New Car Interest Deduction-Turbotax Calculation Error STILL

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I know this had been reported before, but Turbotax clearly has no desire to fix this

Here is another example.

Background:

Using Turbotax Online

This is an ammedended return as the new car interest deduction was not part of the initial questionaire and I forgot to add it.

My findings:

Like for many, the deduction is not calculating properly. So I played with my numbers and found the issue.

1) My Adjusted gross income is $112,700 Single

2) My actual interest was just $508 and Turbo tax said $0 interest deduction on this amount (WRONG!)

3) So I moved my interest up to to $2,601 and it said $1 interest deduction.

4) I also moved my interest up to $12,000 and it said a $7,400 interest deduction.

So what does this tell us:

As my income is $12,700 over the $100,000 limit for the full $10,000 deduction, the max deduction should be lowered by $2,600 or $200 for every $1,000 over the limit, ($200 * 13).

This would mean my maximum deduction is $7,400 ($10,000-$2,600).

When I enter an obscenly high interest amount, Turbo tax gets the top end correct as they cap my deduction at $7,400

But on the low end, they are also deducting the amount for the deduction itself. Thus if I say my interest was $2,601, I end up with a $1 deduction.

Turbotax needs to fix this ASAP. I tried to use online chat but the person had no answer for this.

TurboTax Deluxe Online

RogerD1

Alumni - Intuit

TurboTax is calculating the correct deduction based on Schedule 1-A. In your case, any interest that was paid by you that was below $2600, would be excluded from the deduction.

If we look at Schedule 1-A, Part IV that calculates the car loan interest deduction, we can see how this calculation plays out for you:

Line 23 is the total amount of interest paid - in your case $508
Line 24 is the smaller of line 23 or $10,000 - in your case $508
Line 25 is the amount from line 3 or the modified adjusted gross income - $112,700
Line 26 is $100,000 or $200,000 for Married filing jointly - for you this would be $100,000 (this assumes you are not married filing jointly)
Line 27 is line 25 minus line 26 - or $12,700 for you
Line 28 is divide line 27 by $1,000 and round it up to the next whole number - that would be 12.7 rounded up to 13
Line 29 is multiply line 28 by $200 - for you that is $2600
Line 30 is the qualified vehicle loan interest deduction and says to subtract line 29 from line 24. If zero or less, enter zero - for you this would be $508-$2600 - since that is less than zero, then line 30 is zero.

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