real estate taxes in Turbotax


E

Etienne

Hi,

Just started doing my taxes in Turbotax Deluxe, online. Have been using
Turbotax for the last 5 yeast (PC version).

I am itemizing deductions, but when I enter my real estate taxes paid, my CA
state taxes due are reduced, as expected, but there is no effect on Federal
taxes due, which seems odd.

Any idea what the reason could be?

Thanks all,

Etienne
 
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M

Mark Bole

Etienne said:
I am itemizing deductions, but when I enter my real estate taxes paid, my CA
state taxes due are reduced, as expected, but there is no effect on Federal
taxes due, which seems odd.

Any idea what the reason could be?
Have you already entered all your other potential itemized deductions?
Results won't be meaningful until you do.

What is your federal standard deduction, including real estate tax
amount for 2008? This is based on your filing status and whether
you/spouse are age 65 and/or blind.

Most likely explanation is you're using federal standard deduction and
CA itemized deduction. You might also be hitting itemized deduction
limitations due to AGI, which are different for federal vs. California
(I don't remember the details of which items on Schedule A are limited
by what percent).

-Mark Bole
 
P

Phil Marti

Etienne said:
Just started doing my taxes in Turbotax Deluxe, online. Have been using
Turbotax for the last 5 yeast (PC version).

I am itemizing deductions, but when I enter my real estate taxes paid, my
CA state taxes due are reduced, as expected, but there is no effect on
Federal taxes due, which seems odd.

Any idea what the reason could be?
You're looking at a number that is worthless until the return is complete.
Ignore it.
 
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B

Bob Sandler

I am itemizing deductions, but when I enter my real estate taxes paid, my CA
state taxes due are reduced, as expected, but there is no effect on Federal
taxes due, which seems odd.

Any idea what the reason could be?
The two most common reasons that your federal tax does not
change when you put in a deduction are the following.

1. As Mark Bole suggested, your total itemized deductions
might be less than your standard deduction, so TurboTax uses
the standard deduction because it gives you a greater tax
benefit. If this is what's happening, your federal tax might
change if you enter a very large deduction - large enough to
make the total itemized deductions more than the standard
deduction.

2. You might be subject to AMT (Alternative Minimum Tax), in
which case many itemized deductions, including real estate
taxes, are disallowed. No matter how much you add to these
deductions, your federal tax doesn't change because the
deductions are disregarded. If there is an amount on line 45
of your Form 1040, that indicates that you are subject to
AMT. You may find that if you add a deduction, the amounts
on Form 1040 lines 44 and 45 will change, but one gets
higher while the other gets lower by the same amount, so
your total tax on line 46 does not change.

Bob Sandler
 

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