 or leaves it to you.
Is my fund even a PFIC?
Start with the free PFIC Analyzer, which tests a fund against the income and asset tests. Most foreign mutual funds and ETFs are PFICs, but not every one.
The program doesn’t do the math. Something has to. Test the fund with the free PFIC Analyzer, then let the PFIC Calculator compute Part V and fill in your Forms 8621.
TurboTax, TaxAct, H&R Block, FreeTaxUSA, TaxSlayer, TaxSlayer Pro, Cash App Taxes, Jackson Hewitt, 1040.com, OLT, Expatfile and MyExpatTaxes are trademarks of their respective owners. This guide is not affiliated with or endorsed by any of them. Each program is described from its maker’s own pages as of this writing, and those pages change every filing season.