Yes, input your loan balance as of January 1, 2022. TurboTax determines your average loan balance if it is above $750,000 or $1 million for loans on homes purchased before December 15, 2017.
The method to determine average loan balance follows the IRS method of taking the average of the first and last balance for the year. The Outstanding Mortgage Principal in Box 2 of Form 1098 reflects your loan balance on January 1, 2021. You input the balance as of January 1, 2022. TurboTax calculates the average balance and limits your deductible mortgage interest based on that number.
