Property tax deduction for home office

[richnorris54]

I have a home office in my main home and included the total property tax paid on this main home under the home office details.ie, mortgage payments, insurance, utilities, property tax paid, etc. by including there it has increased my total property tax paid line item by an equivalent amount. this doesn't seem right, should I not be entering main house property tax paid under the home office itemized list?

[timmourtax]

how do I remove it from the deductions and credits section?  Is this under personal deductions?

[MichaelDC]

1. Open (continue) your tax return.
(To do this, sign in to TurboTax and click the orange Take me to my return button.)
2. In the search box, search for the exact phrase real estate, taxes (include the comma and space) and then click the "Jump to" link in the search results.
3. Answer Yes to the question Did you pay property taxes in 2016?
Edit or remove your real estate taxes on the next screen.

[timmourtax]

When I enter real estate, taxes in search box, I don't get a ""jump to link" with question "did you pay property taxes in 2016?"  If I go to personal deductions, property tax, edit, it doesn't allow me to edit there.  What do you suggest?

[albanta56]

Go to personal deductions, mortgage interest section.  Hit on your main lender.  Under lender it will ask how much interest paid, and at the bottom it says Property taxes paid.  Back it out there.

[MichaelDC · Accepted solution]

Yes, enter your property tax and mortgage interest in the Home Office and remove it from the Deductions & Credits section.

TurboTax will then automatically calculate how much of this taxes and interest can be deducted for your home office. It will also add any remaining interest to Schedule A. See and example below.

Let's say you lived in the same home all year, and you used your home office all year. Let's also assume your home is 2,000 square feet and your home office is 200 square feet, so your office is 10% of your home. (See the attached screenshot below. Click to enlarge.)

You have a Form 1098 with $6,000 of mortgage interest in Box 1. Since your home office is 10% of your home, 10% of your interest, or $600, can be deducted on your home office. (See the attached screenshot below. Click to enlarge.)

If the "Yes, include for my home office deduction" box for your lender is checked, we'll assign $600 to your home office and automatically put the remaining $5,400 on your Schedule A as an itemized deduction. (See the attached screenshot below. Click to enlarge.)

You might ask yourself, "Well, I get the total $6,000 as a deduction even if I enter the whole amount as an itemized deduction. Why should I bother doing it here?"

The answer: Taking the part you're entitled to on your home office can help you save even more money on your taxes.

Here's why: Any amount you're allowed to deduct on your business not only reduces your income tax, but also reduces your self-employment tax. That's more money in your pocket!

[edited 3/1/2017 to include screenshots]

[jackineal10]

where does it ask the question "Include for my home office deduction" - I looked in the home office section and the Sched A mortgage interest section.  Thanks

[MichaelDC]

Thanks for the feedback. Tell me if the new screenshots are a help.

[jackineal10]

I must be dense.  Where is the check box to select YES?   I assumed that I'd enter total mort interest on the home office section first and the % that isn't home office would magically appear on schedule A mortgage interest.   Thanks for your help.

[MichaelDC]

You're perfectly correct. Although if it's an office in the home for your W-2 employment, the entire the mortgage interest and property will be in their normal Schedule A locations. Schedule A is where all the employment expenses end up anyways. If some of the interest were to be taken to the home office there, it would be subject to the 2% AGI limitation which wouldn't be helpful.

[amforest329]

If you don't put the mortgage interest in under personal, it won't allow you to put it in under home office - just FYI

[jackineal10]

Since my lenders were already transferred from 2015 to 2016 - it is not asking the question anymore about "Yes, include this in my Home office deduction".  Should I just DELETE both lenders and re-enter them under the home office section?  Currently the TOTAL interest is listed in both places - Home office section and Schedule A (which seems like I'd be double dipping that deduction)  thanks

[MichaelDC]

Yes, that's the standard fix. Let me know.