My mortgage is around 1 Million and I refinanced last year. If I put both 1098's in turbotax, including the amount in box 2 then my deduction is severely limited. I can test this by summing up the interest payments and including them in one 1098 entry in TT with the amount in box 2 being the beginning of the year and the deduction is significantly more.
In other words, if I do everything TT tells me to do then I get penalized for doing a refinance. I answered all of the questions and said that one mortgage was paid off and it did not seem to make a difference. I am pretty sure that there is no such thing as a refinance penalty so something is not working.
After playing around there are a couple of options to fix this (it is a hack but it appears to work). I can sum up the interest in to one 1098 as mentioned above- this will make it so TT does not match the individual 1098's though. Also, I can enter both 1098's but in the new loan I put 0 in box 2- again makes it so TT does not match the 1098's.
Anyone have advice on doing either of those options? I would rather hack TT than miss out on thousands of dollars in a deduction.
