Michigan Schedule 1 Line 1

[sgs112]

There is a number that is being populated in line 1 on Schedule 1 of the Michigan return does not match any numbers on my return or any sum of numbers.  In trying to resolve the issue, I switched from "EasyStep" to "Forms" and found the number is pre-populated with no worksheet.  It is unclear how TurboTax is calculating the number.  You cannot right click using the cursor pointer over the entry.  

I understand the Michigan directions which tell you to input gross interest and dividends from obligations issued by states other than Michigan.  I think I know my numbers.  The problem is my numbers don't match what Turbotax has input, and I cannot change it.  So, can someone give the exact forms and lines where information is pulled from to calculate line 1?  Or give us the ability to change that number?  

I have been on the phone for over an hour already talking with "support".  They cannot contribute any information or see the "forms" section in question when sharing screens so they weren't able to help.  I've paid $45 for the states version so it would be nice if I could get some answers.  I think it is a software glitch and I don't want to pay additional tax on a number that I cannot support.  Who can help?

[LeticiaF1]

TurboTax transfers data from your federal return to your state return. If the info in your federal return is incomplete or incorrect, your state return won't be complete or correct either.

Go back through your federal return (starting at the Personal Info tab) and make sure everything's correct.

Once you're done, select the State Taxes tab and review the state section. Pay close attention to the info, especially if you made changes to your federal return. There might be new sections that need to be completed.

Sometimes changes made to your federal return won't transfer if you override info in your state return. If this happens, delete your state return and start over.

Please contact us again if your issue continues.  

[sgs112]

Let me be very specific...can I get the exact form and/or lines from the Federal return where TurboTax is pulling  information to input or calculate line 1 of Michigan Schedule 1? 

This line adds income to the Michigan tax return, which is then taxed.  It is not sufficient to simply "hope" Turbotax has the correct number, ESPECIALLY WHEN it is know that sometimes changes made to the federal return cause issues in the transfer to the state return. If TurboTax can tell us how line 1 is calculated, then it is easy to go back to check if it is accurate.  

Again, I've spent over an hour on the phone with support who are unhelpful.  Just need someone to give directions on where that number is coming from.  If not, consider it a programming error and allow users to change the number on the form instead of locking it in.

Help still needed!

[Getsmarts]

I am having the same issue.  My number for MI Schedule 1 Line 1 is $2,081 but cannot figure out where TurboTax got that info from.  To complicate things I need to Annulize my income for the four periods to reduce or eliminate my underpayment penelty (even while getting a refund).

[AmyC]

According to the program:

Data Source
Schedule 1 : Line 1

From federal Form 1099-INT, Box 8 or Form 1099-DIV, Box 11 amounts with a State ID other than MI, GU (Guam), PR (Puerto Rico), AS (American Samoa), FM (Federated States of Micronesia), MH (Marshall Islands), MP (Mariana Islands), PW (Palau) and VI (Virgin Islands); and from Schedule K-1 Worksheets for Partnerships, S Corporations and Estates, Tax-Exempt Interest Income with a State Name other than MI, GU (Guam), PR (Puerto Rico), AS (American Samoa), FM (Federated States of Micronesia), MH (Marshall Islands), MP (Mariana Islands), PW (Palau) and VI (Virgin Islands). This total amount is reduced by related adjustment amounts on the 1099-INT Worksheet which have an adjustment type associated with them.

About Line 1

Schedule 1, Additions and Subtractions

Schedule 1 calculates additions to or subtractions from federal adjusted gross income. Some information in this form flows from the federal return or other Michigan forms and schedules. Other data should be entered as appropriate. See the government instructions for more information regarding amounts to enter on this schedule.

Other State Municipal Bonds (Line 1)

Full-year residents: The program automatically computes this amount. There is no need for an entry here.

Part-year residents: Enter income received while a Michigan resident.
 

@Getsmarts  @sgs112 

[sgs112]

I totally agree with AmyC that Line 1 of Michigan's Schedule 1 should be:

Amounts with a State ID other than MI (just to shorten it up) from Forms 1099-INT Box 8,  Form 1099-DIV Box 11, and K1 Tax exempt interest, minus any 1099-INT adjustments.  

The number that TurboTax calculated for my Schedule 1 Line 1 does not match the information I calculate or have input in my Federal return that should transfer over.  So there is either an error in the Michigan forms calculation, or TurboTax will need to include a worksheet for Michigan's Schedule 1showing the calculations to prove the number is being calculated correctly  

This should be a straightforward calculation so the fact the numbers don't match is an issue.  I can't submit my taxes not knowing if this calculation is causing me to pay additional taxes.  

