Other Income Taxes - Mystery Value

[SteamTrain]

No...it is not considered income...it is considered a "potential" 2022 Federal income deduction...but like I said, it's unlikely it will be used that way at all since, as a dependent, he is unlikely to be using itemized deductions on his Federal tax return.....so the $$ will "(likely) just sit there in that field and not be used for anything.

Hmmm might be used in state taxes for determining if an underpayment penalty applies, if He owes too much to the state this year on his 2022 state file...but states vary wildly on how that might be considered.

[VolvoGirl]

No it's not income.  It can be a federal Deduction on Schedule A if he itemizes and doesn't take the Standard Deduction.  But he is probably taking the Standard Deduction.  Just ignore it.  Check the actual federal return.  It shouldn't show up anywhere.

[Opus 17]

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@MacTigger wrote:

I see now.

Yes, he did pay $247 to the state last year when he (I) filed his 2021 tax return.

So, that amount is now carried forward to 2022, and it is considered "income" of some sort, and he has to pay federal taxes on it now?

Mac

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No, it's not income.  It's being noted as a tax that was paid.

Taxes that are actually paid during calendar year 2022 are sometimes deductible on a taxpayer's 2022 tax return.  This includes amounts paid in 2022 for prior year tax returns, as well as withholding from the current year--it all counts as tax payments made in 2022.  So Turbotax keeps track.  Because of your son's tax situation, those taxes are ignored, they are neither taxable nor deductible.  It's just Turbotax's way of keeping track, and sometimes the program shows you something that is not relevant to you.  

[MacTigger]

Folks,

Now I get it.

I thought that this was the cause of his federal taxes being over $100 higher this year, even though the RMD was less in 2022 than in 2021.

Yes, he is just getting the Standard Deduction, as far as I know. How can I check that to make sure that I chose that?

Thanks again for all the hlep.

Mac

[SteamTrain]

You don't need to check that StdDed selection...TTX will automatically select it.

Line 12 of the Form 1040...but I seem to recall the $$ amount on line 12 for a dependent rises to ~match line 11 until  $12,950 is reached...then it locks. 

But I'm not sure of the details on that.   IF no schedule A is generated when you create a "File-Only" PDF copy of his tax return...then they are using Std Deduction.

[MacTigger]

Thanks again.

While you are here, could you remind me of where the custodial parent's income goes?

Because I didn't have mom's income figures when I did his return, I put in a guess when going through TT, but now I cannot find the place to go back and put in the exact amount.

Mac

[DaveF1006]

To clarify, are you filing a return strictly in the son's name because if not, this type of income needs to be reported on his own return claiming he is a dependent of someone else. In filing his own return, there is not an area in the return that asks for the custodial parent's income. Please read this Turbo Tax article for more information.

If you are trying to file a kiddie tax return, you can only report things like interest, dividends or capital gains. For an inherited IRA, a separate return would need to be filed in his name and reported that he is a dependent of someone else. Please read the linked article I referenced in the last paragraph and read Additional election requirements for the child.

Now if you are referring to the the person who died and is leaving this inheritance, this is reported by going to federal> Wages and Income>Retirement Plans and Social Security>IRA  401 k) Pension Plan Withdrawals to edit your 1099R. Then there is a section after the 1099R entry that you will check that this is an inherited IRA.  The next screen asks for the name of the person who is deceased and the year they died. Then complete the rest of the section including the section that addresses the RMD distribution.

{Edited 02/28/23} 1:36 PM PST} @MacTigger

[SteamTrain]

@DaveF1006 

He might be asking about the custodial parent's income for the calculation of the Kiddie tax...not sure where that is entered in the software...assuming that it applies to this particular dependent's tax return.

[MacTigger]

Folks,

Thanks.

So, it looks like, if my son has to take an RMD each year, then he cannot be listed as a dependent on his mom's return.

Is that right?

Mac

[JulieS]

No, as long as he is receiving more than half of his support from his parent, he can be claimed as a dependent. 

The issue you are running into is that he has enough unearned income to be subject to the "kiddie tax". That is a special calculation to make sure that the child's income is taxed at the same rate as the parent's income. Click here to learn more about this tax. 

[MacTigger]

I see.

So, maybe - that - (the kiddie tax) is why I was prompted (somewhere along the line) for his mom's income?  (which I can  no longer find or adjust in TT)

Mac

[ThomasM125]

Yes, you need the parent's income as the kiddie tax rate is based on their marginal federal tax rate. @ MacTigger

[MacTigger]

Thomas,

Would you by any chance know where in TT (app on an iMac) the parent's income is listed, as I need to find that and adjust it.

Mac

[RobertB4444]

If you go to the Wages and Income section of TurboTax and scroll all the way down to 'Less Common Income' there is a selection there for 'Child's Income'.  That is where you will enter all of the parent's information.

@MacTigger