Can't change my deduction to itemized despite saying it's best for me. It's defaulting to standardized deduction?

[DollyWoodPigeon]

I can't seem to select itemized deduction. After doing my taxes and finishing the Deductions & Credits section, TurboTax online recommends the itemized deduction and I can select "itemized" but when I preview my tax filing, it's actually showing the standard deduction ($12,400). 

It says "Based on what you just told us, itemizing your deductions is best for you". For reference it's only $12,500 (itemized) vs. $12,400 (standard). I made a $2,500 contribution to charity, so the calculation is $10,000 (property, state, and local tax deduction limit) + $2,500 (deductible charity) = $12,500 itemized.

What should I do here?

[WendyN2]

What you will want to do is this - Go back to the Itemized Deductions section where you entered this information (top tab "deductions and credits" under Federal Taxes and review everything while you are there to make sure everything was entered correctly. At the very bottom,  if it all looks good, click on "Done with Deductions".  Let the system run its check, then click continue when its done. This next page will show you your Total Deductions and Credits, click "continue". Then, on this next page, if all was entered correctly and you were previously selected as "Single", it should tell you that it has chosen Itemized Deductions for you.

[todnanleff]

I have the exact same problem as OP and no matter what I do the program will not switch to itemized deductions even when I specific select it when prompted.

[DollyWoodPigeon]

Hi it still doesn't work. I've redone the deductions and credits section many times.

I wonder if this issue is related to charitable contributions. In my situation, playing with the charitable contributions amount, any amount above $2,700 seems to make the itemized deduction work while anything $2,500 to $2,700 is still standard deduction despite the system telling me itemized deduction is best.

[AmyC]

This year, there is a special $300 charity deduction you take with the standard deduction. So, if your standard deduction is $12,400 and your itemized is $12,500 this year, it is actually smarter to go with standard deduction plus $300 charity for $12,700 total deductions. That is why you are getting that small range of charity and change.

The program is giving you the best deal, standard plus $300.

@todnanleff

@WendyN2

[DollyWoodPigeon]

Thanks, the $300 special deduction this year is probably what's causing the issue. Seems like it's a bug in TurboTax because it should tell me that.

[ReneeM7122]

It's not really a bug, it has to do with the CARES Act.  Previously, charitable contributions could only be deducted if taxpayers itemized their deductions.

However, in 2020, taxpayers who don't itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations. For the purposes of this deduction, qualifying organizations are those that are religious, charitable, educational, scientific or literary in purpose. The law changed in this area due to the Coronavirus Aid, Relief, and Economic Security Act.  You can remove the $300.  Here's how:

1. Delete the $300 in the error check.
2. Then go back to Deductions & Credits and enter the contribution there, in the Donations to Charity topic.
3. Click Done with Donations and proceed through the screens until you get to the screen that tells you that TurboTax has added in the contribution.

The contribution should appear on Form 1040 line 10b.

@DollyWoodPigeon

[Chad_2020_tax]

For anyone searching this thread at the last minute, I agree with this poster. It should tell you it is switching you and for what reason.

The problem is that the system doesn't say in the final review why it is forcing the switch to standard plus the 300 vs. sticking with the itemized. It's not clear at all because the online software makes a big deal about going itemized during the deductions review process.

What needs to be coded in is an explanation of "hey, you're close to the line here - if we change you to  Standard Deduction and we put 300 in line 10A (or whatever it was) of the work sheet it is a better deal for you than itemizing because you are so close"

Or it should tell you at the end during the federal review "Hey, we know we told you to go with Itemized, but in the review we found that you're actually better off going with Standard plus this line for charitable contributions filled in this way."

It doesn't. All it says is to do is "review this line." With no explanation or not instructions as to why. That's the bug. The software is doing what it says it does-  it finds the best option ...at the last minute ... and switches appropriately. It just doesn't tell you why. 

Below is an answer the Turbo Tax folks posted at:

https://ttlc.intuit.com/community/charitable-donations-deductions/help/standard-vs-itemized-deductio...

"Some customers are reporting confusion over the calculations of standard deduction versus itemized deduction in TurboTax Online and TurboTax CD/Download. Customers whose deductions are very close in difference aren’t understanding or seeing that the Charitable Donations credit (with a maximum of $300) is being applied to their standard deduction, leading them to believe that itemized should be chosen to maximize.

However, if they select itemized and continue (believing it to be higher), they think the standard deduction is being "forced." They’re not able to see that with the $300 credit, the standard deduction is actually more beneficial than the itemized deduction.

This issue won't prevent you from filing your tax return"

[LFivecoat]

Just went through something similar.  Ended up looking at the worksheets in the "forms" section and was able to manually check the box to itemize deductions- I'm married filing separately and my husband itemizes, so that's the box I checked.  Do NOT go back to re-run the checker, from that point just move on to the State taxes. I was able to file federal electronically as long as I didn't go all the way back to have the auto-checker "do it's magic". bleh.  A real pain in the butt.

[Aksuperior]

I'm having this problem, too: I can't switch to itemized, even though TurboTax is telling me that it's better. I just end up looping on the screen. Looks like a software eror. But more importantly...

You can't be sure that "the program is giving you the best deal" unless you know more about the state taxes. For example, Maryland requires the same deduction as federal. But Maryland's standard deduction is only $2,350/$4,700.  So you have to compare the combined refunds.  

Let's say you're a Maryland resident filing jointly, with itemized deductions of $24,700. The standard deduction of $25,100 is a little better for your federal return. But it's much worse for your state return, because now you have to use the Maryland standard deduction of $4,700. However, if you itemize, you get to deduct the full $24,700 on your Maryland return. 

Quick math for this example: 

Federal deduction increases from $24,700 to $25,100 = $400 x 22% = $88 tax reduction

Maryland deduction decreases from $24,700 to $4,700 = $20,000 x 7% = $1,400 tax increase

Note that TurboTax DOES NOT do this check for you. It chooses itemization  based on what's best for your federal return, and locks you in for state.  I found this out the hard way, and had to amend my state and federal returns a few days later when I realized how paltry Maryland's standard deduction was. Under the standard deduction, my federal taxes were about $100 lower but my state taxes were about $1,200 higher.  Do this check yourself manually, especially if your itemized deductions are close to the standard deduction.