Using the total amount would put me in the category of itemizing instead of taking the standard deduction.
There is a known problem with Home Mortgage Deduction. TurboTax is working to fix the problem and the many other issues. There are many changes due to the CARES Act that require software upgrades. We have not been given an expected date for the fix yet. Please check back often to see if you can file your return.
OR
In the meantime, you can try this work around. You did not provide the details of your Mortgage situation and therefore I am giving you a general work around that might help. Please try this.
If there is a refi and there was an outstanding mortgage principal listed in both of them on Line 2 on the 1098. When you do put an outstanding balance in both forms, then the program adds them together and if that number is greater than $750k, then it puts you in the category to "limit interest". To get that to go away, you need to go back to the deductions section and click on "edit" mortgage interest statement. Change the line 2 of the mortgage that you no longer owe on (like the one that you refinanced and paid off) to a 0 (zero) because you have refinanced out of that loan and no longer have an "outstanding mortgage principal". Once you change one of them to zero (the one that was paid off by the refinance) then it should no longer pop up with that error at the end when you go to file.
Thank you for your suggestion, but there is no mortgage refinancing involved in my question. When the software is upgraded and the problem with the Home Mortgage Deduction is fixed, will I see that it automatically looks at the total amount of my mortgage interest instead of having it as a reduced amount? If so, when the software uses the full amount of my mortgage interest, I expect to see that it will allow me to itemize my deductions instead of using the standard deduction.
How many 1098's do you have and if there are more than one, did one 1098 replace the other?
If you imported your 1098 information and feel there is an error, I definitely would suggest that you delete out the imported version and manually type in the information directly from your 1098. This year we (not just TurboTax but many tax prep software programs) are seeing a lot of discrepancies in what is actually on the 1098 versus what is getting imported into the tax software. This could be due to a number of factors, but from what I have been hearing it is mostly due to financial institutions trying to keep up with the changing requirements of the IRS and their electronic versions of the forms. It is a little more work, but unfortunately it is the best way to ensure your information is being transmitted by TurboTax to the IRS correctly.
I didn't import my 1098...I already manually typed in the amount. The amount I manually entered is $3126, but on my Schedule A, it is listed as $745.
If you rent out a portion of your home, or have a home office, some of the mortgage interest may be allocated to those things, which would reduce your mortgage interest deduction for your itemized deductions.
I reviewed the information I manually entered from my 1098 and discovered a number that was entered incorrectly. The tax return now shows that the itemized deduction is larger than the standard deduction; however, the "ticker" at the top of the page is not changing the amount of my refund. Even when I have the system check the return, it's not changing the amount of the refund. I have told the system that I want to use the itemized deduction. Is there a way to see a copy of the return that will be filed before actually filing it so I can see if it is correct?
Yes, you can preview your 1040.
Click on Tax Tools on the left side of the screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.
Thank you for that information. I can preview my tax summary and see that it is still pulling in the standard deduction instead of the itemized deduction. Is there a way to fix that? When I look at the section where it allows you to change your deduction, the itemized deduction is selected, but it's not reflecting it on the 1040.
You can change from standard deduction to itemized and vice versa.
TurboTax automatically selects the deduction that gives you the best outcome on your federal taxes. Most 2020 federal tax filers will be better off with the standard deduction versus the itemized deduction.
You can always switch to a different deduction. However, if you and your spouse are filing separate federal returns, both of you must take the same deduction per IRS rules.
Tip: It's best to hold off on switching until after you've finished going through the Deductions & Credits section. That way you can get an accurate picture of how both deductions affect your bottom line. Also, keep in mind that switching to the other federal deduction may impact your state tax return.
TurboTax CD/Download instructions
Related Information:
I qualify for the itemized deduction. I have switched back and forth from choosing the standard deduction and using the itemized deduction, but Schedule A still keeps pulling in the standard deduction. Do I need to clear the whole thing and start over for it to pull in the itemized deduction correctly?
If you know that your mortgage, property tax, state tax, charity and maybe a few other things add up to more than the standard deduction for you, you want to go that route. Make sure that the program is not marked that you want to take the standard deduction regardless of the consequences. MFS must choose the same standard or itemized for both, so the option exists.
You stated that you have gone back and forth a few times. You may have gotten a piece of data stuck. Try as many steps as needed.
I deleted and re-entered the mortgage interest form, and it did not change the amount of the refund; however, I think I might have discovered what might be happening. I already submitted payment for my 1040 before I realized that I had an error in the 1098 information that I manually entered. Any change that I am making is not being reflected because I have already submitted payment to Intuit?
It depends. it doesn't matter if you submitted your payment to intuit BUT what does matter if you submitted your return to the IRS. If so, you will need to amend your 2020 return. You will be able to amend by mid-to-late March if this is the case.
If you haven't submitted return, you can still make changes. You can log into your landing page in Turbo Tax and if it says in progress, you can make changes.
