I found the answer!!!!!
First I applied the updates that came out today.
Then, in Easy Step, I deleted both of my 1098’s and started over with no mortgage interest deduction.
When I was filing out the details in Easy Step for the first 1098 form, I noticed that at the bottom of the screen there was a link “Multiple 1098’s related to a Refinace done in 2020” in blue. I think this is new.
The Help window tells me to enter only ONE, COMBINED 1098 if I have refinanced in 2020.
I added together the amounts in Box 1 from both of my 1098 forms, as instructed, which gave me a total of all my 2020 mortgage interest from both loans for Box 1.
For Box 3, Origination date, it instructed me to put in the oldest date on my two 1098 forms.
Later on, another screen appears asking about loans taken out after 1987 and after 2017.
There is another “What if I refinanced?” link in blue at the bottom of the screen.
According to this info, the loan limitation for the refinanced loan is based on the date of the original loan, not the date of the refinance loan. In my case this made a big difference because the loan limit for my original 2016 loan was $1,000,000, but for loans taken out after 2017, the loan limit is $750,000. My refinance loan is above this limit, but well below my original limit.
The only problem I encountered was trying to include the points I paid on the 2020 refinance loan via EasyStep.
I tried entering the points ($25,711- ouch), amortized over the 30 year life of the new loan, but no matter what I did, it would cut my mortgage interest deduction by tens of thousands of dollars.
So instead, I manually added the $138 in amortized points for the refinance loan directly on the Schedule A.
In summary, I now have only one “Home Int Wkst” that combines my two 1098s. I no longer have a "Ded Home Int” worksheet, which was creating all the problems.
In my mind, this is clearly a workaround that TurboTax has created. Nonetheless, my return passes the error checks and is correct dollar-wise.
I’m just relieved that I can submit my Fed and State returns electronically through TT this year and don't have to start over with another software package.
