TurboTax is correctly applying the $1 million limit to your mortgage if you have a refinance but originally bought the property before December 15, 2017. However, to get it to apply the correct limit, you have to go all the way through the questionnaire:
- After you enter Form 1098 and go through all the questions, it will take you back to your Home loan deduction summary screen, click Done.
- Answer Do either of these apply to this loan? TurboTax will correctly apply the proper mortgage limit on your home acquisition debt. If your old home was purchased before December 15, 2017 a higher limit applies.
- Enter the outstanding loan balance on January 1, 2022 in the first field. Leave the second field blank if the loan is outstanding.
TurboTax calculates the average balance by taking the average of the outstanding mortgage principal on Form 1098 and your balance due on January 1, 2022. If you refinanced this year, it only calculates your limit based on loans that were outstanding at the end of the year. Make sure that both loans are marked as being secured by your primary home and that the old loan is NOT the most current form.
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