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Is Turbotax calculating MN state percentage incorrectly?
Hi,
I live and work in MN.
Currently working on my state taxes.
Filing - Single
Income bracket - More than 0; Less than/equal to 26520
I am using the official source for tax year 2019 correctly, I believe for brackets. Minnesota's official revenue website.
Using that, I take I am listed as 5.35% or 0.0535 right?
TurboTax has calculated my Taxable Income, and when I multiply that by 0.0535, it does not match what it lists as my Minnesota Income Tax under Taxes, Payments, and Credits section in my "Minnesota Bottom Line" screen (shows Taxable Income, then Taxes Payments and Credits, Overpayment, and then Net Refund)
It calculated my Minnesota Income tax as 2 dollars less than it should be - effectively making my refund $2 more.
When I divide my Minnesota Income Tax by Minnesota Taxable Income it is off by a few percentage points.
Can anyone help me explain why it is off? is TurboTax correct? Or am I wrong? I dont believe the brackets have changed in any way.
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State tax filing
I think your mis-conception of proper procedure for that, is that you are using an exact % amount.
Yes, there is one place in the instructions that shows an exact calculation..BUT...there is another place in the MN instructions (Just above "Single" on page 35) that says "If line 9 of Form M1 is less than $90,000, you must use the tax table on pages 29 through 34".
At that taxable income level, there are MN tax tables that are used, instead of an exact %. (Supposedly, this saves time & mistakes for people who may be mathematically challenged).
So...look at line 9 of your MN form M1.
Then look at the tax in the tax tables starting on page 29 of the MN instruction booklet to see what tax the tables assess:
https://www.revenue.state.mn.us/sites/default/files/2020-03/m1_inst_19_0.pdf
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State tax filing
PERFECT thank you very much I was very baffled yesterday.
much appreciated