My TurboTax Premier 2022 is broken

[saychoss]

My TurboTax Premier 2022 is broken. When I add an additional expenses for my rental properties, my amount of federal taxes owed INCREASES when it is supposed to DECREASE. I think there must be a glitch in the program as of 2/26/2023

[AnnetteB6]

In general, you would expect a larger deduction to lower your tax liability.  However, there are certain circumstances where that might not be the case.  

For example, if your rental property has an overall gain and you are claiming the Qualified Business Income (QBI) deduction, then entering additional expenses for your rental property is reducing your overall gain and also reducing your QBI deduction.  Therefore, your balance due is higher because the QBI deduction is lower.

[saychoss]

I have had rental properties for 20 years now. Never before have I seen the tax go up with each new added expense. There were net losses on 3 of the 6 properties, not net gains, but the tax amount went up on each property for each new expense entered. Also, I had depreciation items (new roof, HVAC, etc), and when I attempted to depreciate them in a single year instead of over 10 years, that increased my tax owed amount as well. I still think something in the calculations section for rental properties is broken right now.

[DianeW777]

We appreciate your experience.  You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, here are the instructions: 

TurboTax Online:

Go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

TurboTax CD/Download:

If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:

1. Click on Online in the top left menu of TurboTax CD/Download for Windows
2. Select 'Send Tax File to Agent'
3. Write down or send an image of your token number then place in this issue.
4. We can then review your exact scenario for a solution.

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution. 

[saychoss]

Token# 1085138

[saychoss]

There is 1 other glitch I found in the same rental property section:

-Under QBI-Safe harbor, I tried to add all 6 rental properties to one enterprise with an EIN for my LLC. 3 of 6 properties could be added, but the other 3 did not list enterprise 1 as an option.

[DianeW777]

Please provide the state you are using which will allow me to open the file.  Thank you.

@saychoss 

[saychoss]

Utah is our filing state.

Btw, 2 other issues we found:

1) under the QBI–Safeharbor section of rental properties, TT did not allow us to join all six rental properties under the same enterprise (LLC with EIN)

2) under the state of Utah return, the qualified retirement plan income (military pension) was miscalculating to decrease our overall state tax from $5000+ to $1000+, instead of $3,000+ that our CPA said appeared to be correct. He suspects a miscalculation error involving the code AJ on the TC40? worksheet.

[DianeW777]

Your tax return does follow the correct passive activity loss rules as noted below.

• Rental losses are disallowed in full when income is above the passive activity rules for rental real estate.  When income rises above $150,000 then no passive loss is allowed except to the extent of rental income.  When combining the overall rental income for the current year, including the passive loss carryovers, you are being allowed a loss to the extent of the rental income received this year.  Most of this can be seen on the Schedule E and Form 8582, however the amount showing as rental income is the amount of the loss being allowed on Form 4797. The allowed losses cancel out the current year income even though an excess is not allowed and will be carried forward.

As far as entering them all under one enterprise, I see the statement does not show all of the properties. My advice would be to remove the enterprise selection or mail your return with a statement included with the return similar to RREE Statement (can be viewed by using Forms mode) revising it to include all properties.

You are receiving the qualified business income deduction (QBID) on your tax return.  The basics for QBID can be found in this article:

• What is QBID?

Utah is not one of the states I am familiar with however the rate of 4.85% is calculating correctly when I review the Military Retirement Credit it appears to be calculated correctly and entered in the appropriate line of the Form TC-40.  See the UT Military Retirement worksheet below and you can also click the link.  Compare the worksheet here with your return which is what I did.

Please update if you have more questions.