Why is the SALT deduction use in TurboTax only 10K instead of 40K? I thought the One Big Beautiful Bill raise the SALT cap to $40K until 2029.

[VolvoGirl]

It did.   It’s working for me.   Haven’t heard anyone else posting about that.  Are you using the Online version or the Desktop program?   If Desktop be sure to do an update.  Go up to Online - Check for Updates.  

[phiphong178]

I'm using the online version. Once I completed inputting all my information, I did a federal review and asked the software to explain in detail why I'm getting the refund amount. Below is the message the software explain pertaining to the SALT:

"In 2024, you deducted $25,646 in state, local, property, and sales taxes, but only $10,000 is deductible this year due to a cap on these taxes."

That's why I'm wondering why the software telling me the SALT cap is $10K this year.

[VolvoGirl]

@phiphong178   I just found out that Schedule A line 5 is limited if you have a high income.  If your AGI on 1040 line 11b is over 500,00 (250,000 for married filing separately) you have to fill out the State and Local Tax Deduction Worksheet to figure the amount to enter online 5e.  Do you fall into that income level?  

[bayrunner]

I'm getting the same message but when I look at  the actual deduction that turbo tax is saying I have, it is clearly not limited to $10,000 , so I think it is a typo and just not updated.  I could be wrong, but that Is what I think

Bayrunner

[kunalpradhan]

some bug in app. it says you have reached $10000 limit.

- it should gradually phase out for above $500k

- it should be $40k below $500k

[RobertB4444]

The deduction has an income phaseout floor of $500,000.  30% of anything over $500,000 is used to reduce the deduction.  The deduction can never go below $10,000.

So if you make $600,000 the deduction returns to 10K.  Anything between 500K and 600K will have a phaseout amount.

@kunalpradhan 

[dolfinbill2]

I have the Turbo Tax Premier desktop version, I just updated it to the latest updates and it is still limiting my SALT deduction to 10,000. I don't know how to change it. The answer I keep getting is the it should be 40,000 but it is not on my software.

[DianeW777]

As indicated by @RobertB4444 the SALT deduction can be limited if the income is high. Please confirm if you are under the limit and if so, you can choose to utilize sending us a file. 

If you would like to send us a “diagnostic” file that has your “numbers” but not your personal information it would help.  If you would like to do this, here are the instructions:  (Don't forget to give us the state)

TurboTax Online:

Open your return -Go to the menu panel on the left side of your return and select Tax Tools. 

1. Then select Tools below Tax Tools.
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent.
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number.
5. Reply to this thread with your Token number and your state. This will allow us to open a copy of your return without seeing any personal information.

TurboTax Desktop:

If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:

1. Click on Online in the top left menu of TurboTax Desktop for Windows
2. Select 'Send Tax File to Agent'* > Follow the prompts to reach the token number.
   • Enter your email used for TurboTax > Enter your code > Send
3. Write down or send an image of your token number and state then place in this issue.
4. We can then review your exact scenario for a solution.
5. Please also tell us any states included in the return. This is necessary for us to view the return.
   • *If using a MAC, go to the menu at the top of the screen, select Help, then, 'Send Tax File to Agent')

We will be able to see exactly what you are seeing and we can determine what exactly is going on in your return to provide you with a resolution.

[tnone2024]

I have the premier desktop too, and just completed my returns today. I am getting the full $40k deduction in the return (because I paid a ****load of estimated state tax), but parts of the help docs still say 10k. The online Intuit AI agent says it knows about the out of date docs on this topic. If rebooting, restarting, updating does not fix it for you, I'd consider creating a new return. 

I was certain that 40k deduction had to be an error in TT, but after some digging I see the intent is to prevent double taxation by offsetting some state taxes. If you are getting this deduction due to capital gains, you will likely also get an extra 3.8% tax on some of that. 

[dolfinbill2]

Thanks for that information, I guess it is just the help documentation that is incorrect. 

[JWL2672a]

This is a major bug in turbotax.  I don't want to be told that my limit is capped at $10k when it should be $40k.  Yes, I barely graze $500k+ MAGI but I have zero confidence that turbotax is calculating my deductions correctly.

I deleted my property tax deduction and it didn't change the number at all.  I haven't even started on the other deductions so how did I cap out on $10k? So far, my only deductions entered is mortgage interest.

Does the program already factor in the state tax I owe and already deducted that?

[JWL2672a]

This doesn't help me.  My MAGI is $502,000 and I AM itemizing.  So why does the program not deduct more than $10k? I have no other deductions entered yet related to SALT and yet deleting my property tax paid doesn't change the calculation at all.

[JWL2672a]

I don't want to speculate and I need a turbotax tech expert to confirm.

But I think what is happening is that the software is already using your W2 state and local taxes withheld and auto-deducting that even before you get to the Deductions & Credits section.  My state and local is $42k so this eats the entire $40k deduction.  This is why entering anything new for me does not change the refund amount.

Someone please confirm this cause I am NOT losing out on $30k of tax deductions.

EDIT: Yes, this is the answer.  After reviewing Form Schedule A and the SALT worksheet, it IS already deducting and phasing out a portion of the $40k for me.  So I am getting roughly $37k of SALT this year.  The program IS calculating it correctly despite the stupid warning message that I maxed out ONLY $10k.

[VolvoGirl]

There was a display error earlier in the year.   But over 500,000 (for Joint) it should phase out to 10,000 minimum.   Will this help?  Turbo Tax blog SALT Deduction Explained

https://turbotax.intuit.com/tax-tips/tax-deductions-and-credits/salt-deduction-explained-limits-elig...