Get your taxes done using TurboTax

Here is how you can use the interest paid divided by interest rate method outlined in Publication 936:

1. In TurboTax Desktop, go to the Forms section of your return
2. Click on the Home Mortgage Interest Worksheet (Home Int Wkst)
3. Click on line 3, Outstanding Mortgage Principal, if you would like to use the interest paid divided by interest rate method you may, provided that you owned the home all 12 months and you paid monthly.
4. Click the Cross next to the entry to Add your supporting details
5. For your description, type in the formula that you are using to determine your outstanding mortgage balance. For example, 24500 interest paid / .03 interest. If your interest rate varied during the year, you must use the lowest interest rate for this method.
6. In the amount, type in the Outstanding Mortgage Principal determined by this method. In this example, that would be 816667.
7. That amount should automatically replace the original amount on Line 3 as reported on your 1098. 

@KyleG