Level 1

Solved

Deductible Home Mortgage Interest Worksheet

Forum|Forum|4 years ago
January 28, 2022
36 replies
49 views

During the review process the Deductible Home Mortgage Interest Worksheet (Schedule A) was flagged. It showed the following error: "Deductible Home Mortgage Interest Wks: This form has not been finalized for returns with two or more mortgages and limited mortgage interest. We expect this form to be available after February 17." Does this mean we have to wait until after February 17th to file, or did I make a mistake while entering the 1098 forms?

For background info; I have three 1098 forms that I have entered for the single home that I own. First 1098 is from original lender, they sold the loan so there's a 1098 from the second lender. Then, we also re-financed in 2021 so there is a 1098 from the new lender.

Any help is appreciated!

Best answer by AliciaP1

To avoid waiting to file you should combine the two Form 1098s directly related to the refinance and enter them as one Form 1098 because TurboTax is adding your mortgage balances together and triggering the interest deduction limitation. You can do this when the loan amount has always been less than the threshold.

So, in your situation, you should enter the Form 1098 from the original lender on its own. Then, add the details from the second lender and the new lender together and report the totals as the information for the Form 1098 for the new lender.

For more information, including how to handle points, please take a look at What do I do if I have multiple 1098s from refinancing my home debt?

[Edited 02/19/2022| 12:31 PM PST]

@jmc916

AliciaP1Answer

Level 13

To avoid waiting to file you should combine the two Form 1098s directly related to the refinance and enter them as one Form 1098 because TurboTax is adding your mortgage balances together and triggering the interest deduction limitation. You can do this when the loan amount has always been less than the threshold.

So, in your situation, you should enter the Form 1098 from the original lender on its own. Then, add the details from the second lender and the new lender together and report the totals as the information for the Form 1098 for the new lender.

For more information, including how to handle points, please take a look at What do I do if I have multiple 1098s from refinancing my home debt?

[Edited 02/19/2022| 12:31 PM PST]

@jmc916

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

C

chuckster59

Level 2

This doesn't seem to be a GOOD solution as most have multiple 1098's because they refinance their loan with a new company and then have the ability to RECAPTURE POINTS on the original loan.

What about that?

PatriciaV

Level 15

@chuckster59 From the link provided by @AliciaP1 (What do I do if I have multiple 1098s from refinancing my home debt?) --

What if I paid points?

Points on Loans Paid Off in 2021: Enter the points on your 1098 you have started and mark you paid off the loan when promoted.

Points on Loans on New Loans: You'll want to enter a separate 1098 to cover these points paid. When prompted, enter 0.00 for Boxes 1, 2, 5, and the Property (real estate) taxes box, and place a checkmark in Box 7, as you’ve already entered the details on your first 1098. For Box 3, add the date in 2021 when the loan originated.

On the Tell us about any points paid to bank screen, answer in regards to the new loan when asked about points.)

Your other option is to wait until the final Deductible Home Mortgage Interest Wks is available.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

M

Marlame

Level 3

TT needs to come up with a programmed solution that doesn't require all this tinkering to get to the right solution! This issue has been reported over several tax seasons and it still isn't right. And just blindly going through the program doesn't produce an error---at least not for me---it just produced the wrong result and passed the "review" nonetheless. I figured that out after I filed and now need to do an amended return for California State. Shouldn't have to do all that. Fix it TT

V

ValenGue

Level 2

I have had my taxes ready to file for weeks. I thought the worksheet would be ready today, but it is still not ready and I’m getting the same error. Can you provide an update please on when should we expect it?

S

Syaorandc

Level 2

Still waiting myself. Using online version. Been ready to file since January 18th. This silly form just keeps telling me my names are wrong(they aren't). I noticed the message did change from "We expect this form to be available on or after February 17th" to "We expect this form to be available after February 17th".

This isn't an IRS issue. The IRS has had this form ready since early January. This is all Turbotax.

Edit: The "answer" for the original post is not a solution as both of my 1098s are combined and I am under the 750K, yet I get the name error. Come on TurboTax, this should not take this long to fix.

C

chuckster59

Level 2

I agree that this is utterly RIDICULOUS and unacceptable. As a 20 year TT user who just started using the online version instead of CD-ROM box version I am unhappy with Intuit’s lack of attention to a detail that could be solved if they would just put some developer on the issue and run it to ground. Intuit Dev team…get this scrum into an urgent story and get this fixed please!

P

ppapi

Level 3

Good morning, could someone in the TurboTax team tell exactly when the update will be available to finally be able to file our tax return ?

I appreciate the suggestions about combining the 1098, but I'd just like to finalize my return in the appropriate and correct way.

