California Form 5805 (Underpayment Penalty) - bug in itemized deductions when using annualized income method

[ssel]

I checked Form 5805 after running through the "underpayment penalty" interview section.  In Part III (annualized income schedule) Line 6 (annualized itemized deductions) there is an error.  Columns (a) through (c) -- for the first three quarters -- all show the correct values.  But column (d) is incorrect.  This should be the easiest column:  since no annualization is needed for Q4, it should exactly match the itemized deductions listed on Form 540.  It does not match.  I haven't been able to figure out a logical explanation for what it's doing wrong to come up with that particular incorrect value, and there's no worksheet or anything that shows the calculations.

I'll note that my itemized deductions are limited, so the itemized deductions worksheet is used to calculate the deduction amount.  This doesn't invalidate anything that I wrote in the previous paragraph:  the amount on Line 6(d) of the annualized income schedule should match the final amount of deductions shown on Form 540.

[DaveF1006]

Since the FTB (Franchise Tax Board) receives both your Form 540 and your Form 5805, a mismatch on this line is a high-risk "flag" for an automated notice. here is how to fix.

If working in Desktop.

1. Switch to Forms Mode.
2. Open Form 5805, Part III.
3. Locate Line 6, Column (d).
4. Right-click the field and select Override.
5. Manually type in the exact amount from your Form 540, Line 18 (your final itemized deductions).

If working online, your best choice is to delete form 5805 and then select the option: "I want the Franchise Tax Board to calculate my penalty and send me a bill." in your California State interview.  To delete.

• Go to Tax Tools
• Tools
• Delete a form
• Delete 5805

The FTB will use your final Form 540 deductions to run their own annualization. They'll see your income was uneven and will likely calculate a lower penalty than the software did. 

[ssel]

Yes, thanks, the override works and that's the way I dealt with this bug.