I am writing to report a critical issue I encountered while filing my 2024 tax return using TurboTax.
My adjusted gross income was $48,000, and a portion of my income came from Social Security. However, TurboTax failed to correctly calculate that 85% of my Social Security benefits should have been taxable based on my income level. As a result, I recently received a notice from the IRS assessing additional tax owed.
Upon reviewing the return and investigating the cause, I discovered that in the "interview" section of TurboTax, the question "Are You a U.S. Citizen Living Abroad in One of These Countries?" defaults to "YES." This is highly problematic. I am a U.S. citizen living in the United States with a U.S. mailing address. I did not actively use the Interviewer, as I have over 40 years of experience preparing taxes and typically work directly with the forms.
This incorrect default setting caused TurboTax to incorrectly exclude a portion of my Social Security income from taxation, leading to a tax deficiency and IRS notice. After researching this further, I found that numerous other users have reported the same issue, yet the software has not been corrected.
This default makes no logical sense for the vast majority of TurboTax users who live in the United States. I urge you to address this issue immediately in your software and provide guidance on how users can ensure it is set correctly. Additionally, I would appreciate information on how TurboTax plans to assist affected users who incurred penalties or interest due to this programming flaw.
