I found a nice faq on the issue and thought i would share:
Home Debt Over $750,000 for Married Filing Jointly and $375,000 for Married Filing Separately
Under tax law, you're limited on the amount of home interest you can deduct. The limit is based on the loan amount and date of the origination of debt. We want to make sure we calculate this correctly for you.
If you refinanced last year, you’ll have a Form 1098 from your previous lender and one from the lender you refinanced with. You’ll need both forms.
Follow these steps to enter your mortgage info:
- Gather all of your 1098 forms related to your refinance (the form from your original lender and the form from your new lender).
- Grab a calculator and add together the box 1 amount from each form. Enter the total in TurboTax as Box 1 Mortgage interest.
- Add the Box 5 amount from each form and enter the total as Box 5 Mortgage insurance premiums. (If you weren’t required to pay mortgage insurance, these boxes will be blank on your forms and you won’t enter anything.)
- Add the property tax paid from each form and enter it in the Property (real estate) taxes box.
Next, finish adding info for boxes 2, 3, 7, and 11 using Form 1098 for the original loan.
What if I have more than two 1098s?
You should combine all of the 1098s directly related to the refinance and enter it as one 1098. An example of this is if you refinanced two loans into one loan. Any 1098s not directly related to the refinance should get entered separately.
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 check mark 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.
Hope this helps as it resolved my mortgage interest issue in CA.
Mike
