Please help - My 2019 return was filed, accepted, and I have completed payment. I recently forgot to include a $90,000 payment for medical malpractice insurance in my return. I am trying to go through TurboTax to file an amended return. I am trying to figure out if I would qualify for this deduction (and if so, would it be for both state/federal). As I am an employee, I've put it under 'Job-related Expenses'. When I go to calculate my refund, I get a significant state refund, but my federal return is 0. If I switch to itemizing my return, I owe more federal taxes, but it's my understanding the only way to claim this deduction is to itemize. Obviously, I don't want to amend my return and end up paying more! Thank you.
If you are an employee, the malpractice payment is a job-related expense. And job-related expenses are no longer deductible on your Federal tax return.
In fact, under the Tax Cuts and Jobs Act, the itemized deductions for job-related expenses subject to the 2% of AGI floor are suspended for expenses incurred after December 31, 2017 through 2025.
Certain states (Alabama, Arkansas, California, Hawaii, Minnesota, New York and Pennsylvania) still allow some deduction of job-related expenses.
Therefore, if you are a resident of one of the above states, you could file an amended state return to claim that expense.
There is no need to file a federal amended return as there is no deduction.
Are you saying even if I had claimed this deduction when I originally filed it wouldn’t have mattered? I do live in CA so I plan on submitting an addended state return; do I have this option through Turbotax? Do I still submit a 1040X?
Yes, if you had claimed this deduction when you originally filed it wouldn’t have mattered.
Yes, you can file an amended return through TurboTax. How to Amend
No, there is no need to file the 1040X. Simply complete Form 540 if you're a resident.
California Customer Service Center at 1-800-400-7115
TurboTax instructions for mailing the amended return says: attach revised forms, schedules, and documents supporting each change...should I include a copy of proof of payment of my malpractice insurance? I assume so, but wanted to double check. Thank you.
Yes. But send copies only and keep originals for your files. California does allow job-related expenses.
How to amend a California state return in TurboTax Online