Some TurboTax customers are experiencing the following error message when running the Federal Error Check -
Check This Entry:
Tax and Interest Deduction Worksheet: Limited Interest and Points must be entered
If you're experiencing the error above, please go here to receive email notifications when any updates related to this issue become available.
You are correct and it will be corrected in an upcoming update. Points must be amortized (spread out evenly) over the life of the loan when they apply to a:
- Loan on a second home
- Home equity loan, or
- Loan to refinance your home (if not used for home improvements)
Amortization is per month, not per year.
Example:
Joe incurs $2,000 in points on a 30-year loan of 360 monthly payments. The first payment is for November of 2020. Only $11.12 is deductible for 2020 ($2,000 divided by 360 = $5.56 * two months = $11.12).
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