Mortgage interest not showing up in Schedule A Line 8a

[krisbhandare]

Hi, I am using TurboTax and for Tax Year 2023, have a mortgage interest of around $22k which was a refinanced loan in 2021 and NOT a new loan after 2018. I have a loan amount just above $1M, I know this still qualifies as it was not a new loan but refinanced original loan. So why does this not show up in my Schedule A for using Itemized deductions? I have also checked that it is a secured loan since I have my home address on the 1098 form, so what gives? How do I fix this? It is forcing me to use a Standard Deduction when my itemized deductions are higher as I have a Property tax too

[MarilynG1]

Were you able to claim the Mortgage Interest as an Itemized Deduction in 2021 and 2022?  Is it the same mortgage lender issuing the Form 1098?

If you're using TurboTax Desktop, check the Home Mortgage Interest Worksheet in FORMS.  What is the Mortgage Origination Date on Line 4?

Since this was a refinance of your original loan, make sure the 'Refinanced' box is not checked on Line 9 for this loan.

If there are no Errors on this form, your 22K Mortgage Interest should show on Schedule A, Line 8a.

In TurboTax Online, you will not be able to view the worksheet until you have paid, but you can try deleting Form 1098 from your return, close TurboTax, clear your Cache and Cookies, and step through the Mortgage Interest interview again.  

It sounds like your Mortgage Interest should not be limited, but since we can't see your return in this forum, it may be a checkmark or date in the wrong place in the 1098 entry that is causing the limitation. 

Here's more info on Deducting Mortgage Interest and How to Switch from Standard to Itemized Deductions (or vice versa).

@krisbhandare 

[krisbhandare]

yes, I was able to claim the Mortgage Interest as an Itemized Deduction in 2021 and 2022 and yes same lender. The Mortgage Origination date shows 07/12/2021 in the form 1098, which is what I entered, but the Original loan was in 2006 when we first bought the home. There are no errors in the form. What are my options at this point? I even tried changing the Mortgage Origination date to a date in 2006 but that did not do anything. Any help will be greatly appreciated

[MonikaK1]

In order for us to troubleshoot this issue, you can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions for TurboTax Desktop users:

1. From the black bar at the top of your screen, select Online
2. Click Send Tax File to Agent
3. Click Send on the message that pops up
4. TurboTax will create a "sanitized" copy of your return information with no personal info
5. Post the 7-digit token number here in this thread

Here are the instructions for TurboTax Online users: 

Go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is. Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

We will then be able to review your file to see what you are seeing, and we can determine what is going on in your return and provide you with a suggested resolution.

[krisbhandare]

Thanks for these instructions, but since I use the TurboTax Desktop on my Mac, I don't see the option of "Online" or the black bar to click this option, am I reading your instructions correctly? Sorry, and thanks, I desperately need your help

Thanks in advance

Kris

[rjs]

Try the following to send a diagnostic file on a Mac.

• On the Help menu, select "Send Tax File to Agent."
• In the pop-up window click "Send Tax File to TurboTax Agent."
• Write down the token number and post it in this thread for MonikaK1.

[krisbhandare]

Diagnostic file sent to agent, Token number: 1206961

Thx

Kris

[rjs]

@MonikaK1  See token number in the reply above.

[MonikaK1]

I have reviewed the file. The program was showing a "no" answer to the question as to whether all of the loan proceeds were used for purchasing or improving the home, so there was zero deduction. Changing that question to "yes" produced a deduction based on the $750,000 limitation for post-2017, which was almost enough to exceed your itemized deductions, but not quite. 

If your loan was a refinance of a loan taken out before the law changed the principal limit to $750,000, see below. You can enter a 1098 as if one was received for the original loan amount and origination date and show $1 of interest, then enter the current one as a refinance of that one in order to get the $1 million debt limit. Or, show the refinance as having the origination date of the original loan. The origination date you used was in 2021, so it used the $1,000,000 limit.

What if I refinanced?

If you refinance debt, the loan limitation is based on when the loan was originally secured, and not when the loan was refinanced.

Any secured debt you use to refinance home acquisition debt is treated as home acquisition debt. However, the new debt will qualify as home acquisition debt only up to the amount of the balance of the old mortgage principal just before the refinancing. Any additional debt not used to buy, build, or substantially improve a qualified home isn't home acquisition debt.

Examples:
Susan secured a $1,000,000 loan to purchase a home in July of 2017. She refinanced the loan in July of 2019 when the loan balance was $950,000. Susan's new refinanced loan has a loan balance of $950,000. She does not have a loan interest limitation as her loan was originally secured to buy the home before December 15, 2017.

George secured a $750,000 loan to purchase a home in January of 2019. In August of 2019 George refinanced the home when the loan balance was $740,000. George obtained a new loan for $800,000 to refinance the outstanding home loan, but uses $60,000 to pay off credit card debt and for closing costs on the refinance. George would be limited to deducting only interest paid on $740,000 of debt.

For more information, please refer to IRS Publication 936.

@krisbhandare

[krisbhandare]

Thank You Thank You Thank You!! That did the trick! May be the info can be easily populated from last year's return and not have to answer so many questions that I could get one thing wrong, but Thanks again!!

[zomboo]

I am glad that you were able to help krisbhandare. But I am puzzled why it seems everyone, including tax experts, claim that a refinance of an original mortgage incurred after October 1987 and prior to December 2017 retains the $1,000,000 pre-2017 balance limit. According to Pub 936, a mortgage is either Grandfathered Debt or Acquisition Debt. Refinanced acquisition debt is still acquisition debt but with a new origination date. It is not grandfathered debt. If the refinance date is prior to December 2017, it will retain the $1,000,000 balance limit. Otherwise, it is subject to the $750,000 balance limit. What am I missing?