Hi there,
I am not a tax expert but I have found my California state tax calculations in pralana online to be way off because they are using federal AGI as the basis. It would be great if you could change this to something else like federal taxable income. Or how about allowing users to make that change themselves? None of my deductions (which are almost the same as federal deductions for me - other than state tax is not deductible!) are deducted!
Lloyd
Thank you for asking about this. First, our general caveat on the top of the Tax Forms page:
Pralana's Tax Forms show how Pralana approximates future federal, state and local taxes. Pralana does not handle all provisions of the federal or state tax codes. We welcome suggestions for improving these approximations, within reason, as feature requests.
That said, we do try to come close by adding custom coding for certain states which I just did for Wisconsin.
The CA individual tax form 540 shows that CA taxable income is based on Federal AGI with some subtractions and additions.
13 Enter federal adjusted gross income from federal Form 1040 or 1040-SR, line 11
14 California adjustments – subtractions. Enter the amount from Schedule CA (540), Part I, line 27, column B
15 Subtract line 14 from line 13. If less than zero, enter the result in parentheses. See instructions
16 California adjustments – additions. Enter the amount from Schedule CA (540),Part I, line 27, column C
I will review CA's additions and subtractions to Federal AGI in the coming week. I need to make some changes for MD and MO, also.
Please note: We use the Feedback to track requests and there is a special category for 'State Taxes'. These requests are stored in a database which we use for tracking status and providing updates to the requestor. I will create one for this review/change to CA state tax calcs (but I will be the requestor).
Thanks for looking into it.
@lloydlloydus-com Thank you again for bringing this up.
Tonight's release will implement a change for CA (and a few other states) to assume the greater of the state standard deduction or state itemized deductions. CA, like many states, bases their itemized deductions on Federal Schedule A with adjustments that vary by state. These adjustments include all sorts of things, but typically exclude the deduction for state and local taxes (SALT). I reviewed the CA itemized deduction adjustments and they are, except for SALT, various oddball things that we will not implement (College athletic seating rights, Interest on loans from utility companies, etc).
