$40k mortgage interest why does TT tell me to take the standard deduction?

[Mark7902]

Bought in 2024, loan $655k, mortgage interest nearly $40k. (Yes high interest.)  Primary home. 

I have some self-employment income but not sure how that is relevant.  I am mostly unsure why I can't deduct the $40k and why TT say to take the standard deduction.  Married, head of household. Max SALT, too. 

[rjs · Accepted solution]

When TurboTax asked whether the loan is secured by a property of yours, did you answer Yes? If the loan is not secured by a home that you own, the interest is not deductible. A mortgage loan is normally secured by the home that the loan was used to purchase.

[Mark7902]

Thank you. I did answer "yes," the mortgage is secured. So I am still puzzled why it won't use the $40k and wants me to use the standard deduction. 

[DoninGA]

If you are using the TurboTax desktop editions click on Forms.  In Forms mode locate the Schedule A on the left side of the screen and click to open the schedule.  What amount is shown on Line 8a?

[rjs]

Well, there are lots of other questions that you could have answered incorrectly. Go through the whole mortgage interest interview again and check all your answers carefully.

There are also a lot of possible variations in mortgage interest situations. We can't go through all the possible variations, but we can try to narrow it down. Is the mortgage on your primary home? Do you have more than one mortgage, on your primary home or any other homes? Did you, or will you, get a Form 1098 for the mortgage interest? Did you enter the 1098 in TurboTax? Is it a seller-financed mortgage? Is it a refinance or a home equity line of credit (HELOC)? Did you use any part of the loan for anything other than to buy the home?

What do you mean by "Married, head of household"? In most cases you cannot file as head of household if you are married. What filing status is checked at the top of your Form 1040?

Are you working on a 2024 tax return or an earlier year? Are you using TurboTax Online or the desktop (downloaded) TurboTax software?

[Mark7902]

Sorry about the mistake, married head of household I am married and we file one return. 

All else is simple: Yes, primary home. No, only one mortgage. Yes, 1098. I typed in that info to TT. No, not seller-financed. No, not refi. No, did not use any of the mortgage for anything other than the house. 

Thanks, Mark

[rjs]

I'm out of ideas. Try deleting the mortgage and entering it again. Read all the questions carefully.

Where exactly in TurboTax does it tell you "to take the standard deduction"? What does it say, exactly?

You still haven't answered some of our questions.

Are you working on a 2024 tax return or an earlier year?

Are you using TurboTax Online or the desktop (downloaded) TurboTax software?

Which filing status box is checked at the top of your Form 1040?

If you are using the desktop software, go to forms mode, open Schedule A, and see if the mortgage interest appears on lines 8a, 8e, and 10. Is there $10,000 on lines 5e and 7? Is line 17 more than the standard deduction?

The standard deduction is quite high. For 2024, married filing jointly, if both of you are under 65 and not blind, your standard deduction is $29,200.

If all else fails, try calling TurboTax support and see if they can help you. With your permission they can share your screen and look at your tax return, which we can't do here in the community.

[Mark7902]

 Thank you for taking the time to suggest other possibilities. I am no longer on my desktop, where TT is loaded, so can't check the new things you suggested, but I will, probably tomorrow. I just wanted to say thank you.

I am over 67, but my wife is only 48. I did not know age mattered. 

I promise to go through your suggestions but it may be 24 hours before I can. Cheers!

[VolvoGirl]

Age matters for the Standard Deduction.  For 2024, Joint is 29,200 +  1,550 for each spouse 65 or older.  So your Standard Deduction would be 29,200+1,550 = 30,750.

[VolvoGirl]

You may need to wait until January when more forms will be ready. There are many program updates to come.   They usually come out on Thursdays.

How to change between the Standard Deduction and Itemized Deductions

https://ttlc.intuit.com/community/accessing/help/how-do-i-change-from-the-standard-deduction-to-item...

And you can switch to Forms Mode and open Schedule A to see.  If it doesn't show Schedule A in the list on the left,  Then click Open Forms box in the top of the column on the left. Open the US listing of forms

[Mark7902]

Cool! I can add $1500.  Thank you!

[Mark7902]

Good ideas! Thank you. 

[VolvoGirl]

Turbo Tax automatically adds the >65 $1,550 to your Standard Deduction.   But that is still not as much as your mortgage interest Itemized Deduction of 40k.