Tax Prep (Turbo Tax) - State sales tax deduction issue

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Valdeselad
Posts: 186
Joined: Mon Apr 26, 2010 1:42 pm

Tax Prep (Turbo Tax) - State sales tax deduction issue

Post by Valdeselad » Thu Feb 18, 2016 12:40 pm

I am running into an issue with Turbo Tax that is stumping me. When I go through the state sales tax deduction section, it tells me I will receive a deduction after inputting that i live in TX (no income tax) and give it the sales tax rate. However, when the wizard completes, the 'tax owed' does not change.

I itemize and everything else (best I can tell) seems to be flowing through properly. Is there some kind of phase out on the state sales tax deduction? I've gone through the wizard several times adding the information and then deleting it back out but nothing changes.

Thanks for the help.

Wagnerjb
Posts: 7198
Joined: Mon Feb 19, 2007 8:44 pm
Location: Houston, Texas

Re: Tax Prep (Turbo Tax) - State sales tax deduction issue

Post by Wagnerjb » Thu Feb 18, 2016 12:52 pm

Are you in an AMT paying situation? In that scenario, any additional state sales tax won't impact your liability.

Best wishes.
Andy

Valdeselad
Posts: 186
Joined: Mon Apr 26, 2010 1:42 pm

Re: Tax Prep (Turbo Tax) - State sales tax deduction issue

Post by Valdeselad » Thu Feb 18, 2016 1:08 pm

Wagnerjb wrote:Are you in an AMT paying situation? In that scenario, any additional state sales tax won't impact your liability.

Best wishes.
No, I am not paying the AMT this year as far as I can tell.

ETA: I think you are correct...looks like the AMT is hitting me much harder that I realized/expected. Ouch.
Last edited by Valdeselad on Thu Feb 18, 2016 2:12 pm, edited 1 time in total.

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Puck
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Location: Texas

Re: Tax Prep (Turbo Tax) - State sales tax deduction issue

Post by Puck » Thu Feb 18, 2016 1:17 pm

You might try looking at schedule A in forms mode. Make sure the tax amount shows up on line 5b... then scroll to the bottom to see if you're anywhere near the the limitation amount for Itemized Deductions as a whole. You can click the Quick Zoom button to get to the Itemized Deductions work sheet.

Puck

Valdeselad
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Re: Tax Prep (Turbo Tax) - State sales tax deduction issue

Post by Valdeselad » Thu Feb 18, 2016 1:36 pm

Puck wrote:You might try looking at schedule A in forms mode. Make sure the tax amount shows up on line 5b... then scroll to the bottom to see if you're anywhere near the the limitation amount for Itemized Deductions as a whole. You can click the Quick Zoom button to get to the Itemized Deductions work sheet.

Puck
Thanks Puck...I believe to see the forms I have to go to the end, pay, and then I'll have access. I'm not quite ready to do that given that I can't get comfortable that my return is currently accurate.

ETA: Puck, I did what you said and it does show up on line 5b....I think it's an AMT issue.

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Puck
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Location: Texas

Re: Tax Prep (Turbo Tax) - State sales tax deduction issue

Post by Puck » Thu Feb 18, 2016 2:21 pm

Hmmm...

Okay. A learning opportunity option would be to print a blank Schedule A from the IRS website and fill it out by hand. Unless the TT online version of the step-by-step is drastically different from the download or CD version, the numbers should be readily available.
https://www.irs.gov/pub/irs-pdf/f1040sa.pdf

Then get the Schedule A instructions and fill out the worksheet on page 13. Typical IRS speak, so it's not easy to convey the idea in a forum post.
https://www.irs.gov/pub/irs-pdf/i1040sca.pdf

OR -- just look at the worksheet to see if your AGI is high enough to limit the amount of Itemized deductions you're allowed to take.

ETA... was typing while you were editing. :D

sport
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Re: Tax Prep (Turbo Tax) - State sales tax deduction issue

Post by sport » Thu Feb 18, 2016 2:35 pm

Are you itemizing deductions or using the standard deduction? If the std deduction is larger than the total of your itemized deductions, you use the std deduction as that will minimize your taxes due. If you are using the std deduction, there is no extra credit for sales taxes paid.

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