real estate taxes

[taxbiz2511]

ProSeries needs a more streamlined method of entering real estate taxes across schedules A, E, F, 8829 and so on. Entering on 8829 proves to be a circular type reference ie: I don't know if the taxpayer will itemize until after I make the entries on the other forms/schedules. And I pay the big bucks so that I don't have to do the math! Also, mortgage interest entered in the excess line (for those who are taking standard deduction) does not flow to New York. Very frustrated with this. A worksheet to enter deductions that will be prorated across schedules would be great

[Accountant-Man]

For federal purposes, why should using the 8829 make it difficult? Enter the totals on 8829, some flow to the Sch C, the rest to Sch A.

Whether they itemize or not has no relevance to the 8829.

[TaxGuyBill]

@Accountant-Man   Yes it does matter.  They changed that a year or two back.  If it is itemized, mortgage interest and real estate taxes go on Lines 10 and 11.  If they don't itemize, they are supposed to go on Lines 16 and 17.

[Just-Lisa-Now-]

Does that change the dollar amounts that you can deduct by putting them on a different line of the 8829?

[Accountant-Man]

TGB, by saying "if it is itemized," does it mean, for taxes, more than or less than $10,000? As well as more than or less than standard deductions?

Those are two separate calculations.

[TaxGuyBill]

Lisa, sometimes. 

If the expenses on the 8829 are larger than what is allowed (Line 8), then it matters.  If they are not larger then Line 8 (all of the expenses can be used), then the results are the same.

If they are on Lines 10 and 11, then it will allow the deduction because they would 'otherwise be allowable' (personal expenses on Schedule A).  If they are on Lines 16 and 17, then they will NOT be allowed (you aren't filing Schedule A), and will carry forward to next year.

Accountant Man,

• If Schedule A is NOT filed, they all go on Lines 16 and 17.
• If Schedule A is being filed, and the $10,000 limit does NOT come into play (or the mortgage interest limit of $750,000/$1,000,000), then they all go on Lines 10 and 11.
• If Schedule A is being filed, and the $10,000 limit DOES comes into play (or the mortgage limit of $750,000/$1,000,000) then ... I don't remember (I don't have any clients that exceed the limits).  Maybe part on 10 and 11 and part on 16 and 17?  There is a worksheet in the Instructions.

[Accountant-Man]

I get it, the worksheet, but your first two examples both are the same answer regardless of using 10 & 11 or 16 &17.

[TaxGuyBill]

If you read my comment to Lisa, Lines 10 &11 versus 16 & 17 do not always have the same result.  If the total expenses on 8829 are larger than the limit on Line 8, the results will be different.

[BobKamman]

The solution to this is the standard deduction of $5 a square foot, up to $1,500; claim all the interest and taxes allowed on Schedule A, if itemizing; and move on.  However, I realize that in some areas with high housing costs, or for some taxpayers who (claim to) use a high percentage of their home as an office, it's better to figure actual expenses.  Even if they must share with us in fees, half of what it saves in taxes, because of the additional effort required to compute it.

As I recall, the previous software I used allowed entry of 100% of interest and taxes on Schedule A, then carried over the appropriate amount to the 8829.  It drove me crazy (well, not quite) with ProSeries to have to start on the 8829 and let it do the work of carrying it over to the Schedule A.  Then Congress made it even more complicated, mostly with the $10,000 cap on taxes but for some people also the limits on mortgage interest.  

Why does IRS need two lines for real estate taxes on the 8829, anyway?  Did they put them there just to make it easier for programmers, who aren't taking advantage of the feature?  

[Gorilla]

I have to manually calculate these figures too often.  It is very common here for someone to own a home with an attached "ohana" (aka mother daughter studio), and have a cottage on the same property, and be using a portion of the main home for business with all of the mortgage, property taxes, etc., paid together.  We need a way to be able to separate the mortgage interest & property taxes between the 8829s (sometimes more than one home office for different businesses), E, and A.  Just carrying from E to A or 8829 to A is insufficient and means we have to manually calculate on a spreadsheet and manually enter the figures on all forms.

[IntuitGabi]

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