The fix is not here yet, so I'd expect that the TT leadership communicates ASAP when exactly it will be available. Thanks a lot.

T

tommyy

Level 2

Second this!!

J

jack26181

Level 2

Here's the workaround I used. Clearly, TurboTax isn't in a hurry to fix this issue for people with multiple 1098s, and even if they do, I've lost confidence that they'll do it properly. So I manipulated its broken system into putting the right answer on my final tax forms. Two caveats: This is not advice. Also, I had already paid, or else I would have used a different service.

1. Google IRS Publication 936 for 2021, download the PDF, print it out, and fill in the worksheet on page 12 by hand. Inconvenient, yes, but that's where using TurboTax has landed me. Pay particular attention to the instructions on page 13, which show that there are multiple ways to calculate an average mortgage balance for the year, including by taking an average of the monthly balances. That can preserve a lot of the interest deduction for someone who had a mortgage outstanding for just a few months of the year.

2. Now go through the interview process on TurboTax. Combine all of your 1098s into one--add together the interest, real estate taxes, and so on. Use your most recent mortgage for the origination date. For both the starting and ending balances, use line 12 of the worksheet you filled in. That's the average balance of all of your mortgages, already adjusted for the special treatment of older mortgages. This will force TurboTax to calculate that figure as the average, then use it and the $750,000 limit to calculate a multiplier, and apply that multiplier to reduce the interest you paid to the allowable limit.

This method will put the wrong numbers on TurboTax's worksheet, but worksheets don't get filed to the IRS. The only thing that matters is getting a single number right on 1040 Schedule A, line 8a, which is the allowable mortgage interest deduction. This method put the right number there for me, which I verified by downloading the forms just before filing, and comparing that number with what I had gotten on my Publication 936 worksheet. Basically, I had to feed the wrong answers into TurboTax's broken worksheet and interview system to manipulate it into filing the right answer on my Schedule A.

Again, not advice. I think next year I'll use the IRS's fillable forms online, since I already seem to be doing the heavy lifting, and now I'm wondering what else TurboTax has been missing all these years.

K

Kauffee

Level 2

I agree that this is getting ridiculous that this basic worksheet is not available yet. With selling and buying homes this year, I'm not in a position where I would be able to consolidate the 1098 forms. I've been ready to submit my taxes for a couple of weeks now, but being blocked from doing so due to this worksheet.

I also received a notification to file by 2/28 for a discount when I'm being blocked from doing so by TurboTax itself. Maybe it is time to look at a different platform to file my taxes.

A

A_h15

Level 2

Any update on the fix?

A

Andira13

Level 2

It's after 7PM PST on the 17th, I've been waiting weeks to file, and still can't... What is the deal TurboTax?!

J

jack26181

Level 2

The problem is actually worse than others have indicated here. Yes, it's now Feb. 18, and TurboTax still hasn't finalized the form that it said would be done on Feb. 17. So I still can't file my taxes. And no one has any reliable estimate of whether or when the form will be finalized.

But TurboTax also gets the math wrong. The online interview assumes that the only way to calculate a mortgage's average balance for the year is to take an average of the starting and final balances. But IRS Publication 936 for 2021, which has been ready since early December, makes clear on page 13 that there are other choices. One of them is to take an average of balances for each month of the year.

That matters quite a bit if you sold one house and bought another in 2021, and had two mortgages, each for only part of the year. In my case, the difference between those two methods works out to about $5,000 in allowable interest deduction.

Now I'm left deciding whether to try to rig the online interview to get the result I want on the forms, and overcome TurboTax's form-not-finalized glitch, or ask for a refund for the fee I've already paid, and try the IRS's free fillable forms online.

N

Nevada707

Level 2

Same problem, using Home & Business for Mac. Not fixed as of February 18, 2022. Promises Promises!

M

msander4

Level 2

This is getting so ridiculous, so I just spent an hour doing the math myself. I have all the necessary numbers, but the Turbo tax system won't even let me enter in my numbers. It is still forcing me to enter 1098s. So it is making it impossible for me to file. I will be calling to request a refund (I already paid the filing fees!) and using a different platform. There is ZERO reason we should be waiting until late February for such a common form. This isn't even a niche issue.

C

chuckster59

Level 2

Getting your money back is one thing, your most precious resource…time…you can never get a refund on.

S

sonofsmog

Level 2

This is ridiculous. Here it is the 18th and I am still getting this message. Even worse it's a Federal Worksheet, but I have already FILED my FEDERAL RETURNS and they were accepted. This worksheet is holding up my CALIFORNIA STATE RETURN!!