Hi,
I purchased my home in 2016 and refinanced my mortgage in 2020 (so, I only received one 1098 form in 2021). My current mortgage is slightly over $1M, I did not take any cash out when I refinanced and I file married/joint.
When I input my mortgage information in TurboTax (Premier / online), it does not give me any deduction for my mortgage (i.e., it is implying that the deduction is not large enough to itemize my deductions and it is instead using the standard deduction.
I'm confident that this is wrong, as:
- Given the 2016 date for my original loan, I should be able to deduct my pro rata interest expense up to the $1M mortgage limit. The full mortgage interest I paid (i.e., what's on my 1098) was ~$27k, and after adjusting for the pro rata impact up to the $1M cap, my deductible interest should be ~$24k
- In addition to the deductible mortgage interest, I have >$10k in state and local tax payments, which combined with the deductible mortgage expense should put my itemized deductions > standard deduction
When I tried to trouble-shoot the problem by changing certain inputs in the 1098 section, I found that when I put $999,999 as the outstanding mortgage principal it gave me the full / correct deduction, but when I increased that by just $2 (i.e., to just over $1M) it gave me no deduction (i.e., the pro rata adjustment that should kick in above the $1M threshold doesn't seem to be working).
For reference, in terms of what I inputted:
- I checked "No" to "Is this the original loan you used to buy your property?"
- I checked "Yes" to "Is this loan a home equity line of credit (HELOC) or a refinance of a previous loan?"
- I checked "No" to "Did you take cash out when you got this loan?"
- I'm asked to enter my loan balance as of January 1, 2022 (which was also modestly over $1M)
- I checked "Yes" to "Do either of these apply to this loan (The original loan was taken out on or before December 15, 2017 and the loan amount has not increased due to a cash out refinance)"
- I'm asked to enter the date I purchased the property secured by the loan (June 2016)
Am I inputting something incorrectly / should I change my responses to any of the questions / prompts? Or, is there a workaround in terms of how I should enter my mortgage info in TurboTax to make the calculation work correctly?
Thanks in advance for any help / guidance, I really appreciate it!
