The limit on the amount of interest has changed under the Tax Cuts & Jobs Act. The interest deduction pre-TCJA has been available to qualified mortgage debt up to $1 million ($500,000 married filing separately).
Through 2025, the TCJA has lowered the amount of qualified mortgage debt to $750,000. For qualified mortgage debt incurred on or before December 15, 2017, the $1 million limit remains in place, thus "grandfathering" existing mortgage debt.
You need to indicate to the software that they are not combined and need to be limited.
For desktop versions:
- In Forms view, locate and click on Tax & Int Wks on the left from the forms list
- On the form, scroll to Mortgage Interest Limited Smart Worksheet
- Click on NO to the right of the question, Does your mortgage interest need to be limited
For online versions, after entering the 1098 interest information, continue through the screens and TurboTax will ask you if the interest needs to be limited.
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