When you refinanced in 2020, did you take cash out of your home or was it a straight refinance? If any of the loan was used for a purpose other than home acquisition or to substantially improve the home, that portion of the interest would not be deductible. If that is not the case, and this loan was your only mortgage being reported, then the entire $12,053 should be deductible as you are well under the limit of $750,000 before mortgage interest starts to be reduced. Verify your entries into TurboTax to make sure everything is correct. If it is still limiting your mortgage interest, you may want to delete Form 1098-A and re-enter it:
- In the Federal > Deductions & Credits section of your return, scroll down to Your Home and click Revisit/Start next to Mortgage Interest and Refinancing (Form 1098)
- Edit your existing mortgage
- Answer the questions and enter or verify the information as it appears on your 1098. Make sure you have both the box 1 amount and the property taxes if they are reported on the form.
- Answer What kind of property is this loan secured by?
- Answer We didn't pay any points .
- Answer Yes to Let's see if this is the most recent form for this loan.
- Answer No to Is this the original loan used to buy your property?
- Yes to Is this loan a HELOC or a refinance?
- Answer Did you take cash out? If the answer is yes and you did not use the cash to improve the home, then that portion of the mortgage's interest will not be deductible because it is not considered home acquisition debt.
