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Anonymous
Not applicable

Mortgage Interest deduction correct on Home Int Wkst but TT enters a much higher deduction on forms

I have only one 1098 for my primary residence in which I also rent out 2 rooms.  In the "Your Home" section I entered in all info from my 1098 as it requests and the Home Interest Worksheet shows the correct information.  However, I paid approximately $14,000 in mortgage interest and Turbo Tax is entering in a $22,000 deduction.  I was careful not to enter in property taxes that were already claimed in the rental section.  I can't figure out why the deduction is coming in so high.  The Home Loan Deduction Summary also shows the correct amount (~$14,000) that matches the amount I actually paid on my 1098.  It is when I complete entering in my info for that section and it returns to the Summary of Deductions and Credits that it suddenly shows the much higher amount for that section. I have rechecked the section multiple times to make sure there isn't something else being included but it only takes me back to the 1098 info and questions.  I don't want to send in my taxes with an error but TT Smartcheck isn't finding anything wrong with the current calculations.  Is it possible to get a Mortgage Interest deduction that is thousands of dollars higher than the amount originally paid? If not, what am I doing wrong?

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4 Replies
cjsiegel
New Member

Mortgage Interest deduction correct on Home Int Wkst but TT enters a much higher deduction on forms

I had the opposite happen. WHY.  

Cynthiad66
Expert Alumni

Mortgage Interest deduction correct on Home Int Wkst but TT enters a much higher deduction on forms

No.  Your combined deduction between Schedule A and Schedule E should always total the amount reported  on form 1098E.  If the amount on schedule E is being reported accurately you may have to manually enter the correct amount on the itemized deductions.

 

Also, you should enter the mortgage interest on schedule E for rental first because it usually automatically carries the unused portion to your itemized deductions.  You would not need to enter the amount on Schedule A manually.

 

But before you do that, please clear your cookies, history and cache' then reboot the computer.  Your computer may be caught in a loop.

@Anonymous

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Anonymous
Not applicable

Mortgage Interest deduction correct on Home Int Wkst but TT enters a much higher deduction on forms

I did enter my rental information first and am on a downloaded version of the software, not a web version, so I don't know how to wipe any cookies that could affect that.  Is there a way to do that that I am not aware of? Also, in looking at the actual tax forms on Schedule A, line 5b matches the amount that the software calculated from the % of the property that is a rental, but then line 8a is showing the inflated amount calculated by TT rather than the amount listed on the form 1098. The only rental issue TT warned me of as I answered the EasyStep questions was to not repeat any property tax claimed in the rental (which doesn't apply to me because I don't have it bundled in the mortgage so that line is 0 anyway on the 1098).  There was never a place in the rental information for me to enter mortgage interest information so it makes sense that it should all be entered on Schedule A line 8a, but I want to be sure that I do it correctly.  If I understand you correctly, I should take the total amount of Mortgage Interest listed on the 1098 and subtract the amount from Schedule E line 12.  The difference of those two numbers should be the amount that I enter into Schedule A line 8a?  

Cynthiad66
Expert Alumni

Mortgage Interest deduction correct on Home Int Wkst but TT enters a much higher deduction on forms

Yes!  And since you are in the download version, you can go to forms mode to enter items directly on the forms.  The goal is to only claim 100% of the total mortgage interest on the return.  

 

Only caution is that if you make overrides your accuracy guarantee with TT will be void.

 

If this does not work, come back we will make it work, somehow.

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