All Posts

Line 3 of the SS Benefits Worksheet is including excludable interest on US I Bonds (form 8815).  The interest excluded is not shown on 1040 Line 2a, but is added in via an internal calculation error,  The excludable interest that is claimed on 8815 is not to be included included in 2a because it is removed from income.   I have completed form 8815 and it shows the excludable interest on the savings bonds,  Line 2a on the 1040 form correctly does not show that interest.  However, the social security worksheet is including it which results in a total on line 3 of the worksheet that does not match the total if you add all the corresponing lines on form 1040. (1z, 2a,2b,3b,4b,5b,7 and 😎

When will form 8606 for tax year 2025 be updated and available?  I was told before 1/23, but I see no software updates today.  If this doesn't get taken care of very soon it will hold me up from filing my taxes on Monday 1/26.

TurboTax is currently asking for Military Retirement Income for the Uniformed Service Retirement exclusion and limiting the total exclusion to lower of qualified income or $20,000.  There are two key issues with this:   1) The Uniformed Service Retirement exclusion, under CA Tax Code Section 17132.9 includes uniformed services that are not military, such as commissioned corps of the United State Public Health Service and the National Oceanic and Atmospheric Administration Commissioned Office Corps.  The  exclusion is for Uniformed Services and not limited to Military.   2) The exclusions under 17132.9 (Uniformed Services) and 17132.10 (Department of Defense Survivor Benefit Plan) are separate exclusion available to the taxpayer.  They are limited by exclusion and taxpayer, not return -- see CA Sch CA (540) Instructions and the code sections.  Thus, a Taxpayer can have both a Uniformed Services retirement exclusion (limited to $20k) and DOD Survivor Benefit Plan exclusion (limited to $20k).  In that case the taxpayer would need two separate entries for each exclusion.  For a married couple, it could be as high as four exclusions, with each being retired Uniformed Service members and getting annuities from someone else's service under a DOD Survivor Benefit Plan.  Currently, Tubo Tax is combining all of these and limiting them to $20k (at least for single return, not sure if joint return is allowing more).