Limit Interest/Points Error - Turbo Tax Not Calculating the 1098 Mortgage Interest Deduction Properly when you have a Refi

[timbo91984]

It seems this issue has not been fixed by Turbo Tax.  Can someone from Turbo Tax please help fix this error?  I went into "Form" and under the Mortgage Interest Limited Smart Worksheet section, where it asks Does your mortgage interest need to be limited? and tried overriding it from "Yes" to "No" but it won't allow me.

[PatriciaV]

This experience has been reported and is under investigation. You may sign up for updates here: 

Why isn't my mortgage interest flowing into my Schedule A? Even if this doesn't seem to apply to your situation, the worksheet will be updated in TurboTax when the investigation is complete.

[VenTrain]

I believe the worksheet is blocking the total credits from going to schedule A because it's using a what's new statement on publication 936 incorrectly and therefore not using the deductions from this worksheet to be transferred to schedule A. Look at the bottom of the worksheet where it states the mortgage insurance premium deduction has expired. The message is about insurance premiums and TurboTax mistakenly interpreted it as mortgage interest. Look for my post today on this.

[VenTrain]

Thanks Patricia, any idea when this will be completed and the update applied?

[PatriciaV]

The email I received yesterday 3/1/23 said they were still working on it. No estimate on when the fix will be released. Be sure you sign up with the link above.

@VenTrain 

[rgrindley]

I found a workaround, after many hours, so hopefully this helps somebody else. At least for my case which is: Mortgage originated in 2015, with refi in 2020, so should have $1,000,000 cap, but the Deductible Home Mortgage Interest Worksheet was *not* filling in properly. In fact it wasn't filling in anything, and was not calculating the limited deduction.

Steps for workaround:

  1) Go to the Home Mortgage Interest Worksheet

  2) In the Smart Worksheet section at the bottom in B, for question "Was this loan the result of financing a previous loan?", though it should be Y, choose N. But make sure to fill in the other info in B, with origination date

  3) Go back to Deductible Home Mortgage Interest Worksheet - it should now have actually filled in all the numbers, and calculated your lower (limited) interest deduction. Write down this number, as is does NOT automatically propagate to Schedule A

  4) Go back to Schedule A, and in line 8a, select the wrong number, and right-click then choose Override. Enter the correct number

  5) You should now see your Federal Tax Due update

NOTE: If you go run the Smart Check, it will give you a warning that you should *not* Override line 8a. You will have to ignore this. It should still let you file. 

[rgrindley]

BTW, the link to "sign up for updates" is dead (doesn't go anywhere).