TT DEFAULTS TO STANDARD DEDUCTION

[GUD]

I used TT Online in 2023 (to file for 2022).  Once I entered MORTGAGE INTEREST,  a program message said STANDARD DEDUCTION would be used.  Although I went on to enter more ITEMIZED DEDUCTIONS, like several Charitable Deductions,  these were ignored.  Later that year, I  noticed the error and attempted to ammend the return.  This required me to download TT Desktop Version.  I manually re-entered the Itemized Deductions but the program still ignored them.  I called support and she was finally able to do something to force the items to stay and ammend the return.  This makes me nervous about using TT to file in 2024(for 2023). Has the glitch been fixed?

[xmasbaby0]

If you do not enter enough itemized deductions to exceed your standard deduction, the software defaults to your standard deduction.

Are you making the common mistake of just adding up all the amounts for your itemized deductions without considering the caps and thresholds that must be met?

STANDARD DEDUCTION

Many taxpayers are surprised because their itemized deductions are not having the same effect as they did on past tax returns.  The new higher standard deduction and the elimination of certain deductions, as well as the cap on state and local taxes have had a major impact since the new tax laws went into effect beginning with 2018 returns.

Your itemized deductions have to be more than your standard deduction before you will see a change in your tax owed or tax refund.  The deductions you enter do not necessarily count “dollar for dollar;” many of them are subject to meeting  tough thresholds—medical expenses, for example, must meet a threshold that is pretty hard to reach. (Only the amount that is MORE than 7.5% of your AGI counts)   The software program uses all the IRS rules that apply to the expenses you enter, and it tells you if you have enough to use your itemized deductions or if using the standard deduction is more advantageous for you.  Under the new tax laws, some deductions have been capped—there is a $10,000 limit to the itemized deductions for state, local, property and sales taxes.

Your standard deduction lowers your taxable income.  It is not a refund.  You will see your standard or itemized deduction amount on line 12 of your 2022 Form 1040.

2023 STANDARD DEDUCTION AMOUNTS

SINGLE $13,850  (65 or older/legally blind + $1850)

MARRIED FILING SEPARATELY $12,850  (65 or older/legally blind + $1500)

MARRIED FILING JOINTLY $27,700  (65+/legally blind) )  + $1500 per spouse

HEAD OF HOUSEHOLD  $20,800 (65 or older/blind)  + $1850)

[GUD]

This is not the case for me.  As I said the return was successfully amended with assistance from  SUPPORT.  The issue was/is a glitch in the  program.  I just wonder if it persits.

[DoninGA]

Using the online editions for tax year 2023 and filing as Married Filing Jointly, encountered no issues entering itemized deductions and having those deductions total up correctly -

Entered itemized deductions -

State Taxes - $4,500

Charitable Donations -$1,000

Mortgage Interest - $10,000

Property Taxes - $4,000

TurboTax recommended the Standard Deduction of of $29,200 with the Itemized Deduction showing a total of $19,500

[GUD]

Glad  it worked out for you.   It didn’t  for me.   I made no errors.  The program did.  My  Itemized  Deductions far exceeded $29,200.  Program made them zero.  SUPPORT fixed it.

[rjs]

Can you tell us exactly what the error was in the TurboTax program? What are the steps to recreate the problem? What did the support rep do to make the program use the itemized deductions?

I am not aware of an error last year that would cause itemized deductions to be ignored, and I have not seen other posts about it. Literally millions of TurboTax users have entered itemized deductions without any problems.