If your mortgage interest deduction looks substantially off from last year, it could have to do with how TurboTax is calculating the average mortgage balance.
Since you purchased a new home this year, TurboTax takes the beginning balance reported on Form 1098 and the ending balance that you fill in as your balance on January 1, 2022. It then takes the average of these two numbers to determine the average mortgage balance which determines what percentage of your mortgage interest is deductible if your balance is over $750,000. It does this with both homes to determine your overall mortgage balance.
However, since you did not carry the loan on the new home for the entire year, you can also calculate the average balance by taking the monthly average. Take the outstanding mortgage principal reported in Box 2, multiplying it by the number of months you had the home, and dividing by 12. Use that number as the Outstanding mortgage balance in Box 2 and you may see a larger deduction for your interest.
