DanielV01
Expert Alumni

State tax filing

Kentucky's law did change somewhat, in two ways.  In prior years KY had a graduated tax-bracket system similar to the Federal tax bracket system.  Last year, with the legislation designed to conform to the Tax Cuts and Jobs Act, a flat tax rate of 5% was adopted.  This flat tax rate means that for the standard deduction of $2590 per qualifying individual, the approximate tax savings will be $126 (5% of $2590), provided that both spouses are using the standard deduction and both have income.  If only one spouse has income or the couple is itemizing their deductions, there will not be a difference in tax savings in the two statuses.  

 

On top of this, Kentucky also has limited itemized deductions to (in essence) qualified home mortgage interest and charitable deductions.  Real estate, personal property, and local taxes are no longer deductible, and neither are gambling losses, medical expenses, nor unreimbursed employee expenses that were subject to 2% of AGI.    

 

In 2018, the job withholding tables were not initially adjusted to reflect the change in the structure, so there were a few refunds available last year as some were overwithheld.  However, for 2019 the tax withholdings table was adjusted.  Many are withheld very close to what the actual amount of taxable income is.  And if there are other sources of taxable income, such as self-employment, for example, which have not been taxed, will definitely contribute to additional amounts owed.  

 

Having said this, double-check your income entries to make sure that income is marked appropriately to taxpayer and spouse.  If all is marked for one taxpayer, you will not see a difference in tax amounts.  

 

There's no issues with TurboTax Premier calculating the tax with the MFS-combined return status, but there has been some changes in the law that reduces the effectiveness of the status.  It is also possible that entries do not identify income for both spouses correctly, which would negate the effectiveness of MFS/combined.

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