Form 8829 line 10 standard deduction problem

Forum|Forum|5 years ago
April 19, 2020
3 replies
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Hello all,

My wife has an at-home business for which we take the home office deduction. I noticed a problem with Form 8829 that I cannot resolve. TurboTax Home Business (desktop version) is putting the mortgage interest and mortgage insurance on line 10 even though we are taking the standard deduction. I happened to read the IRS instructions for Form 8829, and it explicitly states that if you are taking the standard deduction, DO NOT put mortgage interest and insurance on line 10, nor real estate taxes on line 11. But that is what TurboTax is doing! Help!

Best answer by Richard Forster

Instructions for Form 8829 from IRS say that mortgage insurance premiums for those not itemizing deductions will also go to Line 16 excess mortgage interest. In TT, do not use the mortgage premium screed to enter this number, but instead, add it to the interest you are reporting as excess mortgage interest.

I agree with you that this matter is not well explained. This problem should flag once the final decision is made whether to itemize or take the standard deduction.

Hope this helps

Richard Forster

I wonder whether this has something to do with the presence of Schedule A in the return even though program selected the standard deduction as the best alternative

Richard Forster

Further answering -- Check to see if you checked the "YES" box when you first entered mortgage interest. If you are not itemizing, but rather taking the standard deduction, the box should be unchecked. This will force the entry of all your mortgage interest in response to the later excess mortgage interest question that puts an entry into Line 16 of the 8829.

taliesiniiAuthor

Richard,

You are correct. I called TT directly after I posted this and got it straightened out. This is the first moment I've had to get back here and post an update. When taking the standard deduction, you should NOT check the box to include the 1098 from your mortgage company. Later on TT will ask about excess mortgage interest and excess real estate taxes and that's where you enter the info from the 1098. I've never had this situation before, and never have excess interest or real estate taxes, so I breezed through those questions and missed the bullet point about still entering them if you take the standard deduction. I still have to figure out where to enter the mortgage insurance, because it's still ending up incorrectly on line 10 at the moment.

What brought this about in the first place is the fact that TT asks for all of the business stuff before asking about personal stuff and before determining whether to itemize or take the standard deduction. What is troubling about the whole thing is that TT did not throw a flag at the end of the return when it ran the smart check or whatever it's called. I only discovered it by accident when I went back to check something else and decided to read the IRS instructions on form 8829. TT really should have caught that. Anyway, mostly fixed now. I will say, the person I got on the phone when I called TT was immensely helpful.

Richard ForsterAnswer

I agree with you that this matter is not well explained. This problem should flag once the final decision is made whether to itemize or take the standard deduction.

Hope this helps

georgio

Thank you for this post. I'm having this same problem in 2023 (after stumbling upon the IRS instructions right before I'm about to file) and it looks like TT has been doing it wrong on my taxes for years. This is a major fail. It implies it will handle it all automatically and it doesn't. Unless you hit "learn more" next to each line item, it never says this isn't allowed if you're taking the standard deduction. I will send feedback this year and hope they fix it. Not sure why such an obvious error doesn't come up in their "smart check". Makes me worried about everything else.

KrisD15

Does the expense carry to Form 8829 line 14?

Is anything reported on line 16 and line 17?

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georgio

Yes to line 14, No to line 16/17... which may be correct if you itemize, but TT has chosen the standard deduction for me.

However, if you enter the amounts in the "Excess" fields on the worksheet mentioned above, it then correctly puts them on 16/17 instead of 14.

The problem is it implies it will handle it automatically, doesn't warn you if it later chooses the standard deduction for you, and generally has very poor explanation in the home deduction step by step. 🙂