Interest Deductions

[ChaseT]

Hello.  Completed my taxes for 2019 and entered my mortgage interest as instructed. At the end when the software did it's review and compared my deductible total to 2018 I did not see the mortgage interest that I entered previously why?  Deduction was only for $4,500 on a $111K loan. It deducted last year. Did the tax law change?  I could not find any.  Thank you. Chase

[GiseleD]

It sounds like you took the standard deduction in 2018. If this was the case, then you did not deduct the mortgage interest (even if you entered it). The Tax Cuts and Jobs Act nearly doubled the standard deduction for most filers, thus many are no longer able to itemize.

Regarding the $4500, even if the loan was for $111k, you can only deduct the interest and mortgage insurance (if applicable) portion of the loan. The mortgage interest is in box 1 of your 1098, and the mortgage insurance (if applicable) is in box 5. 

[ChaseT]

Thank you Gisele.  Not sure why that would make a difference. In reviewing my tax return from Turbotax for 2018 I did itemize for 2018 (Schedule A was ~$19.2K).   For this year same. Turbotax has recommended Federal Itemize Deductions since it's greater than the $12.2K but in the previous screen ((2019 Deductions & Credits) the mortgage interest of $4,400 that I entered is now $0.  Doesn't make sense if Turbotax is recommending itemizing.     

[DMarkM1]

I suggest you delete and re-enter the form 1098 information.  Once complete and you click "done" and "wrap up tax breaks" at the bottom of the follow on pages, you will come to the standard vs itemized comparison page again.  Below that graph is a hyperlink to show the itemized deduction breakdown. Verify what amount is showing there for interest deductions.  

[ChaseT]

Thank you. I will try that. I didn't mention that I was using Windows 7 which is not supported by Intuit I understand.  I am going to download the Deluxe sofware onto my new laptop Windows 10 and crunch in the same numbers again and see if it takes.  Chase

[ChaseT]

Hello. I’m still not understanding under what circumstances I would not be allowed to take the mortgage interest deduction. I am itemizing which is what the software recommended.  And I don’t make over $200,000 a year. The TurboTax software has me down is zero dollars. Chase

[DavidD66]

Do your total itemized deductions exceed the standard deduction for your filing status ($24,400 MFJ, $12,200 Single & MFS, $18,350 Head of Household)?

[ChaseT]

Yes. I’m filing single, total itemize is $23K+

[ThomasM125]

You need to make sure you answered the questions correctly regarding the size of the mortgage and the use to which you put the money.

For mortgages after 12-15-17, the interest is not deductible to the extent the mortgages is over $750,000. 

For home equity loans, the funds must have been used to improve your home.

Also, if you have a home office or rent a portion of your home, part of the mortgage interest much be allocated to your home office and/or the rental activity.

[ChaseT]

Yes thank you but none of what you noted applies.  It's almost seems like a software issue.  I've done the taxes on Windows 7 and also on a Windows 10 computer and it come out the same. 

[AnnetteB6 · Accepted solution]

It is a small thing to check, but be sure that when you entered your mortgage interest that you indicated that it was secured by your home.  If for some reason that entry was missed or incorrect, then the mortgage interest is not deducted.  

@ChaseT

[ChaseT]

Thanks Annette!!  Your advice is right on..thank you. I believe I said unsecured.