I have multiple Form 1098 b/c I refinanced my mort...
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ptrkwan
New Member

I have multiple Form 1098 b/c I refinanced my mortgage multiple times during 2020. Why is Turbotax limiting my interest deduction when my loan amount is less than $500K?

My loan was originated in 2018 and it was less than $750K.  My total interest paid is $15K.  Turbotax is calculating deductible interest as only a portion of total interest paid which is causing the standard deduction to be taken as opposed to itemized deduction.  Turbotax is indicating that this is the case because "your $xxx of mortgage interest is the same as HP3L12 because true"
3 Replies
AnnetteB6
Employee Tax Expert

I have multiple Form 1098 b/c I refinanced my mortgage multiple times during 2020. Why is Turbotax limiting my interest deduction when my loan amount is less than $500K?

Take a look at the following TurboTax article which was issued recently for instructions to enter your mortgage interest when you refinanced.

 

What do I do if I have multiple 1098s from refinancing my home debt?

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ptrkwan
New Member

I have multiple Form 1098 b/c I refinanced my mortgage multiple times during 2020. Why is Turbotax limiting my interest deduction when my loan amount is less than $500K?

Yes I did read that thread but after following the instructions, it did not solve this issue.  Turboxtax continued to limit the amount of my eligible interest deduction.  Since my loan was post 2018, I understand the max loan amount is $750K, which is true for me and since each of my refinancing did not exceed this amount and was to refinance my primary home (not secondary property or for any other use), I do not believe my interest should be reduced, unless there is another nuance to the rule that I am not aware of.  Thank you.

JohnB5677
Expert Alumni

I have multiple Form 1098 b/c I refinanced my mortgage multiple times during 2020. Why is Turbotax limiting my interest deduction when my loan amount is less than $500K?

Some TurboTax customers are experiencing the following error message when running the Federal Error Check 

 

Check This Entry: Tax and Interest Deduction Worksheet: Limited Interest and Points must be entered

 

If you're experiencing  the error above,  please go here to receive email notifications when any updates related to this issue become available.

 

As a work around  you can consolidate the 1098's and get an accurate result.

  • Total all of the Box 1 Mortgage Interest received .
  • Use the entry in Box 2 Outstanding Mortgage Principal from the most recent mortgage.
  • Total all of the Boxes 4 & 5
  • Enter only the most recent mortgage points for Box 6.  (Any previous points will be deducted when those mortgages were closed.) 

 

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