Wrong value for nontaxable income (housing allowance) used on Tax and Interest Deduction Worksheet

[WA_Paul]

I am a pastor. I have a housing allowance of $30,000. My actual housing expenses were $59,927 (I had some major repairs this year). On line 1 a (2) of the Tax and Interest Deduction Worksheet, TurboTax calculates "Nontaxable income entered elsewhere on return." TurboTax entered $59,927. This appears to be the wrong value. The value for this field should be MINIMUM(Housing Allowance, Actual Housing Expenses). Instead, it is using MAXIMUM.

For the Housing Allowance, any part that is not used for actual housing expenses is considered taxable. Additionally, the most that can be written off as non-taxable is the Housing Allowance, regardless of whether actual expenses exceeded the Housing Allowance. Thus, it appears this field is being calculated incorrectly by TurboTax.

In looking at past tax returns, I noticed that this value was correctly calculated in 2017, but has been incorrectly calculated in subsequent years. Has anyone else noticed this?

[AmyC]

You should be getting the minimum. We would like to look into this. If you are willing to reply with a token number so that we can, it would be appreciated. To get a token:

If you are online, go to tax tools>tools > share file with agent > 6 digit number pops up.

If on desktop, go to online >send tax file to agent > number pops.

Reply with it here.

[WA_Paul]

919364

[WA_Paul]

I'm not familiar with how this works. I shared my file (token #). Will I get a reply as to when it has been looked into? Or do I go back and periodically recalculate my sales tax deduction to see if it has changed?

Thanks in advance for your guidance.

[SusanY1]

It will take a little time for someone to work with the file that the token generates, but I can see that someone has it.  Once the agent has had time to work with that file, she will reply back to you here.   Thank you!

[AmyC · Accepted solution]

Thank you! You are correct about the rules. The program is carrying everything through correctly as designed by the program. I do see where you entered actual expenses rather than the "lower of" as the question mark beside the box for qualifying expenses asks. Please return to your w2 form and continue through until you reach the screen that says Ok, tell us about your clergy housing and enter the $30,000 as qualifying expenses. Your tax remains the same but those forms will be corrected. 

[WA_Paul]

Thank you Amy! I apologize for causing you unnecessary work. I'm usually pretty good at reading all the helpful tips, but I missed this one.

Suggestion: since TT knows what the Housing Allowance is, maybe there could be check added that makes sure the value entered for qualifying expenses doesn't exceed the Housing Allowance.

Thanks again!