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Old 12-31-2013, 03:36 PM
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completing a CA 540X

I'm doing a CA 540X to fix an omitted 2010 to 2011 tax loss carryover. I've updated Turbotax and have the amended 540 which will increase my refund substantially.

On the 540X, lines 2, a thru d for CA adjustments, the instructions say:

"On line 2a through line 2e, show adjustments to your federal AGI as negative or positive amounts based on differences between California and federal law."

I don't get how to determine if positive or negative.

On the original 540, there are 2 adjustment numbers: subtractions and additions. the subtractions happen to exactly equal my SS benefit. The original addition was a much bigger number, the amended number is $5. However I do it, I don't see the 540X numbers matching those on either the original 540 or the amended one.

Any suggestions?

Thanks.



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Old 01-01-2014, 03:47 AM
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Quote:
Originally Posted by Rick View Post
I'm doing a CA 540X to fix an omitted 2010 to 2011 tax loss carryover. I've updated Turbotax and have the amended 540 which will increase my refund substantially.

On the 540X, lines 2, a thru d for CA adjustments, the instructions say:

"On line 2a through line 2e, show adjustments to your federal AGI as negative or positive amounts based on differences between California and federal law."

I don't get how to determine if positive or negative.

On the original 540, there are 2 adjustment numbers: subtractions and additions. the subtractions happen to exactly equal my SS benefit. The original addition was a much bigger number, the amended number is $5. However I do it, I don't see the 540X numbers matching those on either the original 540 or the amended one.

Any suggestions?

Thanks.

as an illustration, say, to Compute California AGI by applying adjustments,the starting point in computing California income tax is the Federal Adjusted Gross Income (AGI). California individual tax law generally conforms to Federal tax law, but there are situations where they differ. When differences occur, an adjustment is necessary to convert Federal individual AGI into California individual AGI. These adjustments to Federal AGI can be either positive or negative. The terms “positive and negative” are sometimes confusing when learning this concept so another way to think of the adjustments as increases or decreases to AGI—Federal AGI. There are two types of positive adjustments, which are added back to (increasing) Federal AGI to arrive at California AGI: Items that are income for California taxation, but are not income for Federal taxation. A ssume that you are a California resident who owns bonds issued by the State of Colorado. The bonds pay interest of $7,500 in the current year. your Federal AGI is $66,000. Since Federal law does not tax municipal bond interest, the $7,500 is not included in the $66,000 Federal AGI. California, however, only exempts municipal bond interest on California municipal bonds, so the Colorado interest would be taxable for California. In calculating his California AGI, Joel would have a positive adjustment of $7,500 to his Federal AGI. If this were Joel’s only adjustment, his California AGI would be $73,500 ($66,000 + $7,500). This adjustment would be shown on Line 8 of California Sch CA (540).i guess you may apply this principle to ca540x also.



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Old 01-01-2014, 05:24 PM
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Originally Posted by Wnhough View Post
as an illustration, say, to Compute California AGI by applying adjustments,the starting point in computing California income tax is the Federal Adjusted Gross Income (AGI). California individual tax law generally conforms to Federal tax law, but there are situations where they differ. When differences occur, an adjustment is necessary to convert Federal individual AGI into California individual AGI. These adjustments to Federal AGI can be either positive or negative. The terms “positive and negative” are sometimes confusing when learning this concept so another way to think of the adjustments as increases or decreases to AGI—Federal AGI. There are two types of positive adjustments, which are added back to (increasing) Federal AGI to arrive at California AGI: Items that are income for California taxation, but are not income for Federal taxation. A ssume that you are a California resident who owns bonds issued by the State of Colorado. The bonds pay interest of $7,500 in the current year. your Federal AGI is $66,000. Since Federal law does not tax municipal bond interest, the $7,500 is not included in the $66,000 Federal AGI. California, however, only exempts municipal bond interest on California municipal bonds, so the Colorado interest would be taxable for California. In calculating his California AGI, Joel would have a positive adjustment of $7,500 to his Federal AGI. If this were Joel’s only adjustment, his California AGI would be $73,500 ($66,000 + $7,500). This adjustment would be shown on Line 8 of California Sch CA (540).i guess you may apply this principle to ca540x also.
OK, that helps, I'm getting closer. I put the numbers in Excel so I can do trial and error. If I set CA 540x line 2a (CA nontaxable income) to zero vs the $800 on my fed return (pure CA munis) AND set line 2b to zero (state tax refund), then I get exactly the line 15 CA540 AGI on the state form which is adjusted for +/- adjustments. This tells me that the line 540x line 2b refund# is not the 2011 refund, but the 2010 refund that would have been an offset had it not been zero. correct? I thought that refund was my 2011 refund that I'm trying increase in the first place, so I had plugged in that number.

So, guess the question is: 1) leave 540x lines 2a, 2b blank to get the AGI to match my original 540 form line 17? I use Turbotax for my taxes.

thanks for the help!



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Old 01-01-2014, 05:45 PM
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Quote:
Originally Posted by Wnhough View Post
as an illustration, say, to Compute California AGI by applying adjustments,the starting point in computing California income tax is the Federal Adjusted Gross Income (AGI). California individual tax law generally conforms to Federal tax law, but there are situations where they differ. When differences occur, an adjustment is necessary to convert Federal individual AGI into California individual AGI. These adjustments to Federal AGI can be either positive or negative. The terms “positive and negative” are sometimes confusing when learning this concept so another way to think of the adjustments as increases or decreases to AGI—Federal AGI. There are two types of positive adjustments, which are added back to (increasing) Federal AGI to arrive at California AGI: Items that are income for California taxation, but are not income for Federal taxation. A ssume that you are a California resident who owns bonds issued by the State of Colorado. The bonds pay interest of $7,500 in the current year. your Federal AGI is $66,000. Since Federal law does not tax municipal bond interest, the $7,500 is not included in the $66,000 Federal AGI. California, however, only exempts municipal bond interest on California municipal bonds, so the Colorado interest would be taxable for California. In calculating his California AGI, Joel would have a positive adjustment of $7,500 to his Federal AGI. If this were Joel’s only adjustment, his California AGI would be $73,500 ($66,000 + $7,500). This adjustment would be shown on Line 8 of California Sch CA (540).i guess you may apply this principle to ca540x also.
Thanks for the help, I'm getting closer I think. I find if I leave 540x lines 2a (nontax interest) and 2b (refund) blank, then I exactly match the CA AGI on the original form 540. However, I DID have a refund for 2010 and 11. it's the 2011 refund I'm trying to increase with this amended return.

Any idea why filling in the 2011 refund and $8K in CA muni income throws the numbers off vs. the original form 540 AGI?

What if I leave them blank and since I'm including supporting documentation in the form of the original and amended 540 and other docs to show the paper trail, if I'm wrong on the 540x, they'd correct it anyway, right?



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Old 01-02-2014, 02:16 AM
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I am not familiar with the return software; i guess you can contact a computer software vendor for more accurate help;



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Old 01-02-2014, 01:47 PM
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Originally Posted by Wnhough View Post
I am not familiar with the return software; i guess you can contact a computer software vendor for more accurate help;
I decided to leave lines 540x 2a, b blank since it allows all subsequent numbers to match the original return. Am ready to mail now. If there's an error, I'm sure they will correct it as they have in the past.

Thanks for the help, great service.



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