Issues with recognizing the SALT deduction for incomes above $500k. Our income is $538k, but it wont allow us to deduct property tax above $10k.

[SteamTrain]

@WIltonCT 

I don't know if it's working properly or not.

BUT

The phaseout is based on a higher MAGI, not AGI.

___________________

MAGI for SALT phase-out purposes, is supposedly the following (from a Google AI search)

______________

Components Added Back to AGI for SALT MAGI:

• Tax-exempt interest: Interest income from municipal bonds, etc..
• Foreign earned income and housing: Amounts excluded from income on Form 2555.
• Foreign housing deduction: Amounts taken on Form 2555.
• Student loan interest deduction: Amounts deducted on Schedule 1.
• IRA contributions: Deductible IRA contributions.
• Adoption benefits: Employer-provided adoption benefits excluded on Form 8839.
• U.S. Possession Income: Income from American Samoa, Guam, Northern Mariana Islands, or Puerto Rico

[rjs]

@WIltonCT 

It's not clear exactly what "wont allow" means. Look at your actual tax forms, not summary screens in TurboTax. What are the exact amounts on Schedule A lines 5a, 5b, 5c, 5d, 5e, 6, and 7? What is the exact amount on Form 1040 line 11b?

When you say "property tax" do you mean real estate tax (Schedule A line 5b) or personal property tax (Schedule A line 5c)? What is the exact total amount of "property tax" that you entered? Is it a single amount from one source, such as a Form 1098, or is it from multiple sources?

As is often the case, AI is proved to not be reliable. According to the IRS Instructions for Schedule A, the only things that are added to AGI to calculate MAGI for the SALT phase-out are the Foreign Earned Income Exclusion, Foreign Housing Exclusion or Deduction, and excluded income from sources in Puerto Rico, Guam, American Samoa, and the Northern Mariana Islands. For most people MAGI will be the same as AGI.

[SteamTrain]

Yep....apparently tax-exempt interest-dividend $$ are not added back.

So much for the AI result.