Tax Year 2020 - Why is TurboTax not applying my itemized deductions when they are larger than the standard deduction?

If your itemized deductions are greater than the Standard Deduction, TurboTax will automatically use the itemized deductions on your Schedule A. 

 

Some deductions are subject to limitations, so this could have changed what was the most beneficial deduction in your tax situation. 

 

If you need to review your deductions or force the use of Itemized Deductions, please follow the steps below: 

1. Open your return.
2. Click on Tax Tools on the left hand side.
3. Click on Tools.
4. Click Topic Search. 
5. Search "itemized deductions, choosing"
6. Click on Change my deduction.
7. Choose Itemized Deductions under Which deduction do you want to take this year? 

Ok ...  for 2020 & 2021 there is a new rule where you can take the standard deduction 24800 + 300 cash contributions which gives you an overall deduction of 25100 which is just a bit more than 25078 ... so the program is correct ... stop trying to fight it.

My Mortgage interest alone is greater than the married filing joint deduction -add the $10K for prop tax and stated and we are way over the standard deduction - TT is insisting on the standard deduction and I click use itemized and it comes back with $19K of itemized.  This is wrong  - we are not in phase out we have less than @$220K in income.  Tried the help however there is no Tools on the left side - Tools are on top and there is no option for itemized in there - is this to be fixed in future roll outs.  

@MRAM2020 

 

Did you look at the sch A yet ?   Is it correct or not ?    If not then which lines are not correct ?   Do you have more than one 1098 form to enter ? 

I have the exact same problem, only once the return was open and I started working on it, the Tax Tools showed up and I was able to access the topic.  However, I tried to change to Itemized Deductions and it WOULD NOT LET ME.  Just popped back to Standard.

These instructions work to get to the right place, but I cannot change the deduction to Itemized.  I try and it pops it back to Standard repeatedly.

Yes.  If your itemized was more than your standard deduction, you may try to do it manually to select itemized deduction.  To select itemized deduction:

1. Click the Federal Taxes tab. ...
2. Then, Deductions & Credits. ...
3. Scroll all the way to the bottom, and click Wrap up tax breaks. 
4. Continue through the interview screens.
5. Under "Let's make sure you're taking the deduction to keep you taxes accurate", select "we're itemizing our deductions", click continue

 Eligible taxpayers use Schedule A  to figure itemized deductions.  In most cases,  federal income tax will be less if you take the larger of your itemized deduction

This is exactly what happened to me. Unfortunately the TT software is saying that Itemized Deductions is better, but when you continue it shows an error and wants you to enter an amount in 10b of the charitable giving form, under Standard Deduction, which according to TT I wasn't using (I was supposed to be better with Itemized). If you don't enter anything here (again I thought I was itemizing) it just loops you back to Deduction and then it starts all over again.

The software should've called out that I am allowed the Standard Deduction plus $300 cash deduction = $25,100 (which is slightly better than my itemized deduction) and tell me I should take the Standard Deduction. Instead it told me that Itemized is better, but then I keep getting the error because it's looking for an amount in 10b for Standard Deduction :(

Did you try entering $300 just to see if the error persists?

I am having this problem.  I need help with switching to itemizing so mortgage and medical kicks in... called TurboTax and on the phone for a long time.  I am not sure what to do, and I am not sure what I am not understanding.  Do I really have to go to a professional and pay them to figure this out?

My version is not offering a Tool option!

If you don’t see Tools in the left pane in TurboTax Online, then:

1. If you’re on the Hi TurboTax Client, let's keep working on your taxes! screen, with Personal Info, Income & Expenses, etc. beneath, and none of those are open, click the dropdown next to any of the categories, then click the Review/Edit or Pick up where you left off button

2. This will produce a pane on the left side of your screen

3. In the left pane, select Tax Tools

4. Then, under that, select Tools

@1preguntas2

Why is Turbotax forcing me to use the standard deductions when my itemized deductions are higher?

The reason for this could be if you are taking the charitable contribution deduction ($300 or $600 depending on your filing status) on top of your standard deduction. If so, the standard deduction may be more beneficial to you.

 

When you preview your return, is there an amount on your 1040, Line 12b?

