topic The final deductible amount of mortgage interest isn't correct in Deductions & credits

The final deductible amount of mortgage interest isn't correct

zoss9999 — Sun, 07 Mar 2021 02:42:06 GMT

Hi,

I have 2 mortgage loans, and I payed interest $30,000 and $10,000 for each.

Total amount is $40,000 and I can see this amount in the deduction summary.

But, this amount is going down to $20,000 after analysis.

but somehow, it's way lower than actually summation of 2 mortgage interest I payed.

I did not see this thing last year when I did tax report for 2019.

Is there anything I'm misunderstanding or I can correct?

Thank you in advance.

Re: The final deductible amount of mortgage interest isn't correct

JohnB5677 — Sun, 07 Mar 2021 13:14:51 GMT

It may be that you entered both 1098's and ended up being limited out because it added the two loan balances together.

Delete both 1098-s out. and re-enter. You should combine all of the 1098s directly related to the refinance and enter it as one 1098. An example of this is if you refinanced two loans into one loan. Any 1098s not directly related to the refinance should get entered separately.

Re: The final deductible amount of mortgage interest isn't correct

zoss9999 — Mon, 15 Mar 2021 15:45:03 GMT

Actually, there's a cap $720,000. If total load amount is over it. No more 1:1 deduction.

Re: The final deductible amount of mortgage interest isn't correct

JohnB5677 — Mon, 15 Mar 2021 16:09:31 GMT

Try to post your 1098's this way.

If you've refinanced or had your mortgage lender changed, the outstanding mortgage principal listed in the combined total of them on Line 2 of the 1098 will be too large.

When you put an outstanding balance in both forms, then the program adds them together and if that number is greater than $750k, then it puts you in the category to "limit interest".

To get that to go away, you need to go back to the deductions section and click on "edit" mortgage interest statement. Enter both 1098's.

Change the line 2 of the mortgage that you no longer owe on (like the one that you refinanced and paid off) to a 0 (zero) because you have refinanced out of that loan and no longer have an "outstanding mortgage principal".

Re: The final deductible amount of mortgage interest isn't correct

zoss9999 — Tue, 16 Mar 2021 03:37:45 GMT

Thank you for the information.

If there's a limit on total loan amount, then no way to avoid.

One of my loan is over $750k already.