Ohio Department of Taxation sent me a letter stating that My Federal Schedule C, E, &/or F does not match the business income claimed on Ohio IT BUS. They are adjusting my Ohio Income tax return.
I had TurboTax go through everything step-by-step. The program entered the information on both Federal & State Returns. I filed via TurboTax simultaneously.
If Intuit prepared both returns and filed then, WHY am I getting this notice? What will Intuit do to correct this situation?
If you purchased Audit Defense for your tax return, call Tax Resources, Inc. at 877-829-9695, or report your notice on their web site at http://intuit.taxaudit.com/. Do not contact the IRS. Let Tax Resources contact them for you.
This is the membership email you should have gotten: https://ttlc.intuit.com/questions/1901569-when-will-i-get-my-audit-defense-membership-kit
If you did not purchase Audit Defense:
TurboTax has a special phone number for help with IRS tax letters, which will be easier than going through regular Customer Support. At the page below, click on the blue button that says "Get Help from TurboTax Support". Then it will ask you what tax year is your letter. Then it will ask you what the letter concerns. Then it will show you the phone number during posted business hours.
https://support.turbotax.intuit.com/irs-notice/audit-support/
Also see the following link on the IRS web site for more help.
http://www.irs.gov/Individuals/Understanding-Your-IRS-Notice-or-Letter
The Ohio Small Business deduction (Form IT BUS) is mostly manual, in Turbotax (TT). In the Ohio interview, you will be asked if you qualify for the Small Business deduction (SBD). When you answer yes, it will take you to a series of screens where YOU will fill in the amounts.
For most people, it's one single entry for your business income (usually from the federal Schedule C. If you show business capital gains in the federal section, you will get an additional entry box for that.
I received the same letter and could not get an explanation for the discrepancy. In both cases the Schedule C income per the Federal Return was less than on the Ohio IT BUS. Business Income schedule. In theory, both amounts should agree. I can't find a work sheet or any other explanation for the difference for both years. The state has sent me a letter asking me to explain the difference. What would Turbo Tax have me do?
The proper amounts for 2020 Schedule C income and Ohio IT Bus agree. So 2020 does not appear to be an issue.
I AM BEING AUDITED
If you purchased Audit Defense:
https://ttlc.intuit.com/questions/2924451-i-bought-max-or-audit-defense-and-now-i-m-being-audited
AUDIT SUPPORT
https://support.turbotax.intuit.com/irs-notice/audit-support/
@jrwhitten The most likely explanation is user error. As explained above:
The Ohio Small Business deduction (Form IT BUS) is mostly manual, in TurboTax (TT). In the Ohio interview, you will be asked if you qualify for the Small Business deduction (SBD). When you answer yes, it will take you to a series of screens where YOU will fill in the amounts. For most people, it's one single entry for your business income (usually from the federal Schedule C).
I would go back into the TT interview and verify what I entered. Unfortunately, TT also asks if any of your interest, dividends and capital gains qualify for the SBD / BID (Business income deduction). They seldom do. You may have accidently made an entry there. Rental income also qualifies for the BID, but must be adjusted for rental losses.
The Ohio Dept. of Taxation (ODT) has been clarifying the BID rules, over the few years it's been in existence. In was easy to make mistakes in the first few years.