zero taxable income

[confused250]

My only income is social security and required minimum withdrawals from IRAs. No early withdrawals. No self employment.  My expenses far exceed income, primarily due to nursing care for activities of daily living. Turbo tax shows I have zero taxable income but says I owe over $2000.  How can this be?

[Critter-3]

Click on TOOLS then PRINT CENTER and look at the form 1040 lines 16 - 24 to find the answer to your question. 

[rjs]

To expand on what Critter-3 said: You need to look at the actual tax forms, not summary screens in TurboTax.

You didn't say whether you are using TurboTax Online or the CD/Download TurboTax software. If you are using the CD/Download software, you can look at Form 1040 and Schedules 1, 2, and 3 in forms mode. If you are using TurboTax Online, see the FAQ at the following link for instructions to view your Form 1040. "Preview my 1040" will also show you Schedules 1, 2, and 3.

How do I preview my TurboTax Online return before filing?

On Form 1040, line 15 is your taxable income. Is it zero?

The $2,000 that you owe should be on Form 1040 line 16, 17, or 23. Which line is it on? If it's on line 17 or 23, it's coming from Schedule 2. Which line of Schedule 2 is it on? That will tell you what it's for.

It doesn't matter that your expenses are more than your income unless you are claiming a large itemized deduction for the nursing care. If Form 1040 line 15 is zero, the itemized deduction, if any, has been taken into account. Itemized deductions do not reduce the other taxes on Schedule 2.

[NCperson]

@confused250  are you using the online or desktop version?

there was another post in the last 2-3 days, where some said they had tax on Schedule 2 when they also had a very simple return and the tax was not explanable. 

maybe a bug? 

[confused250]

Thank you.  Line 15 is 0. The tax comes from Line 8 of Schedule 2.  As far as I can tell that is either self employment tax or early withdrawal penalty, neither of which applies.  Is there any other type of income which would show up on Line 8 of Schedule 2.  Thanks again.  

[VolvoGirl]

Line 8 is for additional tax on IRA.  Did you take all your RMD?  Try deleting your 1099Rs and re enter them.  You might have answered a question wrong,  

[rjs]

Additional tax on IRAs usually means either you took a distribution before age 59½, you made an excess contribution, or you failed to take a required distribution (RMD). If none of these reasons make sense, then as VolvoGirl said, you might have answered a question wrong when you entered your 1099-R forms. Review the entries, including all of the follow-up questions, or delete the 1099-Rs and reenter them.

You still haven't said whether you are using TurboTax Online or the CD/Download TurboTax software. If you are using the CD/Download software, or the Online Free Edition, you can look at Form 5329 and see which section of that form the tax is coming from.

[confused250]

Thank you all. It all came down to a data entry problem.  But I wouldn't have known where to look if I had not been directed to Schedule 2

[VolvoGirl]

What was it?  How did you fix it?  It may help someone else.

[confused250]

Apparently, the default for Turbo Tax is to assume all withdrawals from an IRA are subject to penalty even though you enter your birth date at the beginning of the questionnaire, There is a long list of reasons you can check which allow a withdrawal before 59 1/2 without penalty.  At the end of the list, you can check you are over 59 1/2.  I missed it, but seems like an illogical place to put that.

[VolvoGirl]

No that's not right.  I don't think it asks if you are over 59 1/2.   Did you enter the right year on your birthdate?  Or are you married and your spouse is under 59 1/2?   What code is in box 7 on the 1099R?