Getting DeductibleMortgageIntIndrAmt is too small error during review process.

Forum|Forum|5 years ago
February 12, 2021
6 replies
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When running a review of my tax forms, it gives an error for Schedule C Form 8829, "DeductibleMortgageIntIndrAmt is too small."

This error is very cryptic and I can't tell what item needs fixing.

DavidRG13

I am getting the same error. It appears that the amount I entered is being formatted in Form 8829 as a negative number, which is causing the issue. Unfortunately, TurboTax is not allowing me to adjust the number on the form itself.

Anonymous

Working with tech support, I discovered that the issue is that a home office deduction cannot be taken when a business has a loss. So, the solution is to delete the home office credit completely. The IRS rules are that a home office credit can be taken only when a business has income. If a business has income but the home office credit is greater than the business income, the remaining home office credit can be rolled over to a future year.

The software has an error in that it attempts to input a negative number to offset the other business losses. Also, the description of the error is cryptic.

DavidRG13

That actually does not account for the error message. Even though you cannot take a home office deduction in a year where your business does not earn a profit, you should be able to determine the amount of the deduction and, as you say, carry it forward to another year. The software worked exactly that way last year, but this year, it is failing to do so.

As it has done in previous years, TurboTax should allow you to determine your home office deduction for 2020, then disallow it for 2020 if your business did not earn enough. It should then carry that home office deduction forward to next year. But if you delete the home office deduction entirely, TurboTax cannot compute the home office deduction to carry forward. For the tax year 2019, my business did not earn enough for me to claim a home office deduction. That amount was computed by TurboTax, though, and rolled forward to this year. In the 2020 version of TurboTax, the software has a bug and will not allow the return to pass its review. It is errantly putting a negative number in Line 10 of Form 8829, Deductible Mortgage Interest, which is causing the problem.

Anonymous

Your situation might be different if your business income was zero. In my case, a business loss, the home office deduction does not apply. I got this from IRS Publication 587:

Deduction Limit

If your gross income from the business use of your home equals or exceeds your total business expenses (including depreciation), you can deduct all your business expenses related to the use of your home.

eb01

I'm getting the same error message. I do show a profit on my business, however. Has anyone found a fix for this yet?

DavidRG13

I have been in contact with TurboTax for weeks, but I'm not getting anywhere. They continue to open "investigations," but nobody looking into this ever asks me any questions. Instead, they have sent me an e-mail saying, essentially, don't put a negative number in Line 10 of Form 8829, and then they closed the investigation. Of course, that is the very heart of the problem: I'm not putting a negative number that field; TurboTax is.

I managed to get them to open a second investigation, but they then sent me an e-mail telling me I need to speak with a CPA, and they again closed the case. In both instances, I ultimately found out that they concluded that this was not a programmatic issue. But it really is.

There is a very easy way to demonstrate this. Forget about the TurboTax interview, and simply go into Form 8829. Enter a zero in Line 10. Now enter a positive number in Line 16. You can see that TurboTax automatically places the negative of the number in Line 16 into Line 10, and it won't allow you to change Line 10.

None of this makes sense. Neither Line 10 (Deductible Mortgage Interest) nor Line 1 (Excess Deductible Mortgage Interest) should ever have a negative number. How can you have negative mortgage interest? It makes no sense.

I beg you to call TurboTax and tell them that you are having this issue. I think only if they begin to hear about this from multiple individuals will they do anything about it.

I have one question for you: what platform are you using? Windows? Mac? Online?

eb01

I was using Windows 10 and downloaded the software (not using the online version). Good news - I did find a solution yesterday which allowed me to file. Like you, I was never able to correct the negative number in the form. I tried to delete or make it 0, but the system wouldn't let me. However, after many attempts with this error, I clicked on my mortgage lender which was listed on the form as well. Once I had that field highlighted, it allowed me to delete the name of the mortgage lender and it fixed the problem. It didn't change the amount of my refund, so I don't think it deleted out the expense - just fixed the error. I hope this works for you as well.

Rob70021

I was having the same issue and couldn't understand why TurboTax was entering a negative number in the Mortgage Interest field. After an hour with tech support (who was great,) I finally realized that I was checking the boxes for my 1st and 2nd mortgages that says "Yes, include for this home office deduction." However, since I am taking the standard deduction, I should not check those. (Says so right above the boxes.) I was then entering the combined amount again under "Excess Mortgage Interest" a few pages later, where it says to do so if you are not itemizing deductions (taking the standard deduction.) It must have been subtracting it twice and causing the negative number. I started to notice that when I was experimenting with entering round figures for my mortgage interest (e.g. $10,000) and saw that it was deducting the combined amount from the two figures. (I didn't do all the math, but that's what tipped me off.) Hope this helps someone!

DavidRG13

TurboTax actually confirmed that there was a bug in their Mortgage Interest processing for Home Offices, and that have subsequently fixed it.

pvision

So, is there any sign Intuit plans on fixing this any time soon?

Joyfulpapa2

When reviewing the schedule c, for we realized that we didn't enter the "outstanding mortgage principal" amount. After we filled in that amount the error message went away.

tmartinbell

The correct answer is "Excess Mortgage Interest" specifically refers to the portion of mortgage interest that exceeds certain thresholds set by federal tax laws. If your mortgage interest is not over the threshold, regardless of not itemizing, do not enter anything in that field. This causes the negative mortgage interest deduction because the excess mortgage interest amount reduces the mortgage interest. You don't want that, unless you actually have a situation where your interest is over the threshold.
If you do have excess mortgage over the threshold, then enter the excess amount in that field. This amount will deduction for the mortgage interest.

LInk to IRS.gov

The key term is excess mortgage interest.

I am not a tax attorney, CPA or EA. I am a 10yr tax professional with an IRS certified PTIN and I am an employee with TurboTax.