Social security taxable income mistake

[Lars6]

I think Turbo make a significant mistake on calculating taxable SS income for 2024. My combined SS income was $67,968. Based on my entire income (well above $44,000), 85% of that should have been considered taxable income. But Turbo inexplicably said only 65%, or $44,460, was taxable. The IRS of course pushed it up to 85% in a letter to me that increased my tax liability. 65% isn't even a threshold under the IRS, far as I know! I wonder how many other people had this happen to them? And by the way, trying to get Turbo reps to respond is more painful than root canal surgery. I'm still awaiting an answer. What about that 100% guaranteed accuracy! 

[AnnetteB6]

Take a look at the following TurboTax help article to learn how to make a claim against the guaranty provided by TurboTax:

How do I submit a claim under the TurboTax 100% Accurate Calculation Guarantee or 100% Accurate, Exp...
 

[Lars6]

Thanks AnnetteB6 but I suggest you look at that link. Notice it does NOT include 2024 tax year as an option. What shall I do?
Beyond that, I think customers are owed an explanation of what happened. 
Thanks

[Lars6]

Hi AnnetteB6, Any thoughts on how I submit an accuracy claim?

Thanks

[AnnetteB6]

The terms of the guarantee will only pay penalties and interest when you submit a claim.  So since the due date for the 2024 taxes has not occurred yet, the IRS would not have assessed any penalties and interest, they would have only changed your refund or balance due.  I apologize for not making that distinction for 2024 since an accuracy claim would not be appropriate in this case.

You have a couple of things you can do.  One is try to reach TurboTax by phone using the information in the help article below:

What's the TurboTax phone number?

Customer service may be able to help you remedy the situation to your satisfaction.

Or, if you are willing to submit a diagnostic copy of your tax data file, then we can take a closer look at the tax return to be sure whether or not changes are required in the program.  The diagnostic file will not contain personally identifiable information, only numbers related to your tax forms.  

If you would like to provide us with the diagnostic file, follow the instructions below and post the token number along with which version of TurboTax you are using and what states you are filing in a follow-up thread.  

Use these steps if you are using TurboTax Online:

• Sign in to your account and be sure you are in your tax return.
• Select Tax Tools in the menu to the left.
• Select Tools.
• Select Share my file with agent.
• A pop-up message will appear, select OK to send the sanitized diagnostic copy to us.
• Post the token number here. 

If you are using a CD/downloaded version of TurboTax, use these steps:

• Select Online at the top of the screen.
• Select Send Tax File to Agent.
• Click OK.
• Post the token number here.
   

@Lars6 

[Lars6]

Thanks for the info. I will be happy to participate in the diagnostic test. I'm kinda surprised alarm bells aren't already going off all over TurboTax to fix a problem in a fundamental, significant and relatively uncomplicated tax situation. (For many years I've prepared tax returns for low-income people in the volunteer VITA program, so I have some knowledge of this stuff.)

In terms of a remedy, consider: I paid Intuit $150.25 for a service that was "guaranteed" to be accurate. The service turned out to be defective. How are you going to rectify this? I want a remedy, namely a refund of the fee I was charged. 

  If you don't have the authority to do so, please let me know how to proceed. 

Again, thanks for your quick responses and information.

[Lars6]

AnnetteB6, Turns out I can't participate in the diagnostic study because I am unable to get into my tax return or "Tax Tools." I assume that's because I've completed my return. Is there another way to access it? 

[AnnetteB6]

You are probably right that once the return has been filed, you would no longer have a reason to send a file to an agent and that option is gone.  

I do not have the authority or access to the information needed to process any refunds.  You will need to call customer service to discuss with them.  See the information below to get the phone number:

What's the TurboTax phone number?

@Lars6 

[dmertz]

When you log into online TurboTax, on the Tax Home webpage you can click Add a State to reopen your tax file.  You won't actually be adding a state.

Others have noted that where the IRS has claimed that the taxable amount of Social Security income was incorrectly reported, the user has inadvertently answered Yes to the new-for-2024 question that asks if they were a resident of certain countries (or perhaps you some how skipped that question and TurboTax inappropriately defaulted the answer to Yes).

[Lars6]

Thanks dmertz. Yes that question was apparently the reason for the mistake in taxable income. I would love to say with confidence that TurboTax answered incorrectly for me but I don’t know. I certainly don’t recall the question but amidst all the stuff thrown at you who knows? Interesting that 2024 was first year for it. 

[jimkeith53]

I had the same issue on my 2024 federal taxes.  Our Social Security benefits were reported as $69,220    The taxable amount on Turbo Tax was shown as $31,841. . .or 46%.  The correct amount should have been $58,837. . .or 85%.  The confusion was how the following question was worded in Turbo Tax. . ."Did you or your (wife/husband) live in a country where Social Security benefits are taxed?"  I checked off "NO" when asked if it applied to me.  The next question asked if it also applied to my (wife/husband) and I said "YES". . meaning the answer applied to both of us. 

My suggestion would be to edit the original question and separately ask:

1.  "Did you live in a country where Social Security benefits are taxed?"  YES or NO

2.  "Did your (wife/husband) live in a country where Social Security benefits are taxed?" YES or NO

[Lars6]

Totally agree jimkeith53. The question is poorly worded. Reading your explanation, I now think that’s why I (apparently) answered incorrectly. I sure hope TT changes it next year. 

[llshannon]

This happened to me too, resulting in one of those CP12 letters from the IRS.  It's quite annoying.  I hope TurboTax will get this fixed before the next tax cycle.  I didn't re-check TurboTax's calculations because they had always been perfect before.

[Lars6]

I assume (hope?) TurboTax employees read these posts and kick the issue to the appropriate folks to make the change. There are still a weeks left in this tax cycle of course. 

[LaneyN]

I believe this happened to us also. Our Federal tax return was reduced by $3,000 unbeknownst to us when we received our refund by direct deposit. We used the refund tracker and the explanation was shown in there.  They said there was an error in calculating SS taxable income.