Ohio Business Income deduction and joint filing credit

[poseypatch]

My spouse only has qualifying business income which is fully deductible; therefore it looks like we don't qualify for the joint filing credit this year.  Do I need to deduct all of his business income or can I allocate just enough so that he will have the $500 of qualifying income?  He really doesn't have that much business income and did not take any retirement income this year and if I only allocate a portion of his income for the deduction we would qualify for the joint filing credit which would end up giving us a larger refund.  Thanks!

[AmyC]

The IRS expects you to take every deduction to which you are entitled.

[poseypatch]

I'm talking about the Ohio state tax, not Federal

[timmar93]

Did you ever get an answer to this?  Because I think TurboTax is NOT considering which situation is better (Taking the business income deduction or the joint filing credit)

[timmar93]

I also think you did not address the issue.   I think TurboTax is NOT considering which situation is better (Taking the business income deduction or the joint filing credit)

[Hal_Al]

Yes, you may reduce your Ohio business income deduction (BID), in order to claim the Joint filing credit (JFC).

But, TurboTax is not capable of making the decision for your or comparing options.  You have to decide the amount.  "Usually", you just need to end up with $500 profit. So use all but $500 for the  BID. But beware of the JFC income adjustments from Schedule A.  Review the JFC allocation worksheet. 

[poseypatch]

I've already filed and unfortunately, did not get the Joint Filing Credit and don't want to file an amendment in case it triggers something.... I guess the state needs $$ more than I do (that's a JOKE).

[weechenna]

How (step by step, please!) do I reduce the business income deduction to take advantage of the joint filing credit?

[Hal_Al]

In the Ohio interview you will be asked to enter how much of several categories of income is qualified business income.  In the  Schedule C  box, enter the amount you want to count.

For example, if your Schedule C profit is $2000 and you need $500 to get the JFC, enter $1500 in that box.

Review the JFC allocation worksheet, before filing, to be sure the calcs worked out (beware of the JFC income adjustments from Schedule A, e.g. medical expenses and the 529 plan contributions).