Mortgage Interest Deduction Calculation

Forum|Forum|3 years ago
March 6, 2023
2 replies
28 views

Hi,

Am trying to insert my mortgage interest deduction into Turbo Tax. My home (primary first home) was bought using a loan of $822,375, which is above the $750,000 limit for married couplies, filing jointly. The loan originated in November 2021 and i paid interest on it all of 2022. The amount of the principal as of 1/1/2023 was $804,135.51. And i paid $27,557.56 in interest in 2022.

How would i calculate the amount of the interest i am allowed to deduct per the figures above? the calculation Turbo Tax says is $25,415. but not sure how this was calculated.

JohnB5677

Level 15

This is a complex calculation, but I've taken it directly from IRS Publication 936 (2022), Home Mortgage Interest Deduction

Or you can plug your 1098 into TurboTax and have us do the calculation.

Follow these steps to post your 1098.

Select Deductions & Credits

Scroll to Your Home
Select Mortgage Interest and Refinancing (Form 1098)
Did you pay any home loans in 2022? - Yes
Continue
Select your bank, if you select this option, follow the interview.
or Change how I enter my form.
Type it by myself.
Follow the interview.

For box 2 (Outstanding Mortgage principal)

Your outstanding mortgage principal balance is the amount of money you still owe on your home loan.
If you took out a new loan, input your original loan balance.
If your loan was funded before the start of the previous year, input your balance as of January 1, 2022.

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rsuratiAuthor

Level 2

Great - thank you. That makes sense. I see where my confusion was...determining the loan amount to use (which can be the average using the beg and end balance of principal for 2022).