Montana standard deduction overwriting desired itemized deductions

[trbundy]

I have filled in all my itemized deductions on my Federal forms in TurboTax desktop even though a file my Federal taxes with the standard deduction.   When I go to work on my Montana State taxes, I specify that I want itemized deductions.   I go through all the forms and come up with itemized deductions that are much higher than the standard deduction.   Turbo tax is ignoring my itemized deductions and is giving me the standard deduction on Form 2.   The itemized deductions listed on page 7 are correct, but they don't post to line 15 on Form 2.  I am using the status of married but filing separately on the same form and I have allocated all income and deductions properly.

[maglib]

@trbundy In the Montana section, you will see a screen called "Itemized Deductions." Tap Yes to Do you want to itemize deductions on your 20XX Montana return?

When you and your spouse file, you must both use the standard deduction or itemize deductions. You cannot use two different methods. If one spouse itemizes, the other must itemize as well. As many do MFS, this often causes confusion.

Tax advice for Montana from laser1040:

Montana Tax Tips

Montana Tax Tips

• Most Montana taxpayers should itemize on their state tax return. The federal withheld is often already more than the standard so the rest of the deductions are all extra tax refund dollars.
• Married couples both working should often file separate on Montana even though they file joint on the federal. Tax deductions with the exception of taxes and insurance withheld or job expense can be claimed by the taxpayer they benefit the most.
• Married couples with investment income that is over $2500, especially if social security is involved should check to see if it is cheaper for them to file separately on Montana even though they file the federal jointly.
• Handicapped children are allowed an extra exemption on Montana for the parents. Dependent students can also be claimed on Montana even if they have not been claimed on the federal by the parents.
• Montana first time home buyers can deduct their entire down payments on a house if they have planned ahead and opened a first time home buyers account prior to the closing on their home.
• The Montana college savings accounts can save up to $330 state tax. This account should be opened at least 4 years before the student is ready to go to college and can later be transferred to other family members.
• If you are a wealthy taxpayer a planned gift is perhaps the best annuity investment you can make because of liberal tax credits in Montana. To know if this would benefit you would need to consult your accountant.
• Montana medical savings accounts can save up to $330 per taxpayer. Anyone can open these accounts even if they have low deductible health insurance. Call Laser 1040 for details.
• New rules apply this year for Foster children. Both federal and Montana rules have changed. Foster children must be closely related to you or placed in your home by a bona fide agency.

[trbundy]

I did select YES to the question on whether I wanted to itemize deductions on my Montana 2023 return.   TurboTax led me through all the itemized deduction forms.   It created a perfectly good page 7 showing all my itemized deductions split between my wife and I.   It just did not move those results to line 15 on Form 2.   

[maglib]

did you try going through the interview again? you are sure that both of your are set to iitemized. Do you have a Montana state tax liability still? Which version of Turbotax are you using?
go to the state tab section in your return. Scroll through the interview questions until you reach a screen asking if you wish to take itemized deductions. Here you will say yes and the federal itemized deductions you entered will populate into your Montana return.
Now your itemized deduction amounts, including state taxes that were withheld from your W2 will now appear on line 15 in Form 2.

Sign out and sign back in.
If this doesn't work i will check with experts.

[trbundy]

I logged off of my desktop TurboTax Deluxe for MAC and logged back in.   I entered all my deductions when filling in the Federal forms.   I went through the interview process again for Montana state return.   I answered YES when asked if I want to itemize deductions. Both of us are set for itemizing on the state return.  The forms ask me to allocate the itemized deductions between myself and my spouse.  I still have a Montana State tax liability.   Interesting when I complete the interview for the state, TurboTax does not show me how much I saved by itemizing my deductions versus using the standard deduction.   When I go to FORMS to see how TurboTax is filling in the actual forms, it shows a perfectly filled in page 7 which is for itemized deductions.   For both by spouse and myself, the itemized deduction total are a few thousand higher than the standard deductions, but TurboTax does not populate line 15 on Form 2 to show itemized deductions with the correct amount.   It fills in the standard deduction amount.   Thanks for your help.   I am stumped and I have used TurboTax for 11 years with no problems on my state tax returns.

[maglib]

another quick question. Have you updated your software fully?

[trbundy]

Yes, I have updated my TurboTax software yesterday right before I started using it for completing my returns.

[maglib]

I posted to moderators and other experts this post. and hopefully someone will chime in.

Did you Save your FEDERAL return with standard deductions and use it to e-file your fed.
Then save it as a new return where you set the federal to itemized? That may also work. TT will allow you still to e-file state once the original fed is e-filed although separated.
Did you complete the whole state interview.

[trbundy]

Yes, I completed the whole state interview.   I actually filed both my Federal and State returns electronically.   I got to thinking that something was wrong and found the standard deduction amount on my state return which is an error.   I will try setting my Federal to Itemized, save the file, and start the state return over again.   I am in a situation where I will need to file an amended return.   I won't be able to test your suggested fix for a couple of hours.   Thanks for your help.

[maglib]

Save the return as test. just change the fed to itemized, you won't have to go through whole interview over that way. Delete it if it doesn't work.
There is a known issue with another state so possibly similar that is being worked on.
Hopefully a moderator chimes in soon.

[maglib]

Another possibility as nobody yet chimed in: You already filed. At this point you would have to amend the return and maybe that is why it won't let you change it since it was accepted. The system knows it was accepted.

[SuziM]

Greetings! 

  Thank you for reaching out and sharing your experience.  Since it seems we’ve exhausted any known troubleshooting, we would like to investigate this issue further.  If you’re willing, we would like to ask if you could provide a Diagnostic File of your return.  This copy will be purged of all personally identifiable information.  If you are willing, please follow the instructions provided below to get us the information we need. 

TurboTax Desktop  

1. Open your return. ​ 
2. Click “Online” and select "Send Tax File to Agent". ​ 
3. This will generate a message that a diagnostic copy will be created. Click “OK”. The tax file will then be sanitized and sent to us. This action will generate a Token Number  
4. Please respond directly to this message and provide the Token Number that was generated.  

[trbundy · Accepted solution]

Thanks for all your help.  I got my problem solved and filed an amended MT state return.

[maglib]

@trbundy  glad it worked out. Can I ask how you fixed it in case it happens to someone else?

[trbundy · Accepted solution]

I basically started over.   I had to do that in order to be able to make changes to the MT state return which I had already filed in order to produce the amended version.   I believe that it points to user error on my part during my initial interview session for the state return.  I still don't see how that happened as I am a seasoned TurboTax user.   I also do not understand how I was able see the form for MT itemized deductions filled in on the underlying forms and yet the itemized deduction total was not recorded with a check mark on Form 2.