I entered all my deductions and when I completed TurboTax recommended standard deduction. My total itemized deductions should be in excess of standard deduction but mortgage interest is being reduced

[JotikaT2]

Please try the following.  

1. Log into TurboTax and choose Deductions & Credits.

2. On the page “Your tax breaks”, select Mortgage Interest and Refinancing (Form 1098) and Start.

3. Delete any Forms 1098-MTGE you have already entered in the program. Then choose the button “Add a 1098”.

4. Enter the details from your FIRST Form 1098 – the one from your old mortgage company or before the refinancing occurred. Be certain to enter all the information, including the amount in Box 2 of your 1098. According to the updated 2019 instructions for Form 1098, Box 2 should show an amount. For a loan prior to 01/01/19, the amount should be the balance of your loan as of 01/01/19. For the loan taken out in 2019 (including refinance loan or when the loan is sold to another mortgage company), the balance should be as of the date of the loan origination. 

5. Continue through the interview until you reach the screen “Was this loan paid off or refinanced with a different lender in 2019?” If you’re entering the original loan, say No.

6. On the screen “Is this loan a home equity line of credit or a loan you’ve ever refinanced”, say No.

7. Continue to complete the first 1098.

8. Add your next 1098. Be certain to enter all the information, including the amount in Box 2 of your 1098. If there is not an amount in this box, please contact your mortgage lender for the amount. It is required for an accurate calculation.

9. When you reach the screen “Is this loan a home equity line of credit or a loan you've ever refinanced?” say Yes. Select the correct radio buttons and Continue to complete the interview.

10. Click Done. If presented with a followup question about the interest limitation and your loan balance is under $750,000 then your deduction is not limited - say No. If your loan is over $750,000 then the deduction is limited. Say Yes. You will need to manually calculate the adjustment. Please see page 12 of IRS Pub. 936 for a worksheet that will help you calculate the amount. 

The above should help resolve the issue and allow you to take your mortgage interest deduction as long as you are not above the loan limits.

[Markg1732]

Thank you for explanation.

I. have deleted everything and reentered everything.   The deductible interest only reads $10,060.   My 1st mortgage was done in 2016 and totals $872,914.83 with interest of $30,252.60.   According to the IRS code I can deduct all this interest so don’t see why I am being limited.   I have done a draft of my taxes on other software and am not being limited.    Please advise how to correct this or if anyone can better walk me though this issue.

[Markg1732]

$10,060 is the amount of interest from an equity line I have reported.  Not sure as well why this figure is what is being used.

[VictoriaD75]

The limit on the amount of interest has changed under the Tax Cuts & Jobs Act. The interest deduction pre-TCJA has been available to qualified mortgage debt up to $1 million ($500,000 married filing separately).

Through 2025, the TCJA has lowered the amount of qualified mortgage debt to $750,000. For qualified mortgage debt incurred on or before December 15, 2017, the $1 million limit remains in place, thus "grandfathering" existing mortgage debt.

To modify appropriately, there is a workaround for this. 

For desktop versions:

• In Forms view, locate and click on Tax & Int Wks on the left from the forms list
• On the form, scroll to Mortgage Interest Limited Smart Worksheet
• Click on NO to the right of the question, Does your mortgage interest need to be limited

For online versions, after entering the 1098 interest information, continue through the screens and TurboTax will ask you if the interest needs to be limited.

[Markg1732]

I am not receiving a question about does the mortgage need to be limited.   After going through steps over and over nothing is changing.  I understand the tax law and should be able to fully itemize as I did on 2018 return.

How can I remedy at this point-the fact that another tax software is not showing the same thing is very disturbing.

[KurtL1]

We cannot see your tax return and how you answered all the questions when you entered the Mortgage 1098. For us to determine why your total mortgage interest is being allowed we will need look at your entries.

To have an Agent look at your return with an Offline Review to answer your question or to schedule a time to talk to an Agent with a Live Review see What is TurboTax Live? - Community

[Tara11]

was there any update to this issue?  my itemized deducts are greater than the standard deduct when considering both state taxes and mortgage interest.  however, turbotax is limiting the mortgage interest and reverting to the standard deduction.