TTax not including additional sales tax, IRS website does

Feb 05, 2009 2 Replies

TurboTax calculated the sales tax that I can deduct using the tax tables. Then I went back and Revisited the Sales Tax deduction to add the taxes paid on a remodeling project. Turbotax wouldn't let me enter it via the interview, but I found my way to the "Tax and Interest Deduction Worksheet" and entered the numbers there. Never-the-less, TurboTax ignores the additional number in the totals. The IRS website Tax Deduction Calculator does include the additional taxes paid and adds that number to the value that TurboTax insists on. Looks like a bug in TurboTax.



I posted that note to the TurboTax support community on January 31 but so far no replies.



Bernie


I had a similar problem with Turbox 2008 and found this explanation in the help file for the Interest and Tax Deduction Worksheet:

Basically it will ignore the amount you put in if the sales tax rate for the item is different than the general sales tax rate and the amount of tax you enter is more than a $1 than the cost times the general (total state+local) rate you entered earlier.

In my case this occurred because my general rate changed during the year and I needed to compute and enter a blended or prorated value for general rate -- which is exactly what the IRS website Tax Deduction Calculator did when I tried it and what is says in Publication 600. However, at the time I did the actual remodeling, the sales tax was higher than the computed general value I had entered, so the program ignored it (which is a bug in my opinion).

The simplest workaround is to make sure that the general rate agrees with rate and amount you enter when adding the individual item (i.e. use the blended rate or the higher rate both places).

You didn't provide enough information for me to tell if you're in a similar situation, but I thought it might be. Hope this info helps.

-Martin

Thanks for the information. That last sentence in the Help is confusing, even with your explanation, but I think it is the reason TurboTax ignored my information. Strange way for TurboTax to handle the situation and not even give a warning!

I now see that the sales tax I was charged and that I put into TurboTax must have only covered the materials and not the labor. The sales tax was actually $96.07, but if the tax rate had been applied to the total charges they would have come to $201.18.

With your explanation I can now see that since the difference between those two numbers is more than $1 TurboTax ignored it altogether!!!! No warning!!! If I hadn't noticed that the deduction amount hadn't changed when I put in the taxes for the remodeling then I wouldn't be getting credit for it at all!

Bernie

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