 

Please follow these steps to preview your 1040:

1. Open your return.
2. Click on Tax Tools on the left-hand side.
3. Click on Tools.
4. Click on View Tax Summary.
5. Click on Preview my 1040 on the left-hand side.
6. Scroll down to your 1040, Line 12b.

Line 12b is your contribution deduction amount on top of your standard deduction. Considering Line 12b, your deduction may be greater if you take the standard deduction. 

 

@Jojo1210

I had the same problem. I'm using the downloaded version of Deluxe. When I left the UI and looked at the actual tax forms, my mortgage interest was

not

transferring to line 8a of Schedule A.  I think this is a bug but I would like TurboTax to confirm... I spent a long time trying to figure that out.  For the first time in 15 years, I'm doubting whether or not I should try a competitor.  

In certain circumstances, TurboTax does not seem to be correctly carrying the reported interest to the appropriate form. If you originally purchased your home prior to December 15, 2017 and have since refinanced it and your outstanding mortgage principal exceeds $750,000, this may apply to you. If so, enter Form 1098 for the refinance in this way:

1. In the Federal > Deductions & Credits section of your return, scroll down to Your Home and click Revisit/Start next to Mortgage Interest and Refinancing (Form 1098)
2. Edit your existing 1098. 
3. Answer the questions and enter the information from your Form 1098s. For the Box 3 Mortgage Origination Date, use the original purchase date even if this is a refinance.
4. Answer What kind of property is this loan secured by?
5. Answer Yes or No to  We didn't pay any points.
6. Answer Yes to Let's see if this is the most recent form for this loan.
7. Answer No to Is this the original loan used to buy your property? 
8. Answer Yes to Is this loan a HELOC or a refinance? 
9. Answer No to Did you take cash out? (assuming you did not take cash out when you refinanced in 2020)
10. Once you are back in the Home loan deduction summary screen, click Done.
11. Answer NO to Do either of these apply to this loan? Answer No even if it does apply, by using the mortgage origin date of the original purchase back in step 3, TurboTax will correctly apply the proper mortgage limit on your home acquisition debt. 
12. Enter the outstanding loan balance on January 1, 2022 in the first field. Leave the second field blank.

 

@misaelcabrera1970

My issue is the same; regardless that the $ return is the same, I WANT to file itemized, not standard. My reason is that this past year I was on workers comp, so my reportable income was lower than normal years. I need to file itemized ($26,414) so I can try to do deduction rollover for qualifying items in next years filing. So why is it trying to force me to accept only Standard ($12,950)?

 

Verify that your Schedule A is showing a higher number for itemized deductions, as some deductions have limitations and you don't get to include the full amount.   Follow the instructions in this help article to change your deduction choice.    How do I change from the standard deduction to itemized (or vice-versa)?    @AKSnobear

Schedule A shows the correct totals:

Property Tax $5640+Mortgage Int $13,238+$7536(limited) = $26,414.

Refund = $2176 (via both Itemized & Standard methods) the program interface just won’t let one change to itemized; keeps going back to Standard is Best for You.

I find this morning, when I use the print and mail version, and save the return, it says itemized, shows the itemized items, and shows all the deductions correctly. Then, going back and switching to the e-filing version, it shows items correctly. Guess I’m good to go?

Yes, if everything is showing properly then you are good to file.

 

Sometimes, if your refund is staying the same whether you are given Itemized or Standard Deduction, it could be that your Standard Deduction took your taxable income to $0 so there are no additional benefits to itemizing your return. 

 

 You may also not see a difference if you have a non refundable credit like the EV credit that took your tax liability down to $0. Once you have no tax liability additional Itemized Deductions or other nonrefundable credits will not affect your refund.  

Thanks, Vanessa. My chief concern is not so much the refund, but rather the method. My focus was insuring the itemized version was used, so the ability next year to claim any qualified carry over deductions, remained an option. If I file the Standard Deduction method, I understood this to mean it would prohibits that option.

You cannot carryforward mortgage interest or taxes paid. Generally only charitable contributions are able to be carried forward. 

 

 

Correct! It’s the nearly $8k I was unable to use, due to the lower wage last year on work comp, so had little to write off against this year. 

Try this: How to Switch from Standard to Itemized Deductions (or vice versa).

 

@AKSnobear