Just got an IRS notice reducing my Turbotax-generated payment by over $7K. Instead of refund, I owe $3K. According to an IRS rep, I was told shouldn't have included estimated state taxes (as prompted by TurboTax Deluxe). Is this a known issue?
No, please clarify your question.
Please contact us again and provide some additional details.
I entered under Estimated taxes > State estimated taxes for 2023. I paid $7500 in estimated taxes using my state's (MA) department of revenue website. My state taxes are fine. And TurboTax selected the standard deduction, yet still included this amount in my Total Payments and Credits. However, the IRS says that is not correct.
I do understand you frustration.
If you can please check your tax return.
There is a form called Tax Payments or Tax Payment Worksheet
It will show what was allocated to
If your State payments are posted to the Federal amounts it will cause the problem you initially stated.