Question

Why did I got a negative deduction due to my state and local tax is greater than $10000

Forum|Forum|6 years ago
February 5, 2020
5 replies
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State and local taxes, including real estate taxes, are capped at $10,000 for itemized deductions. Regardless of the amount actually paid, you can only deduct a maximum of $10,000.

State and Local Tax Deduction

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J

jodiesel

Victoria. You are not answering the question. Read the question again. Why is turbotax showing a negative number on that line in the itemized deductions summary?

J

jodiesel

Victoria, I forgot to add that turbotax did not do that last year. My state and local income tax plus real estate tax were way over $10k, but there was not a negative entry on the over $10k line.

E

emilyg41

I am having the same problem and it’s affecting my return refund by almost $4000! I do not understand how to correct us. Can you please guide me.

K

kstorey68

this doesnt make any sense... why am I receiving a reduced deduction for sales tax ?

$-1943 which moved me from refund to paying tax...

I do not understand but last year I will be using Turbo Tax

A

Anonymous

@kstorey68

You're not receiving a reduced deduction. TurboTax just changed the way it shows summaries on the screen in this area of the software to better illustrate the difference between the amount used in the calculation ($10,000) and your actual tax (which must be 11,943). This is nothing but a display screen issue.

If it turns out that you are itemizing and not taking the standard deduction, this will be easy to see on your actual tax return itself when you print it and compare it to last year's return.

Above where someone else thinks this affects their return by $4,000, it doesn't, something else is causing that. this is just a change in the display - the function on the return itself hasn't changed at all.

M

MSP3

Wow, is that incredibly mislabeled! My wife and I reversed engineered what was going on, and realised that it is the "state and local AND MORTGAGE INTEREST". In otherwords, the sum of those two lines is maxed at $10k.

Example 1:

Charity $300

Mortgage Interest: $18,200

Realestate Taxes: $9,000

State and Local Taxes: $12,000

State & Local > $10k: -$11,000

Total: $28,500

In reality, what is going on is:

Example 2:

Charity $300

Mortgage Interest: $18,200

Realestate Taxes: $0

State and Local Taxes: $10,000

State & Local > $10k: -$0

Total: $28,500

Notice that in example 2, the sum of Realestate and State & Local is capped at $10,000.

The line labeled "State & Local > $10k" should say "The amount you would have been able to deduct if Trump hadn't changed the tax code."

K

KC562

Why am I getting a negative number when i took the standard deduction??? It is only supposed to add back over 10k if you itemize….

J

JulieS

No, the negative deduction you see on your Deductions summary in TurboTax does not appear on your tax return and will not affect your final result.

The negative figure is the amount that would be backed out of your total state and local taxes to arrive at the allowed deduction for line 5e of Schedule A.

It appears on the Deductions summary if you entered more than $10,000 in state and local taxes, even if you end up using the standard deduction.

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K

KC562

That is the problem....it directly affected the tax due amount by the exact amount being backed out....WHY??? Is it a glitch in turbotax? I was breaking even until turbotax backed out that number and now I owe that amount......doesnt make sense

D

ddranalli

I agree - the "State and Local Taxes greater than $10,000" showing a large negative number that isn't summed in the column is really confusing. TURBOTAX please fix this by removing that line from the column if it is not calculated or better explained on that screen. Very. very confusing.