TurboTax 2025 Property Tax and SALT $40,000 limit

[waltherpp7]

Hello,

The new 2025 SALT was raised from $10,000 to $40,000.  However, it doesn't appear that TurboTax 2025 is deducting my property taxes along with my State and Local Taxes.   Is this an error?   My Federal Taxes owed doesn't seem to have changed from last year and the raising of the SALT to $40,000 was suppose to allow me to deduct my $8,000K property taxes in addition to my wife's and my combined CA State Taxes which totaled above $10,000 already.

How do we get this corrected?   I already updated TurboTax 2025 with the latest downloads as of 3/15/2026 and it still doesn't appear to be adding my property taxes to the SALT deductions.

[dmertz]

Many people on this forum who think that TurboTax is not calculating the SALT deduction correctly are failing to realize that their MAGI for this purpose is high enough to reduce the amount of their SALT deduction.  This deduction phases down from $40,000 ($20,000 if Married Filing Separately) to $10,000  ($5,000 if MFS) between $500,000 ($250,000 if MFS) and $600,000 ($300,000 if MFS) of MAGI.

[rjs]

You can't draw any conclusions about deductions from the amount of tax that you owe. You have to look at the deductions themselves. Look at your Schedule A in forms mode. Look at the actual tax form, not a summary screen in TurboTax. What are the exact amounts on Schedule A lines 5a through 5e, 6, and 7? Is the box checked on line 5a to the left of the amount?

Between line 5e and line 6 there is a State and Local Tax Deduction Smart Worksheet. Are there any entries in that Smart Worksheet? If so, that is the phase-down that dmertz is referring to.

[cvonk]

Thanks @rjs .  My Schedule A line 5e caps the SALT to $10,000.

The problem is that "Schedule C line 11b" keeps using the full amount for Real Estate Taxes.

This causes the Smart Check to complain with: "SALT Amounts for real estate tax deductions are limited to a combined total of $40,000 ($20,000 if Married Filing Separately)" 

How do I get past this?

[AmyC]

I agree with the above posters. Let's look at the rules:

Schedule A (Personal): The SALT cap ($40,000 for 2025) applies to taxes paid on personal-use property (like your primary residence) and state income taxes. However, if your Modified Adjusted Gross Income (MAGI) exceeds $500,000 ($250,000 if MFS), the cap is phased down by 30% of the excess until it hits a floor of $10,000. If TurboTax is capping you at $10,000 on Schedule A, it’s likely because your income level has triggered this phase-down.

Schedule C (Business): Taxes paid in the course of a trade or business are not subject to the SALT cap. They are fully deductible as business expenses. This is why you see the "full amount" on Schedule C line 11b.

If your income is below $500,000, you need to contact support.  @cvonk

[cvonk]

Thanks @AmyC . 

• Yes, I understand why we got capped to $10k on my Sched A.
• Agree that Sched C should have the full amount of real estate tax.  In my case that is $35,043 . However when I entered that for Sched C line 11b, TurboTax flags it an error (see below) even though we're filing jointly. 
• I tried different amounts, and TT seems to be OK with $20,000 or under.  I double checked that we're filing "married jointly".

The error is: "Schedule C - Form 8829: Line 11b SALT Amounts for real estate tax deductions are limited to a combined total of $40,000 ($20,000 if Married Filing Separately."

[BillM223]

Have you completed (by hand) the worksheet for line 11 on the 8829, as seen in the 8829 instructions on page 4?

I don't have your numbers or else I would have done it myself. But I do wonder if this worksheet can shed any light on your error message. Also, do you have numbers in both columns a and b on line 11?

[cvonk]

Thanks @BillM223,

I can't find something on that worksheet that carries over to 8829 line 11.

However, in the 8829 instructions on  the bottom right of pg 3, I did find

"Real estate taxes reported on line 11. If you are claiming the
standard deduction, do not report an amount on line 11."

Because SALT was capped at $10k, I am claiming the standard deduction.

Currently, 11a is blank, and 11b has $35,043.  TurboTax flags the $35,043 as an error, but does allow me to put $20,000 there. Should I make this $0 because of the 8829 instructions for line 11?  If so, should line 17 be 0 too?

Thanks,