Deductions & credits

Long post but it's a complicated problem. Bear with me.  I"m a smartass and annoyed by this, and I hate posts that are short on detail and impossible to use.  This is for a situation where you want to use itemized deductions but TurboTax uses standard deduction even though it says it's using itemized, and you can't force it to change.

I had this problem also, and my total itemized deductions are just over the standard deduction like others have suggested. No matter how many times I tried to go through the step-by-step process it kept saying it's using Itemized but it keeps delivering Standard. I tried a test where my itemized deductions were a little more than $300 over the standard deduction and it worked properly (and my state tax plummeted). So this is clearly a software failure where it just doesn't work right when your itemized decuctions are within $300 of (over) the standard deduction. This is a ridiculous failure that should have been caught very early (or at least caught at some point ffs).  The easiest fix is to add some "forgotten" cash charitable contributions, but if you don't want to cheat here is how I found to force a workaround.

Background: I'm using the downloaded exe-on-my-PC version of TurboTax Deluxe 2020. Tried repeatedly to use itemized deductions so my state (VA) taxes will use itemized deductions. This is a huge difference and a huge failure for TT. Every time I go through the step by step it says it's using itemized deductions, but it doesn't. Half baked software. I tried editing the Schedule A form - there's a box to force it to use itemized but the checkbox is disabled. Ready to just do this the old way with forms and a pen...but...

I googled a bit and found (a) it's not really a new problem and (b) a solution from 2018. Let me just take a moment to say how disgusted I am with TT for this failure - this is basic software troubleshooting and it should have been fixed long ago.

I have a solution but it's a solution that requires some careful steps. And disclaimer...I have not actually finished everything yet so this may be terrible, terrible advice. But try it.

The basic solution itself is very easy, but the step-by-step process in the 2020 software will undo it if you allow it to.

So here is the secret trick #1.

From wherever you are in the step-by-step process, click on Forms and open the Federal Information Worksheet that appears in the list of Forms on the left. It's named "Info Wks" or something un-findable like that. They couldn't just write it out...

In Part VI of Federal Information Worksheet, the first subsection is called Standard Deduction/Itemized Deductions. Under that there are three checkboxes. Check the first one (look at the others - you might need them but that's not what this post is about). It says something like "Check this box if you are itemizing for state tax or other purposes even though deductions are lower than your standard deduction." Sounds good, huh?

For me, checking that box immediately made everything right - the summary of my deductions now looks correct, and if I look at the forms they are correct. Great, right? Awesome...now jump back to step-by-step and wait for TT to fail again...

You probably wanted to set this checkbox early, and that makes sense. But when you are in step-by-step and you get to the page that tells you which deduction you should use - it breaks your fix. It doesn't matter if you accept what it says or try to change it. For me, it goes back to saying you're using Itemized but it uses Standard. I think this page is the problem (TT are you reading this?).

A little background - the problem page I'm talking about is after you finish entering Deductions and Credits, and you click Done with Deductions, then it does "Let's Check Your Deductions and Credits" and might give you a few comments/warnings. Then is shows "Your 2019 and 2020 Deductions & Credits" - for me this was all zeroes for Itemized (nice comparison tool!). Then click Continue and it reports what it chose for you - in my case it's "We've Chosen Itemized Deductions for you." But it didn't actually do that. It also says "What You're Getting: Federal Itemized Deductions." But it's lying. They spent all their time making this page very clear about what you're getting, but it's not what you're getting. So anyway, now you know where the problem is.

When you click Continue, it all breaks again. Important detail (seriously, TT are you reading this?)...this is the problem...when you click Continue, not only does it change your deduction option, but it also unchecks the box on the Federal Information Worksheet that made everything work correctly. This page telling you how smart TT is and how it figured out what is best...it fails and actually breaks the one thing that you needed it to do, so it's all wrong again.

So here is trick #2.

Now that I'm writing it, this doesn't seem like much of a trick and is kind of obvious in hindsight, but here it is. I recommend you first do the things I said above with the checkbox in the Info Wks, so you see the difference that the checkbox makes and you can do all your work properly. Then you will also see where the problem pops up. Then...

After you pass the problem page and you get to (in my case) the page that says "Other Tax Situation", you can just fix the checkbox again and it seems OK. Go to Forms and go to the Federal Information Worksheet again, and check that box again.  It should switch back to Itemized and everything is OK again. I have not done extensive testing but apparently I've done more than TT has. And if that works and you didn't already, make sure to send TT a message that they need to test and fix stuff before they sell it to you. I've played around with this a little and I think the problem is simply that the one page in step-by-step is wiping that checkbox every time you pass through it.

After fixing the checkbox, I finished a few checks and started my state return and it didn't flip back yet, and my overall bill is nearly $1000 less (Federal is $100 more and State is nearly $1000 less). Thanks for the help TurboTax, for the last time ever. 

That's as far as I got. I spent all day fighting this mess and ran out of time. And of course writing this was time consuming, with all the anger and drinking that had to be done with it. If this turns out to be bad, I'll post about it.  I wanted to get this posted soon and not wait because there were a few people having this problem. 

A super thanks to @Stinkerbellkity who found the magic checkbox back in 2018 (https://ttlc.intuit.com/community/taxes/discussion/re-how-to-force-turbotax-2018-to-itemize-on-feder...).

Good luck.  I hope I didn't break anything.