Mortgage Interest Deduction with two 1098 forms

[Need Help Please]

My home loan was sold in 2023, so I have 2 1098's this year.  I've entered the data from both, and after entering both, Turbo Tax says both are eligible for deductions and shows the total of the 2.  When I'm all done entering all of my deductions and go to Worksheet A, the amount for the Interest Mortgage deduction is only for the first 1098; it should be for both.  I cannot figure out why?

[PatriciaV · Accepted solution]

If you are using TurboTax for Desktop, you can review the calculations for the Mortgage Interest on a few worksheets using Forms Mode. In TurboTax Online, you'll need to print your return, including all worksheets.

Look for Tax & Interest Worksheet, and Deductible Home Mortgage Interest Worksheet. In TurboTax Desktop, the second worksheet is accessed by a QuickZoom box under Interest Deductions on the Tax & Interest Worksheet.

The Deductible Home Mortgage Interest (DHMI) Worksheet displays your entries for each mortgage, calculates the average balance, compares this to the limitations, then calculates the percentage that is allowable. Line 22 goes to Schedule A Line 8a.

Reviewing the entries on the DHMI Worksheet is the most efficient way to confirm you have answered the questions accurately and also why you may not see the interest deduction you expected.

Additional Information:

• How do I manually fill out my tax forms in TurboTax Desktop?
• How do I preview my TurboTax Online return before filing?

[ctatedtate]

Same issue. I found the order you add them in makes a difference. Add in the original one first and then the one it was sold to next. BUT it still is not correct unless I answer the question that asks if it is a refi. It is not but its the only way I can see the correct total. Driving me nuts. Still working on it.  Any help from anyone here would be great.

[AmyC]

There is a difference between the program and the tax form, Sch A. The program is asking you about the mortgages to jump through worksheets and limitations to put the final answer on Sch A. The IRS only sees the sch A amount and the forms they received. The IRS does not see the worksheets.

If your entry yields the correct result on sch A, you are done. Great job!

@ctatedtate 

[ctatedtate]

Thats basically what I decided. I think there are bugs in this area and the wording to the questions is ambiguous. As long as schedule A showed the total correct interest from the two 1098s I was good. 

Thanks for your reply