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Level 1
posted Feb 11, 2020 10:06:23 AM

Why did TurboTax change my MN State return Deduction to an amount LOWER than the Standard Deduction?

On 2/1/2019 I completed a joint MN State return and the Line 4 Deduction was the correct Standard amount $24,400.  When I went to file on 2/11/2019 it changed Line 4 to an amount $4,793 LESS than the Standard Deduction and increased my Tax.  It should only choose to itemize if the deductions are more than the standard.

0 2 1507
2 Replies
Expert Alumni
Feb 11, 2020 11:43:16 AM

Is it possible that you earned more than in a prior year and the deduction is being partially phased out?

 

In Minnesota, the standard deduction begins to phase out as income exceeds $194,650 ($97,325 if you are married and filing a separate return).

 

Source: See Page 3 of this PDF for details on the standard deduction phase out

Level 1
Feb 12, 2020 6:01:53 AM

Thanks for the tip @AlexanderS08 !  I only looked at Schedule M1SA for MN Itemized Deductions, which also references the limit.  However, I needed to look at MN State Form M1 Line Instructions that includes a Worksheet for Line 4 - Standard Deduction LIMITATION.  This explains why TurboTax didn't include MN Schedule M1SA and what is NOW the correct Deduction amount. I will mark this resolved. I still don't know why it wasn't correct the first time with the limitation applied to my Deduction upon 2/1/20 preparation.  It would have been nice to be informed the state return was not complete / ready for filing or notified of the change to my In- Process return.