State tax filing

I work at a CPA firm as an IT engineer, so I just had a CPA review all of what I wrote along with my tax forms, and they said I am CORRECT.... dun dun dunnn...

They said that based on your description, your client or you did not properly adjust his or her Federal Unemployment Income at all on his 1040 or they did not enter it properly somehow (for exampke they wrote that their Unemployment was 10200 PLUS the unemployment they actuall received), possibly modifying the unemployment amount in federal forms when it should have been left alone to be canceled out...OR that it did not get entered into the CA tax return properly and oerhaps your client added the 10200 into their CA State unemployment income section (which I agree with you, it should have been zero'd out...but theres so many places to enter this info that we dont know what your client did).

My "book" that I wrote was based off of my specific scenario, and other forum users scenarios, where we simply did not unserstand why TurboTax Online was showing our California Unemployment Income being marked as non-taxable, and then suddenly being RE-added as an addition by the same amount of unemployment that we received. So my "book" DOES describe the exact workflow that TurboTax is taking, along with helping the users figure out how its working and assists users with how to confirm what Im writing on their own by reviewing their own tax forms in "preview mode" on TurboTax.

Your issue, or your clients issue(s), are not related to the same exact topic of this thread, because everything you wrote is different than what the rest of us were trying to figure out. You should start a new thread, and I already searched these forums and was unable to find anyone mentioning that they were being charged exactly 10200 extra on the CA state AGI.

Telling everyone that Im wrong is just going to add to major confusion for other people who are not having the same issue that you are describing.

The title of this thread is "State: Incomes that California handles differently-other adjustments to Income- UCE is listed and it matches the amount Under Unemployment. Should it be on their twice?" (It mentioned nothing about an incorrect AGI of 10200 being generated by TurboTax....) I just had a CPA validate everything I wrote in this thread, even though I really didnt want to make them waste their time on this, but Im doing it for the benefit of others (You're welcome)

I THINK it sounds like you are trying to say that your client earned $0 all year in California, and that he or she made over 10,200 in CA Unemployment, and when they look at their AGI in the California State Return its showing as $10,200 and isnt being canceled out somehow...Then you are saying that for whatever reason your client is seeing a $10,200 AGI as an exact number in their CA State Return, but I dont know how they would have a perfect 10,200 AGI like unless they had zero alternate income listed and only made exactly 10200 in CA Unemployment income. However IF you are saying the client earned something like 20,000 via normal income, and turbotax was trying to charge a total of 30200 as their total AGI, where the 10,200 was somehow magically showing up and you are 110% sure that it was not being canceled out like its supposed to cancel out in the CA return, then yeah I suppose there is a LOT more to investigate... it could possibly be a turbotax software issue of some kind, but it also sounds like you werent the one who entered everything into your clients turbotax software, so you cant be 100% sure that your client messed up something on their federal or state return related to the 10,200 unemployment, and you were just looking at the end results which didnt look right to you. In my world of IT where we have to test every single thing before we can draw a conclusion as to the root cause of an issue (inckuding in software applications), there wasnt enough testing done on your end to be sure if it was an issue caused by your clients or actually caused by turbotax. Did you look at the turbotax preview forms to follow all the numbers to see where that 10200 suddenly came into play?

To reiterate though, all of that doesnt really have to do with the topic of this thread, which was to simply discover why TurboTax Online made it look like the software was essentially re-adding our exact amount of CA Unemployment as taxable income after it had already subtracted it as non-taxable income, but in my "book" that I wrote, I noted how that specific scenario is all working fine currently.

To your 40 years of tax filing, Im not saying that you dont know what you are doing, by any means. Clearly you identified an issue where your client was being taxed for 10,200 worth of AGI which is no good, but after all the complexity of the turbotax software that I discovered around how theyre canceling out the American Rescue Plan Act tax money on federal and how theyre canceling out all California Unemployment income, its hard to know if your client made a mistake entering their unemployment income far earlier into their tax-work. One piece that I agree with you on is that TurboTax should ensure that any states that have no income tax on unemployment, like California, should automatically throw a flag to the user if and when it looks like ANY unemployment income is somehow being marked as taxable...but it also depends on what fields the end-user is typing their taxes into and any end-user mistakes can still create problems if they enter into the wrong fields or the wrong amounts. Either way, TurboTax shoukd wnsure that no unemployment is added to the AGI and that no taxes are charged against the Total Income/AGI for these states that dont charge taxes against unemployment income. In the scenarios that I described in this thread though, TurboTax is working properly.

All I can say is that I work for a firm that would be considered a very large competitor of TurboTax, and I simply choose to use TurboTax because I enjoy doing my own taxes and saving money, and I especially enjoynusing TurboTax because they make importing all my brokerage accounts wwwaaayyy easier than the competitors well-known software of where I work at (I work at a parent comoany of the software vendor). I just had a CPA of 20 years validate the main issue identified in this thread along with my "book" write-up, and he said that what I identified is correct. I just asked another accountant to look at my preview tax forms generated by turbotax and the accountant says thay they do not see any issues with my $2700 in Unemployment Income that I received as getting taxed on my federal or CA state tax return. I could get into trouble wasting these people's time, but I certainly wasnt going to pay anyone to valdiate something, especially if TurboTax was already doing things properly...and I also have to receive basic mandatory tax training each year at my job, just in case any client comes in and asks for info or who the right person to speak to is, even the receptionist for example, and we all at least have to know the basics of taxation in order to properly route customers and assist them in any way we can until they get to the correct accountant or CPA or attorney. Id like to say I have a good enough understanding of how TurboTax is moving the numbers around on our 1040 and Schedule/Form CA and CA540, in order for me to confirm that in my own scenario, and likely most folks' scenarios, that TurboTax is handling it properly and we are not having our CA state unemployment taxes removed, and then re-added again where its essentially charging us for that unemployment income, albeit it is confusing at first glance with the poor UI of the TurboTax Online application.

For anyone who still doesnt believe me, just contact TurboTax support and tell them that you would like for them to show you this break-down within your TurboTax Online application or local PC app and they can do a screen share with you, or whats even better is you can ask TurboTax Support to wapk you through the breakdown of your CA Unemployment Income, and confirm exactly where its being canceled out on your own Previewed TurboTax Returns (remember that TurboTax Online charges you up-front for the Federal and State returns so that you can preview your tax forms, but its worth being able to look at your tax forms to look at all the numbers before actually filing, if you are concerned about the issues described in this thread)...OR there is always the more painful option of using another tax filing application and re-entering all your taxes and seeing if the numbers jive on both TurboTax and also the competitors tax filing software that you use. As long as you enter everything properly and exactly within both tax applications and you get the same amounts owed or due, then you can rest assured that its good to go on TurboTax. Moral of the story is do not listen to me or any other random strangers on an internet forum, if you are concerned about your taxes...always contact TurboTax or a real tax professional to confirm, correct, or validate any issues that you might be having with your tax returns.

Your welcome?