Is mortgage interest used twice if you are renting out part of your home?

[swmcninch]

Why under tax breaks, mortgage interest and refinancing, the interest is double what 1098 says?

[MinhT1 · Accepted solution]

When you rent out part of your home, common expenses have to be apportioned between personal use and business use (rental) of your home.

You need to calculate the percentage of business (rental) use. One common method is to divide the square footage of the rented portion by the total square footage of the house.

In the rental section, you will deduct as rental expenses the rental portion (total costs multiplied by the percentage of business use) of each common cost (such as mortgage interest, property taxes, utilities…). You also claim other costs related to the rental such as repairs and maintenance, etc..

In the personal section, you will claim in Itemized deductions the personal use portion of mortgage interest and property taxes.

[tsong09]

Hi, I have a similar questions.

I noticed that on my Schedule A, line 8a where it asks for home mortgage insurance the number listed on my completed return is $5433 but the number I inputted was $3622, the number on my 1098 form. This is a on a rental property that was rented out 50% for all of 2020. When I went through this portion with two turbolive tax experts they confirmed that the $1811 number, that turbo automatically calculated when I entered the full amount of $3622 and indicated only 50% of the property was rented, was correct. I don't believe I entered mortgage deduction anywhere else and only received 1 1098 form.

From what I could calculate what happened was $3622 was halved to get $1811 and then was added to $3622 to get to the $5433 number that appears on the Schedule A. I'm wondering if that is correct, I would think since only 50% was rented out that I could only take $1811 deduction. Would just like to understand where the $5433 number came from. Do I need to file an amendment? Thanks!

[Carl]

When renting out a part of your home, there is one question you are asked, that is just flat out the wrong question "for" "your" "specific" "situation".

Paraphrased, the question is asking "what percentage of *TIME* in 2020 did you rent it out?"  Now, for "your" "specific" "situation", reword the question to "what percentage of "FLOOR SPACE" did you rent out?". Then answer with the appropriate percentage. Then, "and only then" can the program correctly calculate and split the mortgage intererest correctly, based on the percentage of floor space rented out, and percentage of time it was rented out in the tax year.

The program already figures the percentage of time, based on the "in service" date you entered.

[DianeW777]

In addition to the important information posted by @Carl, make sure you did not enter the mortgage interest under Home Mortgage and under the rental property. 

If the return has been filed, then you must amend if the total combined mortgage interest is more than you actually paid and the itemized deductions were actually used on your tax return.

• How to amend (change or correct) a return already filed (and accepted at the IRS)
  • Review the information here to be sure you need to amend your return.
• Steps to amend my 2020 return