Arizona Small Business Income (SBI)

[nachserv]

Greetings,

When completing my Arizona State return via the TurboTax desktop program, I am being asked if I want to voluntarily fill out an Arizona Small Business Income (SBI) Tax return.  I have no idea why I am being asked this since I do not have any business.  I went back to my federal return questionnaire and confirmed that I had no entries in the Business Items section nor the 1099-Misc or Other Incomes section under Wages and Income.  Thanks in advance.

[JulieS]

Yes, it may seem  odd, but for Arizona  a “small business taxpayer” means any individual taxpayer who reports on their federal income on the following schedules and forms: 

• Schedule B, interest and ordinary dividends.
• Schedule C, profit or loss from business.
• Schedule D, capital gains and losses
• Schedule E, supplemental income or loss.
• Schedule F, profit or loss from farming.
• Form 4797, sale of business property.
• Form 4835, farm rental income and expenses.

Because Schedule B, D and E are included on this list, many people with investment income only will be considered Arizona small business taxpayers. 

Click here to learn more. 

[nachserv]

Thanks for the response.  I believe I have tracked down what is triggering the program to ask me about filing an SBI tax return in the state portion.  We were issued a 1099-INT (listing $30 in interest income) from the mortgage company on a second home.   When I remove the amount, the state questionnaire no longer asks me about filing an SBI tax return.  I wonder if answering no to the question about voluntarily filing an SBI tax return will cause any errors in my return.