Hello, an please help! Big difference from this year compared to last year.

[jetsangaris]

Hi,

I did my taxes using TurboTax desktop.  Last year, I did not owe any Federal Taxes, and a little <$450 State Tax.  This year I was quite shocked that I owed over $800 Federal, and over $400 State.

Not until I actually filed the forms did I get the "helpful" message saying something about QBI deduction.

I've done a little research, and see that, as an Uber driver, I should be able to claim this.  Also, I earn far less money than the max.

Turbo Tax said this is calculated automatically, but I don't think it was calculated at all.  I've never owed this much tax before.

Can someone please help me?  Is it possible to amend an already filed return and calculate for QBI, and if so, how?

Thanks, and I hope someone can help.

P.S.  I put I don't know for the platform, because I used the Windows version, and it was not listed!

[jetsangaris]

Me again,

I also wanted to add that I am on a Federal Disability (SSDI), and totalled a car last year during working.  The program also asks me questions that I don't know how to answer regarding Basis Points, depreciation, etc.

I had no idea how to answer these questions, so left them blank.

I do keep track of all of my work mileage though, if that helps.

I believe that the somewhere in the combination of what I've said, something is wrong causing me to owe so much tax.

Thanks!

[BrittanyS]

If you qualify for the QBI deduction and you do not see it calculating on your return, you can follow these steps on TurboTax Desktop:

1. Click Forms in the top right-hand corner
2. Click Schedule C
3. Click the box for "you are qualified for the QBI"

You can amend your return in TurboTax.  The IRS will first have to accept or reject the return.  

If the return is rejected in TurboTax, you will receive a notification with a rejection code from TurboTax, and the return will be opened back up to make changes.

If your return is accepted, you will need to follow the following steps in TurboTax to amend the return:

1. Sign in to TurboTax
2. On the home screen, scroll down to Your tax returns & documents and select the year you want to amend
3. Select Amend (change) return, then Amend using TurboTax Online
   • If you're told to amend your return via TurboTax Desktop, follow the steps for TurboTax CD/Download below instead
4. On the screen OK, let's get a kickstart on your amended return, select the reason(s) you're amending and Continue
5. When you reach Here's the info for your amended federal return, select Start next to the info you need to change
6. Continue through the screens, make the changes you need to make, and carefully answer the remaining questions to finish amending your return

For more information on amending returns, see the link below:

How do I amend my federal tax return?

[BrittanyS]

Can you clarify if you claimed the business vehicle expenses when you completed Schedule C?

[jetsangaris]

Thank You!

I have a Doctor's appointment coming up in a little bit, but when I get home, I will proceed with your stated instructions.

Thanks again,

JT

[jetsangaris]

Also, both returns were accepted last night.

[BrittanyS]

If your returns were accepted, you will need to follow the following steps in TurboTax to amend the return:

1. Sign in to TurboTax
2. On the home screen, scroll down to Your tax returns & documents and select the year you want to amend
3. Select Amend (change) return, then Amend using TurboTax Online
   • If you're told to amend your return via TurboTax Desktop, follow the steps for TurboTax CD/Download below instead
4. On the screen OK, let's get a kickstart on your amended return, select the reason(s) you're amending and Continue
5. When you reach Here's the info for your amended federal return, select Start next to the info you need to change
6. Continue through the screens, make the changes to your QBI and add the vehicle expense to your schedule C, and carefully answer the remaining questions to finish amending your return

For more information on amending returns, see the link below:

How do I amend my federal tax return?

[jetsangaris]

Yes, I did claim vehicle expenses.  Does that make a difference as to what I had asked?

[BrittanyS]

Although your car was totaled, if you received income from the insurance companies (insurance and gap) the income received from the sale of an asset (vehicle) is not subject to self-employment tax.  However, there is also depreciation recapture to consider if the car was used and claimed on previous tax returns.

TurboTax can help you calculate the loss, gain, or depreciation recapture.  To enter a loss of a business asset in TurboTax, you can follow these steps when you amend your return:

1. Click Wage & Income from the left-hand side panel
2. Click Edit/Review Under Self-Employment
3. Click Review under Self-Employed Business
4. Add/Edit Vehicle and make sure to mark I stopped using this vehicle in 2022
5. Finish Interview Questions

@jetsangaris 

[jetsangaris]

Hello and thank you.

I did do so for the totalled vehicle, as well as the one I replaced it with.

It made mention, for both vehicles if I remember correctly, basis points.  I am NO accountant, and I actually have no idea what this is.  I entered the time I used vehicle 1, said I stopped using it, and entered the new vehicle as well, and the miles I drove on it.

Could it be that the vehicle that got totaled, caused this issue because the vehicle I replaced it with actually cost much more than the previous vehicle?  I made a mistake somewhere, and I KNOW I shouldn't owe this much in taxes, but I am no accountant, believe me.  I've used TurboTax for years, and never run into this situation.

Can the fact that the new vehicle was worth way more than the totaled vehicle?  And, then are these "basis points".  Not to sound stupid, but I'm struggling to come up with what this is and how to handle it.  I got like $16,500 for the totaled vehicle, but but a car, still used, that cost 34K.  Can this be causing me issues.

I have used turbo tax for years, and have never had this kind of situation.  Is the money from the insurance company for the totaled vehicle taxable?  When I entered my info in Turbo Tax, I put how much I got for the totaled vehicle, as well as how much I paid for the new vehicle.

