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Wednesday, January 01, 2014

Completing a CA 540X - Ask TaxGuru

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.

Answers:-

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. Find your answer here Ask TaxGuru - Free online tax services forums.

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