Thanks for your interest!

Yes, married filing separate (mfs), sorry for use of the acronym to describe the issue.   The taxpayers live together, they are filing separately for non-tax reasons (student loan related) 

taxpayer and spouse are both itemizing.   They had over 40K in taxes paid.  They made 576,000 on a joint return.   I believe each person should get to deduct $11,400 due to the income limitation, ($20,000-8600).   The software is starting with 40K and subtracts 8,600 to arrive at 31,400 and allows each taxpayer 15,700.   Not correct in my understanding.  

I believe Lacerte knows about this based on a customer support call that wasn't productive, nor gave any confidence as to correct treatment, but hasn't corrected or notified any of us of the issue.