I have a Fender Jerry Donahue signature model telecaster (made in japan) and since i got it i have had problems with the intonation.

my bridge saddles are so far back that i have had to cut the screws off because they were sticking up past the strings and causes buzzes but my intonation is still wrong ( fretted note is sharper than the harmonic)

what could be causing this problem???

Have you tried lowering your pickups?

Often problems with intonation are simply a problem with the strong magnetic pull of the pickups on the strings (sometimes called Stratitis). Stratitis is the magnetic pull on the strings that changes the path of the vibrating string (essentially changing its pitch). A normally plucked string vibrates in a much different way than a natural harmonic - that is what causes differences in pitch of the harmonic and the note sounded from the 12th fret when dampened by a strong electromagnetic field.

Try lowering your pickups (on the E, A, D side) to lessen magnetic pull - the magnetic dampening is likely introducing dissonant overtones making intonation an impossibility. Lower them an eighth of an inch at a time until you get the intonation right.

thanks ill give that a try