$40k SALT deduction not accounted for properly

4 replies
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Hi,

I am having an issue with the new $40k limit for the SALT deduction. TurboTax is selecting the Standard Deduction for our returen, but our state and local W-2 withholdings are about $29k and the property taxes are around $15k. This combines to $44k, but we should get the $40k limit, correct? I have checked our W-2 information and my property tax information that was entered in TurboTax Premier (Windows desktop version).

Yes, I automatically update the software each time I use the software

How do I resolve this issue?

Regards,

Don

DavidD66Answer

Alumni - Intuit

It may be because your income is too high. The $40,000 SALT deduction begins phasing out when your Modified Adjusted Gross Income (MAGI) is over $500,000. The deduction amount is reduced by 30% of the amount in excess of $500,000. The deduction hits a $10,000 floor when your MAGI hits $600,000.

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DavidD66Answer

Alumni - Intuit

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dws1nzlAuthor

Level 2

Sorry, I forgot to mention that our MAGI is well below $500k.

DavidD66

Alumni - Intuit

The program's default is to use whichever one is higher: itemized deductions or the standard deduction. There is an option to switch/choose the other one at the end of the deductions section. I suggest you go through that section and check and make sure you didn't somehow make that selection.

It sounds like you're using the TurboTax Desktop program. If that's the case, and you didn't inadvertently indicate you wanted to take the Standard Deduction, I suggest you go to Forms view and review your Schedule A and the Tax & Int Wks. This will allow you to see what amounts are entered and transferring to you Schedule A.

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