Turbotax is incorrectly calculating my federal tax refund for 2020

[smac2]

Married, filing jointly. In 2019, we owed roughly $2000 in federal tax (12% bracket). In 2020, we had the same income (mostly interest + dividend income) but now Turbotax says we only owe $350 total. 

I made quarterly estimated tax payments in 2020 and Turbotax is giving us a refund of $1688. That is too much I think.  When I do the federal review, Turbotax does not find any errors.

I am using the windows CD version of Premier.

Any suggestions, anyone?

[VolvoGirl]

Since you have the Desktop program click on Forms in the upper right and look around.  Compare 2020 to 2019 and try to find the differences.  Is it giving you the Recovery Rebate Credit on 1040 line 30?  Did you get any of the Stimulus checks?  Did you enter the amounts you already got on the screen with 2 boxes?  

[smac2]

I checked line 30 and there is nothing entered. We did receive the stimulus checks and I entered the amounts in Turbo.

[VolvoGirl · Accepted solution]

Then you have to compare 2019 to 2020 line by line and see what is different.  Did one of you turn 65 and get a higher standard deduction?  Do you get Social Security?  Did you have a lot more capital gains this year?  They are taxed at a lower rate.  Check 1040 line 7.  

[smac2]

Thanks for the suggestions. I figured it out. The key was I didn't realize that qualified dividends are taxed as capital gains, so 0% in our case.

[croz1950]

Turbotax has some major problems in calculating the Line 30 credit. To make matters they refuse to admit the problem is in their software. It is not user error as they have tried to gently tell me...Shame on the industry leader who can do no wrong. Turbotax calculated my tax with a $668 error.

[croz1950]

VolvoGirl said...

Since you have the Desktop program click on Forms in the upper right and look around. Compare 2020 to 2019 and try to find the differences. Is it giving you the Recovery Rebate Credit on 1040 line 30? Did you get any of the Stimulus checks? Did you enter the amounts you already got on the screen with 2 boxes?

My response:

To the questions: Yes, Yes, and Yes. TT calculated my stimulus to be much lower than I received...then promptly granted me a credit of $668 on line 30 to which I am not entitled. (I did not catch it because of my blind faith in TurboTax and their guarantee) Now the IRS wants the $668 + Interest back. I don't blame the IRS...the fault is with TurboTax. And the folks at TurboTax have basically said, "not our fault, and not our problem."  I will pay the Tax and the Interest, but I will never trust TurboTax again.