Rent Out a Room: Schedule A vs Schedule E

[Anonymous]

I rent out a room (20%) in my house (primary residence,100%). When reviewing the tax return before e-file (TurboTax Premier Online), I notice that the property tax and mortgage interest shows full amount (100%) in the Schedule A Itemized Deductions; the Schedule E shows the portion (20%) that's allocated to rental (I calculated expenses in the Schedule E manually instead having TurboTax calculated it).

Assume the property tax is $5000 and mortgage interest is $1000. Schedule A currently shows $5000 and $1000, while Schedule E shows $1000 and $200 for rental deduction. Should the correct amount for Schedule A be $4000 and $800?

The 8a in schedule A asks "Home mortgage interest and points reported to you on Form 1098." Since it's directly imported from the Form 1098, it shows $1000. Should I manually correct it to $800? So is the 5b "state and local real state taxes", should I manually correct it to $4000?

Thank you!

[Hal_Al · Accepted solution]

Q. Should I manually correct it to $800? So is the 5b "state and local real state taxes", should I manually correct it to $4000?

A. Yes and Yes. 

[Anonymous]

Thank you for your advice!

[lyu]

On Schedule A, hoping to clarify if "State and local real estate taxes" (box 5b) should be treated the same way as "Home mortgage interest and points reported on Form 1098" (box 8a)

For box 8a - it seems like TurboTax automatically filled it in with the primary residence portion (in this example 80%) so no question there.

However, for box 5b - TurboTax autofilled this with 100% of property taxes. When I double click into the Schedule A worksheet to see how this was done, under "2 State and local real estate taxes", it contains two lines

a - "Real estate taxes paid on principal residence not entered on Form 1098": this is filled with 20% of property taxes, seems to have been imported from Schedule E

d - "Principle residence": the remaining 80% that's automatically carried over to schedule A from Schedule E.

Does this mean I need to manually remove 2a from the Schedule A worksheet? Why did TurboTax add the 20% back to Schedule A only for property taxes and not mortgage interest? 

[Hal_Al]

I don't think anybody, here, is going to be able to tell you "why".  In your case, it's clear what the correct amount is. If TT isn't giving you that, you have to enter it manually. 

[PattiF]

Yes, you will need to manually enter the correct amount of state and local real estate taxes for the rental on Schedule E and Schedule A. When reporting the rental of a room in your house, it's best to double check the calculations of TurboTax and adjust accordingly if needed.

@lyu