Why was retired military income deducted twice by Turbo Tax? I now have to pay over $1100 difference.

[l_d_mitchell-hot]

It appears Turbo Tax calculated my tax incorrectly.
What is my recourse?

[Critter-3 · Accepted solution]

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[Carl]

More than likely, it's user error. What I see quite a lot for those receiving their first 1099-R upon retirement, is they incorrectly enter it in the W-2 section. Then ask for help when they become aware everything required in the W-2 section is not on the 1099-R.

Then when informed of where to enter it correctly in the retirement income section, they enter it there without deleting what was already entered incorrectly in the W-2 section of the program. Therefore, the income is double counted due to user error.

I say this, because as retired military myself, I am a bit familiar with the errors and mistakes new retirees make on their taxes when it comes to reporting the 1099-R retirement income.  Also, I wasn't exactly perfect either, in my first year of reporting my retirement income. Been there, done that, got the T-Shirt. 🙂

[l_d_mitchell-hot]

It is always possible it could have been user error.  However, I have used Turbotax for over 30 years and have been retired from the military for over 20.  The problem seems to be that Missouri started a new procedure for 2021 which deducts the retired amount from income and not deductions.  Turbotax deducted from both.  MO did not like double dipping.  I think Turbotax should have caught the new change.

[Carl]

Thanks for the feedback. You did not mention this occurred on a state return. I was of the assumption the issue was with the federal return. You'd think after 20 years of service myself, I'd know better than to "assume" anything. 🙂 Being that my state of FL does not tax personal income, that's most likely why I didn't even consider the probability of this being a state tax issue.

[l_d_mitchell-hot]

I will complete the requirements for getting a refund of penalties and interest from Turbotax.  I am waiting for the final resolution with the state of Missouri. 

However, I am disappointed with the software error Turbotax made in completing my Missouri tax.  I have used the program for over 30 years and have been very happy with the results.  This was the first time I have ever had a problem.  I just want more attention applied to state taxes so I do not have this occur again.

[l_d_mitchell-hot]

After 4 1/2 months I finally received a check from MO Department Of Revenue for the money they owed me from my 2021 state tax return.  It was for the total amount I had originally computed using Turbo Tax plus interest.  There was no apology for their error or the hours I spent in correcting their error.  Not surprised.

Thanks Turbo Tax for your assistance and your CPA (Melanie) and Amanda R. in resolving this problem!