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Why is Turbo Tax incorrectly calculating my State income taxes? RESOLVED
I live in NC, and work in SC. My wife lives in NC with me, and also works in NC. We are married filing jointly. I imported both of our W-2s directly.
In my situation, taxes are typically collected in SC, the State I work in, and offset by credits to NC, so that my income is not taxed twice. Apparently this is not calculated correctly in the newest version of the Turbotax application. SC has already collected about $8K in State taxes through my payroll, which should be more than my tax obligation. However, Turbotax is indicating that I owe taxes to both NC and SC, a smaller amount to NC, and about $5K to SC. This is obviously wrong, as it would make my tax rate in SC about 15%, which is more than the maximum. What is going on?
Edit: I figured out what the issue was. TurboTax incorrectly credited the taxes collected on my W-2, to the wrong State when importing. Comparing what was imported, to a copy of my W-2 showed the error. This is a huge gotcha, and should be fixed.
You can manually fix this by:
Clicking on the 'Wages & Income' tab at the top of the page, then the 'I'll choose what to work on' button. This will bring you to a different screen.
Then under the 'Wages and Salaries Form W-2' heading click the Update button on the right hand side. This will show you which W-2s were imported.
Click edit on the right hand side for whichever W-2, and you can update the fields manually.