Question

My property taxes were $2700 in 2020. I itemize. TurboTax is giving me a 10,000 credit and says my deduction is capped. Why is it saying 10,000 when I only paid 2700?

Forum|Forum|5 years ago
January 31, 2021
2 replies
0 views

I understand that 10,000 is the limit under SALT. But when I only paid 2700, I don't understand why I am getting a 10,000 credit

TurboTax Deluxe Online

macuser_22

Employee

Review your entries. You might have typed 27000 by mistake.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

P

penfoldpaulAuthor

Good point, but I didn’t enter it wrong. It’s says “you have now maxed out the federal $10,000 deduction for itemized state and local taxes. Combined with your state and local tax deductions, your $2700 property tax deduction reduced your income by $10,000, which lowered the tax you owe”

Anyway, I still don’t know how paying $2700 gets me a full $10,000 credit. Any advice would be appreciated!

C

Centavo

Yes this is what I am getting to when I have only entered 953. Its not letting me count my donations either.

M

MegaM

Was this question ever answered ? I have the same question this year.

I purchased a home in late 2021, but I did not being paying property taxes until early 2022. Despite me answering in the TT software that I did *NOT* pay property taxes... TurboTax is saying I have maxed out the $10,000 deduction.

Can anyone explain this?

SteamTrain

Employee

The 10,000 Max refers to the total of property taxes PLUS any state income taxes.

So if your state income taxes paid during 2021, either thru withholding, or thru quarterly estimated payemnts.....if that total exceeds already exceeded 10,000, then you've already reached the max even though you haven't entered any property taxes. Like, state withholding already entered with W-2, W-2g or 1099-R forms entered in the Wages&Income section.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

M

MegaM

Thanks for the quick reply. As I continued reading through the instructions for Schedule A, line 5a, I was pretty sure this was the answer.

My W-2 does show state income taxes beyond $10k and I have not entered this on any other forms, so was hoping this was why. I don't think I've ever itemized deductions before, so this was new to me.

Thanks for confirming my suspicions! Appreciate it.