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asc · ‎April 12, 2021

Thank you for your answer. However, I don't believe this solves my problem so I would appreciate clarification. I am entering the Tax Exempt Interest from Box 11 on the 1099-Div. Then, as you indicate, the follow-on page gives me an opportunity to split the tax exempt interest between states. However, my understanding is that the by-State splitting on this page represents the relative percentage of each State's bonds within the mutual fund's portfolio, not the amount of tax exempt income earned while living in the State. As you indicate, Maryland then transfers all the tax exempt interest from Other (i.e. non-Maryland states) to my MD income. This also occurs for the other State that I lived in for the first 10 months, so I am being taxed by two states on the income from all States other than MD and the other State. This can't be right, can it? I was expecting TurboTax would provide someplace in each State's step-by-step to split out the non-residence tax-exempt income based on where I was living when I received the income -- just as it does for all other income and separately for Losses/Adjustments. However, there is no such capability that I can find. (Note that I am having a similar problem with Income from US Obligations which neither state taxes. These are entered in total as part of the Federal Income 1099-DIV step-by-step. The MD step-by-step then has a separate question for Capital Gains from US Obligations for MD which are added to the earlier Income, but there is no TurboTax question in either State to split the US obligations offset between the two States so the total Income offsets show up in both States -- another double-count, even though the income itself is split between the two states. I am going to fix this with a Form Override, but I don't like to do that.) Thanks in advance.

asc · ‎April 10, 2021

Hi. I moved to Maryland on November 1, 2020. TurboTax has me completing two Part-Year returns, and has provided places in each State interview to report non-resident income which it then subtracts from the Maryland Adjusted Gross Income as I expect. However, TurboTax did not provide the same option for non-resident Tax Exempt Income -- it just copied the entire amount from Form 1040 line 2a into Maryland Form 502 line 2, even though only a small fraction of that income (17%) was actually earned while in Maryland. This is a problem since my previous state did not tax any Tax Exempt Income whereas Maryland only excludes Maryland Bonds from taxation. Am I correct that I should only be reporting the Tax Exempt Income earned while a resident of Maryland, and if so, is there anyway to have TurboTax handle this correctly (other than my directly overriding form 502 line 2). Thanks in advance.

asc · ‎March 13, 2021

Hi. You have answered this question for someone who qualifies for a Home Office deduction so your answer says to enter the total internet mount and let Turbotax prorate the amount that can be deducted based on the Home Office percentage. However, in my case I do not have any space in my home that I exclusively use for business so my understanding is that I cannot use the Home Office deduction. Can I still prorate my Internet cost based on the percentage use for my home writing and consulting business relative to personal use? Thanks in advance.

asc · ‎June 7, 2019

Thank you. That is what I have done. I guess I will have to submit revised 8606's for the years 2013-2016 that Turbotax dropped. Is there anyway to do those electronically, or do I have to use paper? One comment -- the interview for Nondeductible Contributions says "Let us know if [name] made and kept track of any nondeductible contributions to [name] traditional IRA from 2016 or prior years. (this is not common). It then says "Most people do not make or track any nondeductible contributions to their IRAs." While I would agree that most people do not MAKE nondeductible contributions to prior year IRAs, I strongly disagree that most people do not TRACK nondeductible contributions. If this is how I lost the prior year reporting then this really needs to be fixed and the language changed.

asc · ‎June 7, 2019

Thank you macuser_22 -- I know you cannot combine basis and they should never be combined, but that is exactly what TurboTax did so it's clearly a bug. I was trying to correct my basis which was zero since TurboTax had dropped reporting the Form 8606s the last few years. I was using TurboTax's interview for non-deductible Traditional IRAs where it displays the Basis it has from the prior year's and asks you to revise it. If you do, it then asks you to provide an explanation in a line-by-line format with associated numbers. I did this and checked the Forms and I now had a new "Blank Form" with my entires. Then I did my Spouse's corrections and was surprised when the explanation entry form already had my entries in it. When I added a new entry for her it got added to the total. Note - that I did not have a 2017 contribution while she did, so she will have a form 8086 but I won't. I would be happy to repeat this error with someone from TurboTax if I could figure out how to reach them (email or phone).

asc · ‎June 7, 2019

I just ran into the same problem described above. TurboTax's handling of Traditional IRA Basis needs to be fixed. I just discovered that they dropped the 8606 from several years even though they created the worksheet. This year I found an interview to enter explanations for the Basis discrepancy, but then they merged both my and my spouse's explanations into one combined basis that adds both out numbers together, even though spouses' IRA Bases should never be combined. And it then gets included this combined mess in the Tax return as a "Blank Form".

asc · ‎June 6, 2019

I am confused by the comment in the last sentence about it being "not an uncommon mistake" to roll a large 401(k) balance into a traditional IRA with a significant basis. While doing so would indeed dilute the percentage of the non-deductible contributions Basis within the aggregate of the now larger traditional IRAs resulting in more taxes having to be paid from the IRAs, wouldn't it identically reduce the balance within the 401(k) and resulting RMD withdrawal subject to taxes at the same time? Since the tax rate and distribution period is the same on both 401(k) withdrawals and on the taxable (i.e. non-Basis) component of IRA withdrawals, the net taxes would be identical whether or not the 401(k) balance had been transferred. The only difference I see is that with 401(k)s you can defer taking the Required Minimum Distribution (RMD) withdrawals (and paying the associated taxes) beyond age 70 1/2 if you are not retired, whereas with IRAs the distributions must start at age 70 1/2 regardless of retirement. So if you have an IRA with a significant basis are not planning to retired until after age 70 1/2, it might make sense to not roll-over 401(k) funds into the IRA so you can minimize the taxes on the IRA RMD withdrawals while you are still working. If I'm not understanding any of the above correctly, please explain. Thank you in advance.

Date Registered	‎June 6, 2019 6:27 AM
Date Last Visited	‎April 23, 2021 12:08 PM
Total Messages Posted	7
Total Cheers Received	1

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