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sandroDC
New Member

DC married filing separately: help with a bug in turbotax online that allocates deduction to maximize tax rates

Hello,

 

We file married filing jointly on federal tax, married filing separately for DC. I've already paid for turbotax state filing, at which point the system generates a PDF of the return. 

The return is incorrectly prepared, the bug is as follows: 

We have unequal incomes, which turbotax fills correctly in Schedule S, Calculation J, Line E.

 

Line F is about allocating the deduction between the two people, before calculating income per person and the tax per person by a formula. The total amount is correct, but the DC form explicitly states "Enter each person’s portion of the amount entered on D-40, Line 1. (You may allocate this amount as you wish.)" Turbotax online  is assigning all of the deduction to the person with the lowest income, therefore exposing more of the household income to higher marginal tax rates

The correct approach is to allocate all of the deduction to the highest income, as allowed by DC. I don't see how to fix this with the interctions allowed by the turbotax inputs. Please help! Thanks. 

 

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