What I am pretty sure of is this:  If I only eared via work say 20K, and got 20K in SSDI, I don't see how my taxes could be more than I earn via work in a month and a half.

Let me know what you think.

Thanks,

JT

[AliciaP1]

Can you clarify if you are using TurboTax Online or are you using a CD/Download version of TurboTax?  This will help me line out the steps to verify you entered your vehicle disposal and purchase correctly.

@jetsangaris 

[jetsangaris]

Hi, sorry for the late reply.

I am using Turbo Tax Download version for PC.

I looked through the forms, and it seems there is a figure in the QBI form.

So, I am having a problem understanding why I owe so much.  I think I did something wrong with the part having to do with the totaled car, and the newer car.

But, I am afraid to make any changes, because I do not want the tax amounts to go up.

Any help appreciated.

Thanks,

JT

[AliciaP1]

Unless you used the vehicle (either the totaled one or the new one) 100% for business and no personal use, you should only be reporting a percentage of the $16,500 you received for the car as a sales price to calculate your potential depreciation recapture.  If you took the standard mileage deduction you need to figure out the portion of the deduction that was attributable to depreciation so TurboTax can calculate the "sale" correctly.  See Depreciation Rates to calculate your depreciation under the standard mileage rates.  If you used actual expenses you should see your prior years' depreciation on your prior years' returns.

Also, the "basis" questions include "If you got this vehicle by trading in listed property (generally another car) that you used less than 100% of the time for business, enter your gain or loss basis" and that means if you bought the totaled car with a trade-in that was either a personal car or only partially used for business and paid money, your basis is the value of the trade-in plus the money you paid.  If you started your business while already owning the totaled car, you will still only enter the vehicle's total cost (the purchase price) and will leave the basis boxes empty.

If you want to amend your return and make changes to your vehicle expenses for your business, you can follow these steps in TurboTax Desktop:

1. Open the TurboTax CD/Download software for the year you're amending
   • For example, you must amend your 2022 return in the 2022 version of TurboTax
2. Under Need to File an Amended Return?, select Amend a Filed Return
   • The 2019 version of TurboTax may say Amend a return (make changes) after it was filed and accepted by the IRS instead
3. Select Amend for the return you need to amend
4. On the We’ll help you change (amend) your return screen, select Continue
5. Select Yes, I’ve already filed my return
6. Choose the option that best applies when asked Tell us a little more about your amend situation and Continue
7. On the next screen, select Update next to the info you need to change
8. Continue through the screens, make the changes you need to make, and carefully answer the remaining questions to finish amending your return
9. Don’t forget to select Save As (or Duplicate on Mac) from the File menu when you save a copy of your amended return. This will preserve the tax return you originally filed
   • Give the file a different name from the original, like 2022_amended_tax_return_Smith
10. Under Business Taxes and Business Income and Expenses select I'll choose what I work on
11. Click Update for Business Income and Expenses
12. Click Edit for your business then scroll down to Business Vehicle Expnese and click Update
13. Click Edit for the totaled vehicle first
14. Based on the information I provided above, ensure your totaled vehicle information is entered correctly 
15. The last screen before you click Done shows your gain or loss on the disposition of the totaled car
16. On the Vehicle Summary screen, click Edit for the purchased during 2022 vehicle and verify your information is entered correctly

If your tax amount has not changed and/or you entered everything correctly the first time, you do not have to file your amended return.  If the tax amount did change, you can then file your completed amended return since your returns have already been accepted. 

@jetsangaris 

[jetsangaris]

Hello,

I understand you instructions on amending, but my main issue is that I don't understand why my taxes are so high and they have never been that way before, and I've been doing this job, this is the 3rd year.

I can't help but think there is something that I either did or did not enter correctly, ie. Basis Points, which I left blank.

The return I actually filed was actually the first one I did, about a month ago.  I was mystified why it was so high, so I actually did 4 more iterations of returns, and the wow moment was that each one was higher than the one before, and much more than the first one, which is the one I ended up filing.

I am certainly no tax expert.  I just wish I could narrow down the WHY it is so high this year, when it has not been the last 2 years.  And, I hate not knowing things.  There has to be a logical reason why it is so much higher than the last 2 years, and I don't know how to figure out why on my own.  And, going back to school and getting a second degree in accounting is not an option!

From the 5 returns I did, with the first one being the lowest, each one progressively went up!  Finally, on the 5th one, it had my Federal due as nearly 10K!  So, I won't be amending anything in the near future, because I do not know the cause of the much higher than usual tax.

If anyone can explain to me how perhaps totaling a car, buying another one, and SSDI play into this scenario, please explain to me.

Thanks so much,

JT

[jetsangaris]

Hi,

I've re-read what you've written, and it seems to make more sense now.  So, putting it the way I understand it, I don't enter 16,500 for the money received by insurance for the totaled car; I would multiply it my percentage of usage (which was 87% for work.

And for the new(er) replacement car, what I have should be right, but I can look and see.

Great idea about saving as XXX, that way I don't lose my original.

I will work on this tomorrow.  I'll be in heaven if the amount goes down!

Thank you so much again,

JT

Lastly, if I multiply 16,500 by 87%, I get $14,355.  Being as inept as I am at doing taxes, does this sound like something that should lower my total tax bill?