Still need help!

[AmyC]

I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. Please notify me by adding @AmyC to your response. If I discover a solution, I will reply. Otherwise, it will be moved on to an investigation team.

You can send a token to me by following the directions below:

TurboTax Online:
Sign into your online account.
Locate the Tax Tools on the left-hand side of the screen. 
A drop-down will appear. Select Tools 
On the pop-up screen, click on “Share my file with agent.”
This will generate a message that a diagnostic file gets sanitized and transmitted to us.
Please provide the Token Number that was generated in the response.

TurboTax Desktop/Download Versions:
Open your return.
Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent”
This will generate a message that a diagnostic copy will be created. Click on OK and the tax file will be sanitized and transmitted to us.
Please provide the Token Number that was generated in the response.

@sgs112 

[Getsmarts]

I submitted a protected copy of my return.  My token number is 1220726.

Steve

[Getsmarts]

@AmyC

I submitted a protected copy of my return.  My token number is 1220726.

Steve

[AmyC]

I see that the amount listed on your sch 1 line 1 matches the amount you listed in the program as more than one state. You have one set of dividends listed as all MI. The other, Schwab, is listed as other. If that is correct, the entry is right and all is well.

If some of that was in MI, you need two entries, one for MI and one for other states.

@Getsmarts 

[sgs112]

@AmyC

I also have submitted a file with the token number: 1220775.

I am using the downloaded Premier version of TurboTax so the process to send the file was a little different than described.  Hopefully it transfers properly.  Thank you for your assistance.  

[sgs112]

@AmyC 

I am assuming Product Support has been contacted for my token number 1220775.  When might I expect updates and where will I find the updates?  Thanks!

[LITalum]

Yes, there is an error in the way Turbo Tax computes Michigan Sch 1, line 1.  TT oversimplifies  this input (you don't have a way to input it on Mich inputs, it automatically populates based on Fed 1099-INT/DIV inputs).  In my case, I had Tax Exempt interest from Muni Bonds.  Using round numbers here, $50k Tax Exempt interest and $25k for Bond Premium for a final tax free $25k tax exempt int on FED 1040 line 2a.  An average 50% Bond Premiumfor all tax exempt bond interest, Michigan and otherwise.  In my case, my Michigan Bond Premium was only 30%, which (see your year end report).  TT uses the overall average of 50%.  So 50% was subtracted from the Michigan only interest instead of 30% to determine the net non-Michigan Tax Exempt interest for auto entry for Mich Sch 1, Line 1.  The net (gross) non-Michigan number for this input that is too high and resulting in a higher Michigan tax.  The simple way around is to artificially adjust your Michigan Tax Exempt interest portion upwards on the FED taxes until Sch 1 Line 1 matches the number it actually is.  All this info is in your year end summary that is not reported to the IRS.  You need to keep detailed notes of what you did in your tax records that will be easily explained to any auditor if that happens.  Turbo tax should allow for you to use your year end summary data supplied on your 1099 to input info into Michigan Sch 1 for this.   I assume it was oversimplified by TT to make things easy to produce TT software.  There is a manual way to override TT inputs, I just forgot how.  Will dig it up.  

[sgs112]

@AmyC 

Taxes are due tomorrow and there is no update on how to fix this miscalculation for Line 1.  Do I just request a product refund and how do I do that?  

[sgs112]

Following up on this post as I think it contains some misinformation regarding the line tax exempt interest is reported on the 1099-DIV.  It should be line 12, not line 11.  Correct, @AmyC ?

Therefore, Michigan Schedule 1 Line 1 should be the addition of:

1099 Interest Line 8 minus Michigan portion of interest

1099 Dividend Line 12 minus Michigan portion of interest

K1 Tax Exempt Interest line 14 code A minus Michigan portion of interest

Less:

Adjustments such as bond premiums listed on Line 13 of 1099-INT

As mentioned by LITalum, if Turbotax is assuming a standard percentage bond premium instead of the actual percentage, a person could be overpaying taxes to Michigan.  To correct this, you would have to falsify information input to the Federal questionnaire in order to get TurboTax to put the right number on Michigan's Schedule 1 Line 1 because TurboTax does NOT provide a worksheet for Michigan Schedule 1, or any other way to change the number.  This is a programming error and should be corrected.