Total Income: Step-by-Step vs. Form 1040 still not correct

[TerryRichmond]

In a prior thread titled "Total Income: Step-by-Step vs. Form 1040" (now closed and marked "Solved"), you explained that the Total Income displayed in "Let's Review Your Numbers" differs from Line 9 on Form 1040 because:

"Total income" in the summary is the total of all items of income entered whether taxable or not.  Form 1040 line 9 only includes the taxable portion of your total income (before subtracting any deductions)."

I understand this and it makes sense.  However, the "Total Income" in the summary is less than the total of the actual income items I have entered into TurboTax. All the entries are correct on Form 1040 and Line 9 is correct (so all tax calculations are correct),  but the "Total Income" summary does not accurately reflect the total of the entered income items.

[DawnC]

The summary in TurboTax includes everything you entered, taxable or not.   Is your tax return correct?   Is there anything TurboTax erroneously added or left out on your tax return?  

[TerryRichmond]

What I am trying to point out is that there are inconsistencies with amounts that have actually been entered and some of the summary/history screens/forms.

1. The tax return appears to be correct. Form 1040 appears to be correct.

2. The "Your Total Income" amount displayed on the EasyStep Federal Taxes tab, Federal Review sub-tab summary screen does not "includes everything you entered, taxable or not." as stated. In my case, the amount shown for "Your Total Income" is LESS than what was actually entered. The amount it is off does not match any individual or combination of income entries. No idea how the amount was calculated.

3. To add more confusion, the Tax History Report shows "Total Income" as the amount from Line 9 (total income) or Line 11 (adjusted gross income) of Form 1040.  The inconsistency here is that Line 9 or 11 are adjusted after non-taxable income has been deducted (such as only including the taxable amount of Social Security benefits vs. the entire amount of SS benefits, and also adjusted for Capital Losses in my case).

In summary, 1) the actual amount of income entered, 2) the Total Income on the Federal Review summary screen, and 3) the Total Income on the Tax History Report all have different values. The confusion comes from a) all these fields being labeled as "Total Income", b) an unpredicted amount being shown on the Federal Review summary screen, and  c) "The summary in TurboTax includes everything you entered, taxable or not.", when in fact it does not.

Again, calculations on Form 1040 appear to be correct.

Hope this clarifies the concern.

[TerryRichmond · Accepted solution]

I think I have figured out how the "Your Total Income" as reported by Step-by-Step in "Let's Review Your Numbers" is calculated.  I’m not 100% certain this correct since there are some Lines on Form 1040 where I don’t have entries, but the best I can tell this should be really close if not spot on.

“Your Total Income” is calculated by adding up the following lines from Form 1040:

Line 1i - Nontaxable combat pay election

Line 1z - total of Lines 1a through 1h

Line 2a - Tax-except interest

Line 2b - Taxable interest

Line 3a - Qualified dividends

Line 3b - Ordinary dividends

The larger amount of Line 4a OR Line 4b (not both) - IRA Distributions

The larger amount of Line 5a OR Line 5b (not both) - Pensions and annuities 

The larger amount of Line 6a OR Line 6b (not both) - Social security benefits 

Line 7 - Capital gain or loss

Line 8 - Other income from Schedule 1

"Your Total Income" as reported by Step-by-Step in "Let's Review Your Numbers" will not match Line 9 on Form 1040 if you have any tax-except income.

[ThomasCKo]

As Terry points out, the TurboTax definition and listing of step by step 'total income' page effectively is wrong.  Took me a long time to calculate where the 'missing' income was hidden from 'total' ... thought I had entered something incorrectly.  Would be much clearer if TT SIMPLY indicated on that page that it's actually total income  - less xx yy zz.   Was going to offer my 'discovery' when I was searching 'the community' for answers to TurboTax anomalies (this one and several other issues). 

I feel as if we are all beta testers for TT and supplement as free support/help, where TT can review community comments and correct system errors in the daily updates once verified.   Indeed, I too am glad that at least the 1040 appears to total correctly (taxable total income, AGI,  etc), but the 'step by step 'total income' figure before sending file, is confusing and effectively wrong if you are trying to determine what your 'real total income' was (a simple and important element for many people.)

Soon the IRS will allow direct filing for free to a wider income range of filers (albeit for simpler filings).  Maybe then TT will make more effort on their products as value to help support / clarify more confusing elements in tax law and calculation figures to justify paying for their service.  Expecting the IRS to actually help explaining IRS rules in their system will be tough 🙂   Better yet, maybe that will actually help prompt some simplification of tax laws.

[ThomasCKo]

Dawn - pls see my rpy further below.  TT erroneously excluded my certain amounts from 'total income' (there may be other elements too).  NOTE issue doesn't appear to negatively impact 1040 / calcs, but the figures appear 'incorrect' on the TT page while doing a final review before filing on the STEP BY STEP REVIEW of TOTAL INCOME.   Its not necessarily wrong, but confusing by definition.  Your programmers may wish to add a clarifying comment regarding that 'total' on that page, since most everyone does the 'final review' and those total figures will not align with other 'totals' elsewhere on TT screens / printouts.  I'm definitely not a tax expert, but I hope this helps the cause for others trying to locate same confusing issue .... 

[MayaD]

We would like to take a deeper dive into this message to assist you.  In order to do this, it would be helpful to have a TurboTax ".tax2023" file that is experiencing this issue. You can send us a “diagnostic” file that has your “numbers” but not your personal information.

To do that:

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

@ThomasCKo

[MayaD]

I tested the issue in TurboTax Desktop and, as mentioned earlier the difference that you are seeing between the Total income on the step by step screen and form 1040 or Tax history in Forms mode is coming from non-taxable income like non-taxable social security and tax-exempt interest. 

[TerryRichmond]

MayaD,

As mentioned in my last post above, in my particular case I figured out the difference.  Not sure if ThomasCKo's issue has also been resolved. I do support ThomasCKo's suggestion of adding a clarifying comment or explanation why the TOTAL INCOME on the STEP BY STEP REVIEW page may not match total income figures elsewhere on other TurboTax screens / printouts (e.g. Form 1040 Line 9 and Tax History).

Thank you for testing this.

Terry Richmond

[gulsheenk]

@MayaD , @DawnC : in my case, Federal Taxes --> Federal Review --> Detailed Tax Breakdown:  Total Income is higher than the total income under Federal Taxes --> Wages & income 

Wages, Interest & Dividend sub-total matches. But "Other Income" is higher by $8,400 in Federal review.  Please advise what needs to be updated/checked.  I have double / triple checked all entries  under Federal Taxes --> Wages & income and I have entries only for the following:

i) Investment Income

ii) Retirement Plans and Social Security

iii) Rental Properties and Royalties - negative this year because of out of pocket expenses from water damage from a pipe burst. 

Best!

Gulsheen