Deductions & credits

Please return to the entry screen and only make that (double) selection ("new loan with points" and "bought or improved home in 2024") for the first (oldest) 1098, not both.

Only enter points paid on the oldest 1098.

I entered the first 1098 and indicated that it was secured by home 

I selected BOTH "new loan with points" and "bought or improved home in 2024"

I entered points

and I selected YES "This loan was paid off or refinanced with a different lender in 2024". 

(when I indicated NO to "paid off or refinanced", the program added the mortgage balances)

No, not most recent 1098

"HELOC or refinance?" NO

Yes, only used on this home

The points and interest were added and reported on Schedule A

I entered the second 1098 

Yes, secured by home

I indicated ONLY that I bought or improved the home with this loan, but I DO NOT indicate that it was a NEW loan, do not enter points a second time

Yes, most recent 1098

Neither HELOC nor refinance 

Yes, only used on this home

DONE

I used 740,000 and 735,000 as the balances on the two 1098 forms and the interest was not limited. (the program did not add them together)

All interest and points were reported as deductions on Schedule A

I did get a "Let's Check These Entries" when I ran "Smart Check" where I had to indicate if either loan was a refinance. 

I selected "Refinance NO"

The full deduction remained on Schedule A.

Rules changed regarding the Home Mortgage Interest deduction several years ago, however Form 1098 was not updated to reflect all the information needed to make a proper calculation. 

I am not sure if the "Smart Check" question about the loan(s) being a refinance is by design, but I could not eliminate that Smart Check question from being asked when I entered two different 1098 Forms. 

IRS Pub 936