DawnC
Employee Tax Expert

Deductions & credits

State and local taxes are limited to 10,000, so $6K is not going to cause an issue (unless you are filing MFS?).    Your mortgage interest deduction is probably not correct.   You can deduct interest on debt up to $750K.   Did you refinance or have multiple 1098 forms entered?    You should have a Deductible Mortgage Interest Worksheet included in your return that will show how TurboTax calculated your average mortgage balance to calculate your deduction.   Look over this FAQ (and the refinance FAQ included there) along with the worksheet - there is probably something that needs correcting on your worksheet.  

 

The IRS lets you deduct your mortgage interest, but only if you itemize deductions. You can't deduct the principal (the borrowed money you're paying back).  In addition to itemizing, these conditions must be met for mortgage interest to be deductible:

 

  • The loan is secured, which means the lender has some kind of guarantee of payment, usually in the form of property. If a borrower defaults on payments, the lender can seize the property that’s securing the loan. If you’re buying or refinancing a home, especially if it’s your first home, the loan is usually secured by the home you’re buying or refinancing.
  • The home with the secured loan must have sleeping, cooking, and toilet facilities.
  • The debt can’t exceed $750,000 (or $1,000,000 if the loan was taken before December 16, 2017) to get the full deduction.
  • You or someone on your tax return must have signed or co-signed the loan.
  • If you rented out the home, you must have used the home more than 14 days during the tax year or 10% of the number of days you rented it out, whichever is greater.

 

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