Why is Turbo Tax limiting my Itemized Deductions to $10,000 for Federal Return?

[ryan19]

I have itemized deductions that total an amount higher than the standard deduction, however TurboTax is limiting that amount to $10,000. Is this an error? This is happening before I even get to State Taxes. This is happening in the federal deductions.

EDIT: For more information, I have Mortgage Interest well over the standard deduction. When I go to check out my mortgage information in TurboTax, it is saying I have $0 in interest. I believe this is an error. How do I get this fixed?

[VolvoGirl]

What kind of deductions do you have?  Do you know there is a max 10,000 limit (5,000 MFS) of property tax and state taxes "SALT".  SALT is State And Local Tax.  Which includes property tax, any state tax paid like for last year’s return and includes any state withholding from your W2s and any 1099s you have. And any taxes in W2 box 14 and 19 like SDI or VDI. You can only deduct up to 10,000 (5,000 MFS) for SALT State and Local Taxes.

And you can only deduct Medical that’s over 7.5% of your AGI.  Also the deduction for job expenses have been suspended.

[VolvoGirl]

See these 2 FAQ 

FAQ on changes

https://ttlc.intuit.com/community/tax-reform/help/how-will-tax-reform-affect-my-federal-tax-return/0...

Deductions that have been suspended for 2018-2025

https://ttlc.intuit.com/community/tax-reform/help/which-federal-tax-deductions-have-been-suspended-b...

[ryan19]

Yes... My mortgage interest alone is higher than the standard deduction. Plus a few other items.

[ryan19]

Am I correct in assuming, I should be able to add my SALT to my mortgage interest, plus donations, etc. and that would all total my itemized deductions? Right now it's only giving me SALT and donations.

[AnnetteB6]

Yes, you are correct in assuming that your mortgage interest, plus SALT, plus donations would typically be the total of your itemized deductions.  

That being said, go back through your mortgage interest section and double-check that you have indicated that the mortgage is secured by your residence.  This is something that is easily missed and will automatically make your mortgage interest not deductible.  

Also take a look at the following TurboTax article which will give you more information about deducting mortgage interest and instances where it might not be fully deductible:  Can I deduct my mortgage?

@ryan19

[VolvoGirl]

There is a new question or two you have to answer to get the mortgage interest deduction.  Like maybe put in your ending balance.  Make sure you answer that the loan is secured by the property.  Go back through that section.

[ryan19 · Accepted solution]

Solved... Went through mortgage interest section again. The very last question is confusing. It asks what my "Adjusted Amount" would be.  I initially entered $0, because I had no adjustments. Entered the full mortgage interest in and now TurboTax is calculating properly.

Thank you to both @VolvoGirl and @AnnetteB6 who led me to the resolution!

[danobegood]

I had to delete the entries (main loan and HELOC) that were automatically populated as an information carryover from last year.  Once I did that and re-entered as new entries my mortgage interest was accounted for correctly.

[Cynthiad66]

Some TurboTax customers are experiencing an issue with their Home Mortgage Average Balance. This can cause in the the Home Mortgage Interest to be incorrectly limited.

If you're experiencing  the issue above,  please go here to receive email notifications when any updates related to this issue become available.

New: retroactive for 2018 and 2019 also, MIP is deductible again. Mortgage Insurance Premiums, see Changes to the Deductibility of Mortgage Insurance Premiums (MIP) | Internal Revenue Service (irs.go...

[edited 2/11/21 | 12:12 pst]

[Clint P]

Check your prior years' filings. I missed claiming this state deduction in 2018 & 2019 because TT doesn't pull it through if you opt for standard deductions on the Fed. You have to manually add it through an "adjustment" (per previously posted "solved"). This is stupid. TT should do the analysis on both the Fed and State with the data you input. Just because it's better to claim standard in the Fed doesn't mean it is for the state.

My CPA just caught this and I'm going to re-file. 

[ElliotM1]

Thanks, this was the solution for me, from @AnnetteB6. https://ttlc.intuit.com/community/taxes/discussion/re-why-is-turbo-tax-limiting-my-itemized-deductio...

The way the prompt is phrased is misleading, suggesting the loan would be secured by "another" property if checking Yes: "Yes this loan is secured by a property of mine". 

TurboTax defaulted to the response "No, my loan isn't secured", which seems like the least common response. My 1098 has box 7 unchecked but my address in box 8. I wonder if TurboTax selects No by default if box 7 is unchecked on form 1098. 

[dw67]

VolvoGirl your links in this posting don't work the first one gets an access error

"You do not have sufficient privileges for this resource or its parent to perform this action."

and the second one fails "We're sorry, we can't find the page you requested."

[dw67]

Cynthiad66 your link to the IRS website returns a 404 page not found error.

[VolvoGirl]

@dw67  You have added on to a very old thread.  I know they change the links every year.   What is your question?