The property tax amount TurboTax transferred into my IL state return was MUCH higher than what I entered on my federal form, and now I have an IRS penalty. What happened?

[SweetieJean]

You mean a penalty from IL?  IRS is Federal.

[macuser_22]

That might be possible because the 2018 Federal tax law caps the total of Sales tax OR State and local income tax,  Property (real estate and personal property) taxes at $10,000.   Many states have not adopted the Federal limits.  But the IRS has nothing to do with state tax.

[Julie773]

I meant that the penalty is from the state revenue service.

[Julie773 · Accepted solution]

OK, I think I figured it out. I was not allowed to submit a Schedule A because of the new 10K deduction limit, but TT completed one for me anyway, and then when it transferred the numbers to my state return, TT added the Schedule A property tax amount to the amount that I actually entered (then deducted a small amount for business use), so it got added twice through no actions on my part. Big screwup, Turbotax.

[Anonymous]

TT did not add schedule A that is where you enter them.  then again on Illinois ICR schedule.  

[Anonymous]

il has not limited the real estate tax credit  due to federal limit on SALT. did you pay real estate taxes on other than your principal residence.    did you deduct as business or rental expense and real estate taxes on your principal residence? if so you misentered them  TT thought the entire amount was Illinois. 

were taxes paid through real estate escrow and you entered on both 1098 worksheet and tax and interest worksheet.

since we can not see your return, we can't really tell why the issue arose.  

it's also a good idea to check your returns before efiling or mailing to look for errors .  this error should have been obvious.  

[Julie773]

I didn't pay any real estate taxes on anything other than my principal residence. And I didn't misenter anything on my federal. The number that TT transferred into my state return doesn't seem to match up with anything that I can see. In the last few years, I've caught errors that TT didn't a few times -- unfortunately, this one got by me. Might be time to dump TT and use a real accountant.

[Anonymous]

all i can suggest then is to contact TT support which can look at your return and figure out what went wrong.  

do you really think that software used by pros don't have bugs?