Deductions and Credits

I entered 5189 for property taxes, I don't have any state taxes withheld in income. I received he message "You have now maxed out the federal $10,000 deduction for itemized state and local taxes." I clicked further to see how my itemized deduction was calculated because it is wrong. How am I getting 10k SALT deduction when I don't have pymts for State and local taxes.

528

Employee Tax Expert

Mar 7, 2021 8:52:18 AM

It depends.

This could also be factoring in any state taxes due when you filed your 2019 tax return. If you had any tax still due when you filed your tax return in 2020, this would also be considered a state tax on your itemized deductions.

I recommend reviewing your input to ensure no other values are included on your input for the 2020 income tax return.

Go to the Federal interview section
Select Deductions & Credits
Go to All tax breaks
Scroll down to ensure there is not any other input in the program that may be generating the additional tax deduction and correct as needed.

Level 15

Mar 7, 2021 8:56:21 AM

Review the Sch A carefully .... you get to deduct the larger of the state income tax withheld OR the state sales tax deduction based on your income. So the state sales tax deduction + the RE taxes could have maxed that section out.

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Deductions and Credits