How do I properly enter property taxes in Deductions & Credits if I claimed some in a home office deduction?

[pher]

In the Wages & Income section, I claimed a home office, for which part of the deduction is property tax.

When I got to the "Property (Real Estate) Taxes" section in Deductions & Credits, TurboTax says:

"Enter any additional property tax paid in 2022"

"Don't enter your home office deduction, $X is already included. You can change this."

So far, we have: Property taxes on your main home $X

I'm unclear whether TurboTax is telling me to *not include / subtract* the amount I claimed from my home office deduction, or if "do not enter" really means just don't put the home office deduction amount itself, but I should put the full property tax amount. I see that TurboTax says "additional" though, which made me wonder whether it's actually supposed to be not-include, and that "do not enter" was bad wording.

For example: Let's say my property taxes are $5,000 total, and I claimed $1,000 of property taxes for my home office deduction. Am I supposed to enter the $4,000 differential here, or the $5,000 total?

[ThomasM125]

When you made your home office entries, you should have entered the entire cost of your property taxes and TurboTax will spit it between your office and itemized deductions.  For instance, if your property tax was $2,000, you enter that amount and 25% of it (assuming that was your office use percentage) goes to your office and the rest goes to your itemized deductions on schedule A. If you did it that way, then you don't need to enter your property taxes again, 75% will show up on schedule A, in this example.

If you have other property taxes that have not been entered yet, for instance on another home you own, you can enter that in the itemized deduction section.

[pher]

Thanks Thomas — Sorry, I left out a nuance that turned out to be key. The following is completely separate from the office use percentage.

Although I paid property taxes the whole year, I had a home office for only the last few months of year. So, when it came time to enter the property taxes related my home office, I only inserted the amount of property taxes that I paid across that last-few-months period, rather than my actual total paid for the entire year. Continuing the example from my original post, I had put $1,000 (out of my total $5,000 in property taxes) into this field: "If [name] paid real estate (property) taxes on the entire home, enter this amount here and later go to the Deductions & Credits area and review the property tax information."

So now, arriving in the Deductions & Credits section, it says (continuing my example from my post), "Don't enter your home office deduction, $1,000 is already included. You can change this." And then the field "Property taxes on your main home" is pre-populated with the $1,000.

(Side note related to your response: Although the actual amount deductible for the home office would've only been a percentage of that $1,000, you can see that TurboTax ported over the entire $1,000 into the "Property taxes on your main home" field.)

As you can see, TurboTax appears to have populated $1,000 as if that was my full reported property tax from earlier (it did NOT port over just a smaller percentage). So does that mean I now replace it with the full total $5,000 into this Deductions & Credits section? But if that's what I'm supposed to do, why is it saying "$1,000 is already included"?

[ThomasM125]

What you need to do is leave the first mortgage information you enter as it is, then make an additonal mortgage interest entry for $4,000, or whatever amount represents the rest of the mortgage interest deduction. The full amount of that one will show on your schedule A and then the interest from the home office entry will be added to it. Just make sure the combined value of your mortgage balances does not exceed the $750,000 (if that applies to you) maximum amount allowed for one hundred percent of your mortgage interest to be deductible. Those numbers entered in TurboTax will not show on your tax return, so you can manipulate the mortgage balances you enter.

[pher]

I did actually already do the split you described, and was more referring to how I was supposed to properly address that in the Deductions & Credits section. But I think I figured out where my confusion was. 

The phrasing at the top of the page "Don't enter your home office deduction, $X is already included" ends up being very inapplicable in a situation where you claimed a home office for only part of the year.

The reason that TurboTax doesn't seem to handle this page's phrasing well is because it has you split the mortgage interest into the two separate "loans" parts when doing the home office deduction, but the property taxes come in a later home-office deduction section where the split does not exist. And when entering the property taxes in the later section, you therefore have to manually divide yourself based on the months you actually used it, and input that divided amount. But then, TurboTax ports over only this divided amount to the Deductions & Credits section, because it's normally operating in the Deductions & Credits section under the assumption that you operated the home office the entire year / claimed your entire property taxes there; it doesn't realize that the earlier property-tax value is divided, and it thinks it ported over your entire-year property taxes. (It knows the mortgage interest is divided because of the split loans, but not the property tax because that isn't applied at the split-loan level.)

The resolution is to simply adjust the "Property taxes on your main home" field value (in the "Enter any additional property tax paid in 2022" section of Deductions & Credits) to the full amount paid for the full year. (Note that doing this thankfully does not change the divided value back in the home office deduction section.)

On the side note of the 750k limitation, it appears TurboTax calculates that separately later. So I'm not supposed to limit it myself here.