Multiple 1098s for Primary Resident

[sidbee]

FYI I am using 2020  Turbo tax Premier

In 2020 , i refinanced by primary Home Loan 3 times , and each time the loan was sold to another servicer. So i have 7 1098's , My Max Loan amount is ~350K.

1. Original 1098

2. First Refinance 1098

3. First Refinance/New Servicer  1098

4. Second Refinance 1098

5. Second Refinance/New Servicer  1098

6. Third Refinance 1098

7. Third Refinance/New Servicer  1098

When i add all the 7 1098s , Turbo Tax is adding all the Loan Amounts and limiting by deduction . This doesn't seem correct . I am getting more refund in HR Block , But have always used Turbotax, so dont want to make the switch. Can someone help me ?

[JotikaT2]

It sounds like the input is showing the overall amount of your mortgage balance as exceeding $750,000.  If so, the amount of your mortgage interest would be limited.  

Mortgage interest deduction limits

You will need to review your input on each loan to ensure the following items are properly accounted for.

The loans that were refinanced and not there at the end of the year should reflect a $0 balance in Box 2 under the screen titled Let's get the details from your home loan 1098 as shown in the following sample.

You will also want to select that the loan that was refinanced and is no longer there at the end of the year is marked as paid off during the year. 

Please see the following link for additional information on entering the refinanced mortgage interest expense.

Refinanced mortgage input

[sidbee]

If the 1098 provides a Mortgage Principal , How can i make it 0  ? while inputting the data  .

[DMarkM1]

Some customers are experiencing a mortgage interest deduction when entering multiple 1098s for refinancing their home.  Here is a link with the steps to follow to enter multiple 1098s as a single 1098.  

[dgman]

The posted solution does not work as the review process then prompts you to enter the starting balance.

Seriously - how lame and pathetic that this is an ongoing issue for a number of years now. I've been a customer of Turbo tax for more than a decade and now have to look for another vendor because the company is too cheap or incompetent to fix what a very common need. Shame on you Intuit!

[dgman]

This solution is very disturbing as it requires falsifying information.

[Anonymous]

@dgman

You are not falsifying anything, so you can relax.

  You are simply doing what is required to make the software report correctly on the tax return.  This section is more complex than it seems.  To fix one thing, breaks another, and this is the way to handle it.  

[dgman]

#1. I am referring to the suggestion "Here is a link with the steps to follow to enter multiple 1098s as a single 1098. "

This is entering false information.

#2. The first solution does not produce the correct results. It adds to 2 mortgage balances and reports them as the average balance. This is wrong. The software has a bug. It then incorrectly calculates the amount of deductible interest by using the ration of 750,000 by the sum of mortgage balances instead of the average(?). How do I know this? Because I studied the worksheet. It should not add the mortgage balances since they were not held concurrently - one was used to pay off the other.

Still waiting for a working solution or fix to this bug.

[Anonymous]

It's not entering false information... because what flows to the tax return is the correct data. There is a difference between the software entries and the tax return.  The tax return just reports a number. It doesn't care how many 1098s you have.  it's not an issue.  

[Anonymous]

There is a different work around for the average balances issue - enter $1 for the mortgage amount on the second entry.  Again, everything that goes to the TAX RETURN ends up correct.  A worksheet isn't the tax reutrn. 

[dgman]

Thank you @Anonymous 

That did not work for me. What did work was to enter $0 in box 2 for the paid of mortgage and then manually enter the information into the worksheet when prompted after the review. That seems to get it right.

Still - WTF Intuit? This should have been fixed a long time ago. There is no excuse. Your customers shouldn't have to do these work-arounds. Users have been reporting issues with this for the last few years. Customers like myself shouldn't have to figure out the work-around solutions for you.