I have submitted payment to Intuit, but have not yet submitted my return. I am still able to make changes to the return, but I'm not getting it to recognize and point to the itemized deduction instead of the standard deduction. I made a change in the mortgage interest section and now the itemized deduction is more than the standard deduction, but the return is still listing the standard deduction.
At some point did you elect, intentionally or unintentionally, the Charitable Cash Contribution under CARES Act?
If so, you would see the entry on line 10b of the 2020 Federal 1040. Its existence could be confusing the standard deduction / itemized deduction election.
If you are in TurboTax Online, the screen Charitable Cash Contributions under CARES Act appears as the end of Deductions & Credits. First you have to pass the screen Based on what you told us, the standard deduction is best for you at the end of Deductions & Credits.
But you have to qualify for the standard deduction before the screen appears. So you may need to change the value of one or more itemized deductions to $1 so that you qualify for the standard deduction.
Then follow these steps:
See also this TurboTax Help. Hope this helps.
I am able to delete a charitable contribution and the program qualifies me for the standard deduction; then I can choose to change to the itemized deduction, and re-enter my cash contribution. At this time the program gives me the correct amount of the refund. However, when I review the return, it still shows the standard deduction amount. When I "wrap up tax breaks", it changes the refund amount again because something is not allowing the itemized deduction amount to show up on the return.
Yes. There is an issue with the contributions deduction and TurboTax is working to fix it. We do not have an estimated date of correction, at this time. I suggest you check back often to see if the correction has been made.
There is a problem with the Contributions section of the Itemized deductions and also the above the line $300.00 deduction. Because of the many changes due to the CARES Act, IRS is still developing the forms and publications on this issue. Last update was January 13th where everything is still in draft. Once IRS finalizes the forms, we will be able to update TurboTax to accurately reflect your Contributions deduction.
Here are some of the changes due to the CARES ACT
The new legislation allows tax deductions on two types of charitable gifts. First, it allows up to $300 given to a qualified charity to be claimed as an above-the-line deduction. After the Tax Cuts and Jobs Act, which went into effect in 2018, increased the standard deduction, many taxpayers had less incentive to donate to charities. Instead, they took the standard deduction and stopped itemizing.
For taxpayers who will itemize deductions, the CARES Act effectively suspends the limit on deductions for cash contributions to public charities for 2020. “That allows individuals to completely wipe out their AGI, and their tax liability, with a charitable contribution.
Is there any chance that TurboTax would send an email when this problem is resolved?
Is there ever a situation where the program looks at the itemized deduction correctly? I know that I cannot clear my form and start over (because I've tried). Would it look at the itemized deduction if I clear sections of the return and re-enter them...or would I be wasting my time?
There is no solution that offers an email for Charitable contribution. The best thing is to check back as often as possible to see if it has been corrected. Please try this work around in the meantime.
You should try to clear the Charitable contributions and re-enter them. Sometimes it clears everything.
OR, in the meantime, you can try this workaround.
TurboTax ONLINE
Click Tax Tools on the left side bar
Click Tools from the drop-down
Click the "Topic Search" box on the screen
Type or scroll down to standard deduction and exemptions
Click GO
The next screen gives you an option to change your selection from Standard to Itemized and back. You do not need to change your selection
Scroll down to the bottom of that screen and click CONTINUE
The next screen is the Charitable Cash Contributions under Cares Act screen
IF YOU ARE CLAIMING STANDARD DEDUCTION enter the amount of cash contributions you made, up to 300
IF YOU ARE ITEMIZING DEDUCTIONS enter 0
Scroll down and click Continue
Click Continue on the next screen
DESKTOP
Go to Step-By-Step input
Click Federal
Click Deductions & Credits along the top
Click “I’ll choose what I work on”
Edit or Update Donations to Charity in 2020 if needed, then click “Done with Charitable Donations”
Scroll down the “Your 2020 Deductions & Credits” screen and click “Done with Deductions”
Click Continue on the “Let’s Check Your Deductions and Credits” screen
Continue through the following interview questions until you get to the “Here Are Your 2020 Deductions & Credits” screen
Click Continue
If the next screen says “The Standard deduction is Right for You!” click Continue
ON THE NEXT SCREEN enter the cash contribution made in 2020 and click Continue
Your 1040 should update
“The new "up to $300 above the line cash charity donation" is available for tax year 2020. This allows a Taxpayer to claim up to a $300 credit which is subtracted from income on the 1040 line 10c if the Taxpayer is claiming the Standard Deduction. (If you Itemize Deductions, all your donations will be listed on Schedule A.) “
I have tried several "workarounds", but nothing is allowing me to itemize my deductions. I can make the system look at my itemized deductions and show the correct amount of my refund...until I "wrap up my deductions"...at which time the system always defaults to the Standard Deduction. Is this expected to be fixed soon? I'd really prefer not to file my tax return with the standard deduction.
Are they within $300 of one-another? (Standard vs Itemized?)