form 1065 and Amended tax question

[matto1]

I finally received my form 1065 yesterday.

Because I owed money and needed to file a form 2210, I filed my taxes in April so as to avoid any further interest penalties, with a "best guess" as to what would be on the 1065. Of course it wasn't quite accurate -- fortunately I guessed high so I should get a refund on the amended return. My guess was high enough so that TurboTax says I'll get a $162 refund, so of course I'll file it.

That said, I have questions:

1) the form 1065 has both box 1 and box 2 checked. I believe that means I have to separate it in to two forms in Turbo Tax, correct? There is also a statement for Box 20 Z. Should I logically put the "Rental Real Estate Income" in the box 2 form and the rest in the box 1 form, or does it even matter?

2) This is "income attributable to another state" in my Michigan state return, so essentially a no-op for state. HOWEVER, the updated 1065 does marginally lower my AGI (the out of state income is lower by the same amount). Due to how Michigan does taxes, this ends up lowering my tax burden by $3. But, when I go to the form for the Amended Michigan Return, for which I also did MI-2210, there is an entry for "Payment with Original Return" with "NOTE: Do not include penalties or interest." So when I bring it up in TurboTax, is shows me owing $119 -- the original form 2210 $122 penalty, minus the $3 I just referenced. How and where do I make the update to show that I already paid the $122? I literally see no place to put that in -- there's "payment with original return" and "overpayment from original return," and this is neither, it's the form 2210 amount. Or, do I just skip doing a Michigan Amended Return altogether? This could conceivably cause an issue next year, I suppose, since the 2024 Federal AGI is changing.

Thanks for any help.

[JotikaT2]

Yes, you will need to enter it as if it were two separate K-1 forms.  On one K-1, you will enter the business activity and on the other, you will enter the rental activity.  As for box 20, code Z, this is for qualified business income so it would most likely be related to the business income as reported on line 1.  Therefore, you should report it to match the entries for box 1.

As far as your Michigan amended return, can you clarify what is happening?  Was the entire amount you paid with your original state return comprised completely of penalties?  Essentially, if your Michigan return has changed, you should still file the amended return.

Essentially, the amount to be entered on the page asking for payment should only be the total tax paid without interest and penalty payments.

Since you have already paid a portion of the penalty, another option is to let Michigan bill you for any remaining underpayment penalty.  You will find this option in the Other tax situations, Underpayment of Estimated Tax in the state interview screens.