Turbo Tax computing wrong ACA subsidies.

[Anita]

Anita, how are you defining MAGI? MAGI is your income BEFORE you subtract your standard deduction amount.

The reason I ask.... I took the time to create a "pretend" income tax return using online TurboTax. I was trying to mimic what you have done using the exact tool you are using. I plugged in the numbers from your 1095-A. I plugged in straight W-2 income to achieve my MAGI since I don't really know what your income sources are, but that shouldn't matter to calculate the impact of ACA subsidies on the taxes.

What I found is that in order to get the return to show I owed about $1600 due to an ACA adjustment, I had to enter MAGI income of $53,922. If I enter MAGI income of $28892, I don't see any increase in my taxes due to ACA subsidies.

By any chance is the full income between you and your spouse actually something like $53,922 and you are thinking that your MAGI is $53,922 - $25,100 (your standard deduction) = $28,822?

MAGI would actually be $53,922. MAGI is not the same thing as Taxable Income.

Interesting...and I think you have hit the nail on the head. I don't know my MAGI because TT just reveals my AGI. My husband had a stroke and gets $28,446 disability. If you add that total amount of disability to my total W2's...yes, our total income is about $53,900. But of course...our taxable AGI is $28822 because most of the disability is not taxable.
Do you think that the total disability income is computed as MAGI? From what I have read only the taxable income from SSDA is counted towards AGI?
Let me give you one more bit of info. I just entered all of my data into TaxAct and it computed I owed the IRS back $422. Again...don't know how the hell this was computed but it's way off from TT. Weird...huh?
Thanks for your insight. I will do some more reading how MAGI is calculated but TT and TaxAct can't even agree.

 

[PaunchyPirate]

Here's a good list of what is included in MAGI.

https://www.healthcare.gov/income-and-household-information/income/#magi

It says both Social Security and Social Security Disability Income (SSDI) are included in your MAGI. Supplemental Security Income (SSI) is not. I don't know the difference between the two.

Take note, something can be in the MAGI but not in the AGI. AGI doesn't include the non-taxable Social Security benefits, but MAGI adds them back in. MAGI is never really shown to you on a standard tax form (which is why TT isn't showing it to you). It is a value that is derived from your tax form and used in various calculations like the ACA subsidy.

To me, it looks like you entered the wrong MAGI at the time you let the ACA exchange calculate your subsidy and now TT is telling you what must be paid back.

I have no idea what is going on with TaxAct.

 

[Anita]

Here's a good list of what is included in MAGI.

https://www.healthcare.gov/income-and-household-information/income/#magi

It says both Social Security and Social Security Disability Income (SSDI) are included in your MAGI. Supplemental Security Income (SSI) is not. I don't know the difference between the two.

Take note, something can be in the MAGI but not in the AGI. AGI doesn't include the non-taxable Social Security benefits, but MAGI adds them back in. MAGI is never really shown to you on a standard tax form (which is why TT isn't showing it to you). It is a value that is derived from your tax form and used in various calculations like the ACA subsidy.

To me, it looks like you entered the wrong MAGI at the time you let the ACA exchange calculate your subsidy and now TT is telling you what must be paid back.

I have not idea what is going on with TaxAct.

You have solved it and showed me where i made an error. I had no idea that untaxed SSDA counted as MAGI. I saw SSDI but didnt see SSDA. Thank you very much.
Wonder if should go with TaxActs computations. They are saying my MAGI is less with the exact same numbers.��

 

[MisterBill]

My entire point is TurboTax Tax has computed my subsidies wrong at $15951. That's the problem.

So did you report the problem to Intuit? It's early in the season, there are going to be bugs. It would be much more productive to report it to them and/or post on their message board than posting it here. Posting here isn't going to get the problem fixed.

Or did the previous post clarify things and it's not actually a TT bug?

 

[casole]

I hope the OP called Turbo Tax back and explained it was not a bug (at least based on my last reading of the MAGI explanation) and they could call off the research. I've been on the receiving end of folks insisting something was wrong on "our" end, escalating matters and spending an inordinate amount of time time during an already hellish tax season to find out it was user error.

 

[RetiredAndLovingIt]

I'm betting not

 

[ncbill]

Interesting...and I think you have hit the nail on the head. I don't know my MAGI because TT just reveals my AGI. My husband had a stroke and gets $28,446 disability. If you add that total amount of disability to my total W2's...yes, our total income is about $53,900. But of course...our taxable AGI is $28822 because most of the disability is not taxable.
Do you think that the total disability income is computed as MAGI? From what I have read only the taxable income from SSDA is counted towards AGI?
Let me give you one more bit of info. I just entered all of my data into TaxAct and it computed I owed the IRS back $422. Again...don't know how the hell this was computed but it's way off from TT. Weird...huh?
Thanks for your insight. I will do some more reading how MAGI is calculated but TT and TaxAct can't even agree.

Is that SS disability (countable in mAGI) or disability from a private plan where premiums paid were after-tax?
(e.g. via an employer or individual long-term disability insurance policy)

IIRC, the latter would not count for mAGI.

 

[isisdave]

Some side comments:

1. I've been using TT since its birth; the first year they offered a California return I had serial number 00004. I've never seen it make a mistake that wasn't corrected by mid February. In the beginning, there was ONLY forms mode, and that's what I always use, because it takes too long to navigate with the other mode.

2. On the desktop version, you can always Override a value if you're certain you're right and it's wrong. Right-click and select Override. Or right-click, select Data Source, and be led to the source of your problem. Overrides show up as Errors and will prompt you before you file, and, I think, print.

And a question: if you buy from Amazon and think it's mistaken, can you send it back for refund/credit?

 

[meleana]

I have had Tax Act make an error in my tax returns and when I discovered it I had to have 3 years amended ( I lost a 4th year due to the statute of limitations). I had a CPA do them for me because I couldn’t figure out how to get Tax Act to do it correctly. Definitely an error on the program. This resulted in quite a bit of a refund.

Last year our CPA’s new software messed up our tax returns ( according to him it was the new software) with two big errors. I feel he should have caught them, but of course he relies on the software to check rather than his brain, just like many of the rest of us would.

I even argued with him about it and had to show him proof they were errors. One involved filing the form 8962 for the ACA subsidies I received upfront. I will admit the Biden administration made a few last minute changes last year, so it was confusing, but I’m not a CPA charging $350 to do a fairly simple return!

Moral of the story- and I always used to do our returns on Tax Act- use your brain and don’t rely solely on the program. And if you pay someone to do your returns, review them thoroughly before they are submitted.

(PS I caught it immediately but he had already filed the return so had to do an amended tree return and this resulted in a bigger refund but it took a long time to get.)

 

[MisterBill]

And a question: if you buy from Amazon and think it's mistaken, can you send it back for refund/credit?

Satisfaction Guarantee/ 60-Day Money Back Guarantee: If you're not completely satisfied with TurboTax Desktop, go to refundrequest.intuit.com within 60 days of purchase and follow the process listed to submit a refund request. You must return this product using your license code or order number and dated receipt.

https://turbotax.intuit.com/corp/cd-download/guarantees/