Prepaid mortgage interest and property tax held in escrow is not deductible.
Only pro-rated amounts for interest and property taxes (based on a daily amount from your closing date until your first payment) are deductible.
To enter prepaid mortgage interest
- Click on Federal Taxes (Personal using Home and Business)
- Click on Deductions and Credits
- Click on I'll choose what I work on (if shown)
- Under Your Home
- On Mortgage Interest, click on the start or update button
On the Let's get the details from your lender 1098 now page, enter prepaid interest in Box #1, Mortgage interest
If applicable, click the The interest amount I entered is different than what's on our 1098 box.
