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Bug with refinance on a large mortgage

You should get a refund and if they don't, more evidence for a class action lawsuit.  I have sent the lawyers who are currently in another lawsuit against TT a message with links to this post.

https://www.classlawgroup.com/turbotax-free-to-[product key removed]n-lawsuit/

Bug with refinance on a large mortgage

Maximum refund guarantee looks like a PITA to actually access.  Not clear to me whether you can use a workaround to still file with TurboTax and still qualify.  Could be worth a try, but it's a lot of work for $50.  Here's the legal language:

 

To qualify, the larger refund or smaller tax due cannot be attributed to variations in data you provided for tax preparation or for positions taken by you or your preparer that are contrary to the law. If you received a larger refund amount or must pay a smaller tax due using another tax preparation method other than TurboTax, you must notify Intuit within sixty (60) days of the date you filed your tax return by submitting a claim with the following documents (i) Maximum Refund Guarantee Claim Request Summary, (ii) copy of your TurboTax store sales receipt or shipment packing slip, (iii) copy of your proof of payment for another tax preparation method (if applicable), and (iv) copy of your TurboTax data file, (v) copy of the printed return from TurboTax and the other tax preparation method, and (vi) letter stating your refund or tax due amount using TurboTax and your refund or tax due amount using another tax preparation method. Send it to Intuit Inc., ATTN: Maximum Refund, 2800 E Commerce Center Place, Tucson, AZ [social security number removed], US. Please use a traceable mailing method and maintain copies of submitted items for your records. Claims of non-payment will require photocopy substantiation of all required items. Please allow up to 6 weeks for processing and delivery. If after 8 weeks you have not received your check, contact us at https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turb[product key removed]r/00/2563....

JZ F
Level 1

Bug with refinance on a large mortgage

Even though I was told an update for this issue was available via email notification and I updated my desktop version, it still did not do the math correctly (actually no difference from earlier version). What a joke and why can they fix such a simple problem?! 

Bug with refinance on a large mortgage

Same issue. I received the email notification that it was fixed last week, and spent another 30 minutes on the phone with support -- still not fixed. And now, today, they are showing $200 additional tax due, despite all my numbers staying the same. WTH? I'm looking into other filing options even tho I've been a loyal TT customer for eons.

Bug with refinance on a large mortgage

Your calculation is wrong.

 

Put in zeros for each month that you didn't have the loan in 2020.

 

Do this for each loan and calculate the average principle balance.

 

For example, if the loan is for 1.2 Million but you only have it for December. Divide it by 12 and the average principle is 0.12M or 120K. Do this for each loan.

 

Details: Jan through November is 11 zeros. December is 1.2 Million. So the average is 1.2M/12.

 

Now, you can add them. Enter that for the outstanding principle.

Bug with refinance on a large mortgage

@Ilikeowls No calculations should be needed on our part. It is up to TT to publish software that is user friendly and CORRECT.

Mason213
New Member

Bug with refinance on a large mortgage

Just chiming in for the record that I am also experiencing this bug. Even after I zeroed out the first mortgage, instead of listing its "closing balance" as the amount before the final payment, TT still gave me a lower amount of deductible interest (which should have been all of it, since the loans are below $750K) and threw up that "the same as HP3L12 because true" message. 

alder1321
Returning Member

Bug with refinance on a large mortgage

Obviously a big issue with TurboTax that should not require any "work arounds". However I'm going a simple route that hopefully doesn't end up biting me but that seems to work. Our situation...we sold our house in June 2020, bought a new house in June 2020 and the mortgage was immediately sold off to another bank. I think a fairly common scenario. The way TT was calculating our average mortgage balance was putting us just over the $750K threshold limiting our mortgage interest deduction (some problem everyone on here seems to be having). For the online version, on the screen that prompts for the balance in box 2 of 1098 (balance at the beginning of the year or start of the loan if acquired during the year)  and the balance on January 1, 2021, I simply fudged the balance for the outstanding loan as of January 1, 2021 to get my average under the $750K threshold. I'm fairly certain this information only shows up on the worksheet which doesn't get filed with the IRS. The IRS only sees what's on Schedule A which will be accurate and which I can support if they have any questions. Might not be so simple if you're way over the $750K mark but seemed to work for me.

Bug with refinance on a large mortgage

I did what @alder1321 suggested for my refinance and even tho I adjusted down the principal balances so that they totaled under $750k (I actually ended up doing bad math so I ended up at $740k total, when the total of my loan is only in the 400's), TT still shorted me about $1,500 in interest paid. I followed the instructions to total all of my Box 1's together, and only enter the principal amount of only the original loan, and that did the trick. However, I'm feeling nervous about filing this way, as it only reflects one 1098 and I have 2! Additionally, I did cash out when I refinanced to pay off my HELOC (HELOC 1098 is still in TT since it's was a small amount), so while every cent of my cash out and HELOC was used on my home, I'm nervous to misreport it as if I only received one 1098. I think the Schedule A will come out ok, but....I don't know for certain. Any advice from you experts? Ugh. Why can't they just fix the bug properly????

eRICKSON1
New Member

Bug with refinance on a large mortgage

Token Number 747432 please help me

Bug with refinance on a large mortgage

I just discovered this bug doing my 2020 taxes, but it also applied to my 2019 taxes that I did with TurboTax, and cost me about $800. This is absolutely atrocious. Has anyone ever just re-filed their taxes with the correct info? I might just switch to another program that hopefully gets this right.

 

The worst part of the bug is that the program never actually tells you you exceeded the $750,000 mortgage balance limit, if it told you that at least you would know something is wrong. But this bug has existed for multiple years, and they won't even make it easier for users to recognize and correct on their own (much less just fix the bug.)

 

 

Bug with refinance on a large mortgage

@steveylang Class action lawsuit. You aren't the only one who was screwed last year on your taxes due to negligence on TT's part. If you do some looking on here you will find a lot of people are having this issue and TT isn't doing a **bleep** thing. In fact they are asking you to submit made up info to the IRS to get around their lack of coding ability. 

Bug with refinance on a large mortgage

I'm in for the lawsuit! I think the whole idea of Turbotax is that I don't need to read IRS regulations and do calculations by hand

Bug with refinance on a large mortgage

If you are experiencing an issue with the Average Balance where there was a refinance involved, please see this FAQ: What do I do if I have multiple 1098s from refinancing my home debt? 

This post will be closed to replies. If you still need assistance feel free to start a new post. 

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