Try to find your outstanding mortgage principal as of 1/1/2018. If the amount is not listed in box 2 of your 1098, you may find it on your January 2018 mortgage bill.
Depending on your balance and what you've used the loan for, TurboTax will need this to help you figure out how much interest you can deduct.
The IRS updated the Mortgage Interest Deduction this year. You can now only deduct the interest from the amount of your loan that’s been used to buy, build, or improve the home that it’s secured by–meaning the property that acts as collateral for the loan to protect the lender.
If you’ve ever used part of this loan to pay for things other than this home, you cannot deduct the interest from that amount of the loan, even if the transaction didn’t take place this year.
Examples of common ways you might have used this money not on your home include:
- Making a downpayment on a different home
- Funding improvements on a different home
- Making a payment on a different loan or debt
- Having miscellaneous large purchases
As you proceed through the interview TurboTax will ask questions about the size of your loan and how you used the proceeds.
[Edited 01.21.19 | 1:38PM]
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