My property taxes were $2700 in 2020. I itemize. TurboTax is giving me a 10,000 credit and says my deduction is capped. Why is it saying 10,000 when I only paid 2700?

[penfoldpaul]

I understand that 10,000 is the limit under SALT.  But when I only paid 2700, I don't understand why I am getting a 10,000 credit

[macuser_22]

Review your entries.   You might have typed 27000 by mistake.

[penfoldpaul]

Good point, but I didn’t enter it wrong.  It’s says “you have now maxed out the federal $10,000 deduction for itemized state and local taxes.  Combined with your state and local tax deductions, your $2700 property tax deduction reduced your income by $10,000, which lowered the tax you owe”

Anyway, I still don’t know how paying $2700 gets me a full $10,000 credit.  Any advice would be appreciated!

[Centavo]

Yes this is what I am getting to when I have only entered 953.  Its not letting me count my donations either.

[VolvoGirl]

Taxes paid includes other things.  There  is a max 10,000 limit (5,000 MFS) of property tax and state taxes "SALT".  SALT is State And Local Tax.  Which includes property tax, any state tax paid like for last year’s return and includes any state withholding from your W2s and any 1099s you have. And any taxes in W2 box 14 and 19 like SDI or VDI. You can only deduct up to 10,000 (5,000 MFS) for SALT State and Local Taxes.

[macuser_22]

Did you enter state tax?

Look at schedule A lines 5a - 5e to see what was entered?

[SteamTrain]

@penfoldpaul 

I tested it in my Online software, to see what & when that notice is provided....So...when it gives you that notice...it is not talking about Only the Property taxes entered....it is talking about the total of all your state and local taxes you may have entered already in other sections too.

So all your W-2, and 1099-R state withholding payments are included in that $10k limit that it shows....as well as any state taxes you paid during 2020 for your 2019 taxes.....and if you paid any State quarterly estimates during 2020...then those are added in too.

[Centavo]

Usually you are able to claim your charity givings.  When I enter this enter it doesnt effect my taxes at all.

[VolvoGirl]

Maybe you are getting the Standard Deduction.  Adding deductions won't help until you enter more than the Standard Deduction.  And then only a little for the amount that puts you over the Standard Deduction.  But you can deduct up to 300 for Charity in addition to the Standard Deduction on 1040 line 10b.

Go though the deduction section and enter your charity amounts.  Then keep going and finish that section.  It should say the Standard Deduction is right for you.  Then it will add the amount to line 10b.

[SteamTrain]

The other thing that some people don't realize, is that if you are already in the itemized deduction territory, and if your prior-entered deductions have already reduced your taxable income to a zero, adding a billion $$ of charity donations would not change do anything... and may be getting all your prior Federal withholding back already.

_________________

Probably not your situation...but maybe.  We've had similar complaints for a few people who entered their donations first...well yeah !   You need to get ALL your income in first if you want to make reasonable sense about whether your deductions are helping or not.    IT still works out doing it either way, but making sense of the refund meter only works if all your income has been entered first.

[penfoldpaul]

This is my 1040A itemized deductions for taxes I paid

Line 5a - $0

Line 5b - $2762

Line 5c - $535

Line 5d - $3297

Line 5e says enter the smaller of line 5d or $10,000 (I’m married).   Why is TurboTax is entering $10,000 instead of $3297??

Line 6- $0

Am I missing something?

[penfoldpaul]

Turbo tax is giving me the itemized deduction as it says it is bigger.  But I think this is due to a miscalculation regarding my property tax deduction as mentioned above with me getting $10,000 credit instead of $3297.  To me, it seems like the software is making a mistake

[SteamTrain]

From the numbers you posted.....yes, something seems screwy.

1) you might need to clear and start over...

or

2) Call Customer Support...they can direct you how to create a "Diagnostic" file that they can examine to see what's going on.

https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turbotax-phone-number/00/25632

[penfoldpaul]

It might be that the amount I paid in state income tax is being added in on top of my real estate property and personal property taxes.   That is the only explanation I can see for why I would hit the $10,000 limit.   Your post was helpful in helping me realize this possibility.   Thanks

[penfoldpaul]

Yes I’m beginning to wonder about state taxes paid that I may have entered in other sections.   It’s the only explanation I can come up with as to why I would hit the $10,000 limit.   Thanks Steam Train