How do I revise the interest deduction downward? My home mortgage was taken out in mid-2018 and the principal balance is over $750k - so I have to change the number from my 1098 to a lower number. Where do I put the lower allowable interest number in the online TurboTax?
You'll need to sign in or create an account to connect with an expert.
If your deductible mortgage interest is being limited due to the $750,000 limit in place for loans after December 15, 2017, TurboTax will automatically calculate the deductible portion of your interest.
In addition to entering Form 1098, you will also have to enter your loan balance as of January 1, 2022. TurboTax will then calculate the deductible interest based on the average loan balance for the year.
If your deductible mortgage interest is being limited due to the $750,000 limit in place for loans after December 15, 2017, TurboTax will automatically calculate the deductible portion of your interest.
In addition to entering Form 1098, you will also have to enter your loan balance as of January 1, 2022. TurboTax will then calculate the deductible interest based on the average loan balance for the year.
Thank you! I spent 45 min on the phone with TurboTax reps this morning and they couldn't tell me anything about this question.
what if i have two loans for two residences that exceed 750k.
For example:
One first primary home loan is for 350k at 2%
Second home loan is for 550k at 3.5%.
Intuitively I would want to deduct 750k in total, so the full 550k at 3.5% and the remaining 200k of the first loan at 2%. How will turbotax handle this? it seems to be limiting interest when i enter them both in and they exceed 750k.
The average loan balances for each loan are added together and then divide your loan limit (depends on dates of loans, 750K for example) by that total average loan balance. That will give you a ratio that you multiply by the total interest paid (boxes 1 form 1098) to arrive at you deductible interest.
There are several methods shown in Publication 936 (here) for calculating the average loan balance for each of your loans.
Once you have figured your average balance for each loan, then for example:
Loan A average balance = 350K Interest paid box 1 = 10,000
Loan B average balance = 550K Interest paid box 1 = 15,000
Total average loan balance is 350K + 550K = 900K
Assuming both loans started after Dec 2017 the loan limit is 750K.
750K/900K = .8333
.8333 x 25,000 interest paid = 20,833 deductible interest
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
cchid8
New Member
bdcruz
New Member
jeannieb82
New Member
Rhkjr
Returning Member
y2kconfuse
New Member