Turbotax is not applying real estate tax deduction to my return

[Anita01 · Accepted solution]

The program starts out by giving you the standard deduction for your filing status.  As you enter itemized deductions, the program switches to using itemized deductions instead of standard as soon as your total itemized deductions exceed your standard deduction.  Entering any one itemized deduction, such as property tax, is usually not enough to reach a high enough total.  You don't get to take the standard deduction plus property tax; you only get to deduct the property tax if the total of ALL your itemized deductions exceeds your standard deduction.  If you have additional itemized deductions, continue entering them.

'Property tax can also have no impact on your return if you are paying AMT, because property tax is added back to the calculation of taxable income for AMT.  Basically, every dollar of regular tax reduced by the property tax deduction is balanced by a dollar of additional AMT.