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Level 1
posted Feb 27, 2022 7:09:07 PM

mortgage interest deduction does not work after refi

I had refi on my primary home on 2020/8/6, for 2020 tax return seems fine. but for 2021, when I fill in the information from 1098  (the interest is about $10k and total loan is about 410k), turbotax seems NOT update the number of federal tax due. (looks like the interest is not deducted from tax)

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1 Replies
Expert Alumni
Feb 28, 2022 5:34:26 AM

It is possible that even with the mortgage interest deduction, the TurboTax software determined that you are still getting the best tax outcome by taking the standard deduction. In this case, entering your mortgage interest would not move the needle on your tax refund since it was giving you the standard deduction prior to entering the mortgage interest. 

 

Make sure you are putting every itemized deduction in there. I imagine with $10k in mortgage interest you are probably getting close to itemizing, depending on your filing status. If your Form 1098 has the property taxes, make sure to enter those as well. If those are not listed on your 1098 but you did pay property taxes on your home, you can still enter them as an itemized deduction in Federal > Deductions & Credits > Your Home > Property (Real Estate) Taxes. 

 

Once you are done entering all your deductions and credits, if you select Wrap up tax breaks at the bottom of the Deductions & Credits screen, it will show you your standard deduction and itemized deductions. TurboTax automatically selects the bigger one, but you can override this if you wish, which may provide a bigger benefit on your state taxes.