Mn State tax increases when I import Its deductable

[beeman19]

When i enter my itemized charitable contributions, both federal and state tax due decreases as expected.  When I imported my its deductible amount of around $3300, the state tax due went up (should have gone down), while the federal went down as expected. 

As I deleted each of the amounts from the different dates from the Its deductible import, my mn tax due went down (should have gone up)., and the fed goes up as expected. 

Just adding another cash contribution works as normal for both fed and state and tax due goes down.

my token is 469711 394 117 8855 -627 99 111

[KeshaH]

Thank you for providing your token. I've tried doing my own import and I'm unable to recreate the issue you're having. I recommend manually entering your donations instead of importing at this time.

[beeman19]

This issue is Not an Its Deductible issue, or import issue.

Entering in the items individually doesn't change anything.  I tried that, but good thought. Turns out it has nothing to do with the program its deductible, it is about my total deductions  exceeding the federal standard deduction and MN applying different rules to standard vs itemized.

Looks like this is a turbo tax issue.    Turbo Tax could fix this if they allowed me to use the MN standard  deduction even though I itemized my federal, and allow me to use form M1M instead of M1SA for MN state.  In MN we are allowed to use the standard deduction on MN, and yet itemize on the federal, but Turbo Tax doesn't give me that option, at least that I can find.  And you wouldn't think that would matter, but it does.  I will have to do my MN taxes manually I assume.

In MN, we have our own standard deduction, so MN starts with line 9 of your federal taxes (total income), rather than using line 15 (federal taxable income).  In MN, our standard deduction is $29,150.  But, when your income starts to rise, the standard deduction is phased out (and the phased out deduction is taxed at the highest rate which can be 9.85% max).

And when you itemize federal, it takes the itemized federal number and applies the MN formula and results in a reduced  MN itemized deduction.  So, when I used my itemized deduction total from my Federal, my new MN itemized deduction increased by $300 over the MN standard deduction  But now that I itemized my MN taxes (and it is automatic in TurboTax), MN no longer lists the charitable contributions on line 11 of the schedule M1M which is also listed on line 7 of the MN taxes. So, my MN income is higher and my taxes are higher, of course at the highest rate.

My actual my example to help me understand, I adjusted my charitable deduction for one donation from $440 to $445. At $440 I was at just below standard federal deduction of 29,200, and state tax owed was $6223, but when I increased that donation by $5 so I was above the $29200, my state tax owed is now $7044.

I talked with MN dept of Revenue, and they confirmed this.

[beeman19]

Turbo tax came out with an update to the MN tax, where it compares taking the standard deduction for MN state taxes vs the itemized deduction.  It correctly says that I should take the standard deduction (rather than automatically assuming the itemized deduction), but then when I look at the actual tax form, it still uses the itemized deduction and doesn't fill out the M1M form to be used on line7 of my MN taxes. 

This is a pretty simple fix that was released before it was verified.  Pretty bad if you ask me.  Hopefully TurboTax will catch and fix this before I have to complete my taxes.  

I have no idea how to talk with the turbo tax people.

[MarilynG1]

Have you tried a Manual Update?  Here's how to Contact TurboTax Support.

I see that you sent a token file on February 11; if you would like to send an updated one, I'll try to determine what is happening with the Standard/Itemized issue. 

@beeman19