How do I enter 1098s for the original mortgage and the refinanced loan that paid off the original mortgage? TurboTax seems to be calculating the balance twice.

[ldecorinteriors]

I see no highlighted phrase here regarding mulitple 1098's. ???

[pk8]

I think the questionnaire is misleading.  In the step-by-step instructions you need to enter "0" in the balance if you paid off the loan in 2020 and not the balance on the day you paid it off.  I found this by looking at the Home Mortgage Interest Worksheet in the forms section.  Toward the end of the form, there's a section called "Home Mortgage Interest Limitation Smart Worksheet.  On line E, the outstanding  principal as of 12/31/2020 was the same value as the mortgage balance on the day I paid off the loan.  When I entered "0" on the worksheet, it corrected the step-by-step.  So, either there's a bug where the program doesn't automatically correct to "0" when you give a pay-off date, or, the question shouldn't ask for a balance on the day it was paid off.

[W1550777]

How do I enter the cost to refinance 

[RaifH]

If the property is your main home or a second home for personal use, refinancing costs are not deductible. One exception is if you paid points. These are considered prepaid interest and are deducted over the life of the loan.

If this is for a rental property, you may amortize the refinancing costs over the life of the loan. You would do this by adding them as an intangible asset.

@W1550777

[PAA66]

That is not answering the question that was asked.

[PAA66]

I agree with you.  Turbo Tax needs to clear up this mess about mortgage interest because the question they ask in order to limit the allowable mortgage interest deduction is riduculous.  I refinanced my mortgage to lower the interest and I have never taken any money out. That is the question they need to ask separately from the others.  But what trying to do trip by asking two different questions in one sentence.  Please, if anyone know - is a better tax program out there somewhere?

[HBrandon81]

We refinanced and were told to claim our 1.58% discount points. However, before we made our first payment the company sold our loan to another lender. Since I won't get a 1098 form from the company we refi'd with do I claim the points towards our previous loan or towards the company that purchased our loan and still holds it?

[Vanessa A]

If the points are not reflected on your 1098 with your current mortgage company, then you would enter them as being paid to the original bank. 

As you walk through the steps of entering the points for the original lender, you will come to a spot that says tell us about your loan and will be asking about points.  At the bottom of the questions there is a box that says this loan was paid off or refinanced with a different lender in 2022, check that box.