8829/SALT error message

[PatriciaV]

We would like to further test the property tax allocation for a home office. It would be helpful to have a TurboTax ".tax2025" file that is experiencing this issue.

You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, please follow these instructions: 

In TurboTax Online, open your return, go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools.
2. A window will pop up which says Tools Center.
3. On this screen, select Share my file with Agent.
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number.
5. You may wish to snap a screenshot to post instead of the actual number.
6. Reply to this thread with your Token number (including the dash) and tag (@) the Expert requesting the token from you.
7. Please include any States that are part of your return - this is VERY important.

If you are using TurboTax for Desktop, go to Online in the top menu, then choose "Send Tax File to Agent."

We will then be able to see the same experience you are having. If we are able to determine the cause, we'll reply here and possibly provide you with a resolution. 

@RAinMD 

[RAinMD]

I actually ended up working directly with a tax expert--by phone--and she already has my file. I did pay for support, so potentially if this is a software bug, I'm hoping to get a refund on that!

I tried free support by phone, but that person indicated this issue was my error, but I did not agree and therefore paid for support to pursue further. The paid tax expert agreed with me that this looked to be a software error, took my tax file, and said she was let me know what the potential resolution was.

If you want me to provide you with the same token number she has so you can follow up, please let me know.

Thanks.

[rlaub]

I also provided an agent on the phone with a diagnostic file, but never heard back from anyone.

[RAinMD]

The agent I spoke to said if I didn't hear back from her, to call in and ask for her specifically. If you remember the agent's name, call in and ask to speak to them, she said they will get you back to them. If not, call in and give them the token number, perhaps they can look up your file and see what the status is?

[rlaub]

Unfortunately, I don't have the token number anymore and I don't remember the agents name.

[RAinMD]

If you go to get the token number again, I believe it gives you the same number each time (follow the instructions above if you don't remember how). You could try that. 

Otherwise, if I get a resolution, I will try to come back and let you know!

[rlaub]

Thank you.  I appreciate it.  Same here.

[rlaub]

I took another trip through the Turbotax support and spoke to someone who got this from another support person.  She emailed it to me.  -----

This issue arises because TurboTax incorrectly sums the total property tax on multiple Form 8829s instead of only applying the allocated business percentage, causing the combined, incorrectly calculated total to exceed the $40,000 State and Local Tax (SALT) cap. 

The root of the problem: Each Form 8829 for a home office requires 100% of the total home property taxes to be entered in the "Indirect Expenses" column, which TurboTax then erroneously multiplies by the number of businesses, rather than properly prorating the expense.

Here are the workarounds to fix this error:

Solution 1: Prorate Property Tax Manually (Most Reliable) 

Instead of entering the full property tax amount for both, split the total tax between the two Schedule C businesses. 

1. Form 8829 - Business 1: Enter 50% of your total property taxes.
2. Form 8829 - Business 2: Enter the remaining 50% of your total property taxes.
3. Check the Box: Ensure you check the box that says "Real estate taxes entered here were already entered on another home office". 

Solution 2: Enter as "Excess" Real Estate Taxes 

If the above method still triggers an error, you can enter the portion of taxes that should be allocated to the home office as "Excess real estate taxes" on the form. 

1. On the Form 8829 (in Forms Mode), find the line for indirect real estate taxes.

Move the amount that is being wrongly calculated as a total deduction into the "Excess real estate taxes" field.

The part about 50 percent is the problem

Solution 3: Use "Forms Mode" to Bypass 

If you are using the Desktop version, you can manually override the calculation: 

1. Go to Forms Mode.
2. Open Form 8829.
3. Check the "Line 8 Calculation Smart Worksheet" and ensure your percentage of business use of the home office is correctly entered (e.g., if you spend all your time there, it should be 100%).
4. If the total tax is still erroneously high, manually edit the indirect tax line to reflect only the proper percentage allocated to each business. 

Important Notes

• Do Not Enter Twice: Make sure you do not enter the full property tax in the "Deductions and Credits" > "Property Tax" section and again in the Home Office section. The home office portion should be handled only within the Home Office/Form 8829 section.

E-File vs. Paper: If TurboTax continues to show an error but the numbers on your Forms 8829 and Schedule A (Itemized Deductions) are actually correct, you may still be able to e-file.

If these methods do not work, it is recommended to delete both Form 8829 entries and re-enter them carefully using Solution 1.

[rlaub]

Here's what I have done which seems to works.  I entered the full real estate taxes for the first form 8829 on line 11.  On the second 8829, I entered the full amount on line 17, excess real estate taxes.  It gives me the same refund number as when I entered both full amounts on line 11 and got the error.  Not sure if it is the right way to do it or not, but it is the only thing working for me.

[DaveF1006]

Yes, your workaround is correct even if it may seem unorthodox. This avoids the TurboTax validation error while producing the same final tax result as entering both on Line 11.

This method is correct for IRS rules just as long as it is correct on:

• Form 8829 (allocable home‑office portion) 
• Schedule A (remaining personal portion)

@rlaub 

[RAinMD]

I'm guessing my issue is different since I am itemizing. I can't use the excess real estate taxes because of that. I heard from my tax expert who said they accepted our inquiry but hadn't heard back yet. So we'll see what she gets.

[rlaub]

I am also itemizing.  Why do you think you can't use this method?

[RAinMD]

---

@rlaub wrote:

Solution 1: Prorate Property Tax Manually (Most Reliable) 

Instead of entering the full property tax amount for both, split the total tax between the two Schedule C businesses. 

1. Form 8829 - Business 1: Enter 50% of your total property taxes.
2. Form 8829 - Business 2: Enter the remaining 50% of your total property taxes.
3. Check the Box: Ensure you check the box that says "Real estate taxes entered here were already entered on another home office". 

Solution 2: Enter as "Excess" Real Estate Taxes 

If the above method still triggers an error, you can enter the portion of taxes that should be allocated to the home office as "Excess real estate taxes" on the form. 

1. On the Form 8829 (in Forms Mode), find the line for indirect real estate taxes.

Move the amount that is being wrongly calculated as a total deduction into the "Excess real estate taxes" field.

The part about 50 percent is the problem

Solution 3: Use "Forms Mode" to Bypass 

If you are using the Desktop version, you can manually override the calculation: 

1. Go to Forms Mode.
2. Open Form 8829.
3. Check the "Line 8 Calculation Smart Worksheet" and ensure your percentage of business use of the home office is correctly entered (e.g., if you spend all your time there, it should be 100%).
4. If the total tax is still erroneously high, manually edit the indirect tax line to reflect only the proper percentage allocated to each business. 

Important Notes

• Do Not Enter Twice: Make sure you do not enter the full property tax in the "Deductions and Credits" > "Property Tax" section and again in the Home Office section. The home office portion should be handled only within the Home Office/Form 8829 section.

E-File vs. Paper: If TurboTax continues to show an error but the numbers on your Forms 8829 and Schedule A (Itemized Deductions) are actually correct, you may still be able to e-file.

If these methods do not work, it is recommended to delete both Form 8829 entries and re-enter them carefully using Solution 1.

---

@rlaub wrote:

I am also itemizing.  Why do you think you can't use this method?

---

---

Well first of all, you can't use excess real estate taxes if you are itemizing, so that option is out.

With respect to the other options, when I was with the real estate expert on the phone, we went through several other scenarios (including the options you laid out), and no matter what changes we made, none of them gave us the right numbers in the end, they always changed how much refund I was entitled to. So my option is to file on paper (since I can't get past the error with correct numbers to e-file) or wait until she gets back to me. Since I still have a month to file, I'm going to hang tight.