I refinanced my house twice and when I put the second refinance in the system my federal tax return goes down a lot and the mortgage interest is not included in my deductions anymore.
I agree; I struggle with TurboTax handling of a 2nd Refinance. I refinanced 2X, amortizing points over the loan duration. On the 2nd refinance - the first stays out there amortizing each year - but I'm not sure if the 1st loan should have had the balance of points remaining, fully deducted in the year of the 2nd REFI. The tax forms themselves don't seem to match what Turbotax had me doing.
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I am having the same problem and I see it has not been fixed since a reply on this topic from an expert 2 weeks ago.
All mortgage interest is summed up and reported as a single sum in one line on Schedule A.
The issue arises when data from the second refinancing institution is entered.
Given this software problem, can't the mortgage interest from the 2 refinancing institutions be summed up and entered under one of the refinancing institutions' names?
Again, all the mortgage interest is summed up and entered in one line on Schedule A
Please try this:
If there is a refi and there was an outstanding mortgage principal listed in both of them on Line 2 on the 1098. When you do 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. 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". Once you change one of them to zero (the one that was paid off by the refinance) then it should no longer pop up with that error at the end when you go to file.
This solution involves some simple corrections to your mortgage interest worksheet (which is not part of your actual return), so you don't have to change the numbers shown on your 1098 forms. I prefer this method as your lenders send copies of your 1098 to the IRS, and I would rather they match up.