State and local taxes, including real estate taxes, are capped at $10,000 for itemized deductions. Regardless of the amount actually paid, you can only deduct a maximum of $10,000.
Victoria. You are not answering the question. Read the question again. Why is turbotax showing a negative number on that line in the itemized deductions summary?
Victoria, I forgot to add that turbotax did not do that last year. My state and local income tax plus real estate tax were way over $10k, but there was not a negative entry on the over $10k line.
On the summary page that negative number is just showing you that you exceeded the $10000 by that amount. The summary should show your total property taxes which includes everything and then a negative number that reduces it down to the $10000 limit.
To add, I noticed the same thing this year for 2020 taxes compared to 2019 taxes. My 2020 taxes shows a negative for the, "State and local taxes greater than $10,000" line, and comparing it 2019's within the latest tax software (Premier 2020) shows last year being $0.00. If I go in to the 2019 tax software and show the summary of this line it displays the negative number for 2019 appropriately.
This appears to be a software bug, when importing a prior year's tax document. Furthermore this bug is also in TurboTax 2020.
If in doubt, open the prior years TurboTax software to get the proper amount until this issue is addressed.
I am having the same problem and it’s affecting my return refund by almost $4000! I do not understand how to correct us. Can you please guide me.
Hi, where do you find the line to edit that zero 2019 error?
Are you comparing against 2019? When I did this for 2020, when comparing to 2019 it shows $0.00 for state and local taxes greater than 10k.. but when I open the 2019 software to view it shows the correct negative number. It didn't load my 2019 into the 2020 software correctly to demonstrate the comparison.. this is just comparing to last year and won't effect your taxes. If you're alarmed you're seeing a negative number, it's because it's capped at 10k. The negative is showing how much over the 10k you weren't able to claim because of the cap.
this doesnt make any sense... why am I receiving a reduced deduction for sales tax ?
$-1943 which moved me from refund to paying tax...
I do not understand but last year I will be using Turbo Tax
You're not receiving a reduced deduction. TurboTax just changed the way it shows summaries on the screen in this area of the software to better illustrate the difference between the amount used in the calculation ($10,000) and your actual tax (which must be 11,943). This is nothing but a display screen issue.
If it turns out that you are itemizing and not taking the standard deduction, this will be easy to see on your actual tax return itself when you print it and compare it to last year's return.
Above where someone else thinks this affects their return by $4,000, it doesn't, something else is causing that. this is just a change in the display - the function on the return itself hasn't changed at all.
Wow, is that incredibly mislabeled! My wife and I reversed engineered what was going on, and realised that it is the "state and local AND MORTGAGE INTEREST". In otherwords, the sum of those two lines is maxed at $10k.
Example 1:
Charity $300
Mortgage Interest: $18,200
Realestate Taxes: $9,000
State and Local Taxes: $12,000
State & Local > $10k: -$11,000
Total: $28,500
In reality, what is going on is:
Example 2:
Charity $300
Mortgage Interest: $18,200
Realestate Taxes: $0
State and Local Taxes: $10,000
State & Local > $10k: -$0
Total: $28,500
Notice that in example 2, the sum of Realestate and State & Local is capped at $10,000.
The line labeled "State & Local > $10k" should say "The amount you would have been able to deduct if Trump hadn't changed the tax code."
It is confusing. There should be an explanation of the negative number.
Thanks for sharing. It is not explained very well by TurboTax but it is correct. When I combined my State Income Taxes, Property Tax and Car Registration it added to the Negative number plus $10K. I wonder if that can carry forward.
I have that negative number on the step by step summary of deductions even though I am taking the standard deduction. It is not calculated in the total, but it is listed. Why?
The deduction for taxes on your schedule A (the form for itemized deductions) is only allowed to be $10,000 or less.
When you have more than $10,000 in deductions then your schedule A says "Total amount of deduction" and has all of the taxes that you entered and then a negative for the amount over $10,000 and then the allowed deduction for $10,000.
The negative number is just the amount that you're not allowed to deduct.
This is still a problem!! All I entered was 5,820 for property taxes. How is this greater than $10K ?
The State/Local tax section includes more than just property taxes. These are the line items in the State/Local tax section of Schedule A:
All of these items cannot exceed $10,000. Depending on your income, the state/local income tax amount may be enough together with the taxes that it puts you over the $10,000. The state/local income tax amount is not an amount you enter but an amount that TurboTax calculates based on the income you have entered.
Look at Line 7, what amount is on Line 7 of this section. That is the amount of Taxes You Paid that are deductible or go to the total of itemized deductions. If you have the standard deduction, this form does not matter.
Thank you. I did finally find that number and figured it out.
MSP3,
No wonder you're so confused. You even think Trump was the cause of the $10,000 limit. Ever hear of Pelosi and Co? How are things going now with your new man, Joe Inflation/Gas Prices/Afghanistan??
Why does my state and local taxes greater than $5000 show a negative amount?
Clearing up a confused person talking about others' confusion. Tax Cuts and Jobs Act, passed into law December, 2017, limited SALT deduction to $10,000. Sponsored by Rep. Kevin Brady (R-TX). Passed House and Senate with only (R) support (bipartisan votes against). Signed into law by President Trump 12/22/2017.
TurboTax needs a (?) icon next to the number for 2022.
Why am I getting a negative number when i took the standard deduction??? It is only supposed to add back over 10k if you itemize….
No, the negative deduction you see on your Deductions summary in TurboTax does not appear on your tax return and will not affect your final result.
The negative figure is the amount that would be backed out of your total state and local taxes to arrive at the allowed deduction for line 5e of Schedule A.
It appears on the Deductions summary if you entered more than $10,000 in state and local taxes, even if you end up using the standard deduction.