Refinance: My work around for the average outstanding balance for mortgages error is to do the following: Replace box 2 of 1098 of original mortgage that is paid off during 2020 with the Amount of Principal Paid off in 2020 on that loan.. So for example a 420K mortgage balance at beginning of year becomes a 4K mortgage if that is amount of principal paid down on that loan for the part of year it was active. By doing this turbotax did not kick in the averages worksheet and limit deductibility of interest paid. It keeps all of the mortgage refinance values you enter intact for those to carry forward if necessary to tax year 2021. And since it was a simple refinance--the two values added up to the beginning of year 2020 loan outstanding balance. $4k +416K(refinance principal starting balance) =420K
