Deductible Mortgage Interest - Average Loan Balance

[veggiebergertoo]

On the screen, it says "You may need to limit the deductible mortgage interest  on your home acquisition debt if any of these situations apply:

• Avg Loan Balance exceeds $1M....
• Avg Loan Balance Exceeds $750k...

Then you choose if that does or doesn't apply to me. When I select that it doesn't, which is accurate, my Federal Tax Due calculator updates to a refund. However when I click continue, that refund goes away to a balance owed. Not sure what's going on there. 

[NCperson]

I've seen other posts like this.... I think the question is being asked backwards..... so you are getting the opposite outcome than what you are expecting.  

the way it is supposed to work is that if your mortgage balance is greater than $750/ $1mm, your mortgage interest deduction is LIMITED; otherwise it is not limited. 

[kylijia]

I am having the same problem. This appears to be a software bug. 

[Bruce20]

I'm having the same issue.  I check the "No, none of these situations apply to me" and it auto-calculates my savings.  But.... when I click on "Continue" is undoes this and reverts to as if I said "yes".  Very frustrating!

[Bruce20]

More than one way to skin a cat.  Check on the "no" and do NOT click on Continue.  Rather "Save" the return and move onto another section.

[iamwlh]

I had the same problem but just tricked the software to pass it.  An error message popped out saying something is missing in the mortgage interest section when I finished everything and the software was reviewing the return. I clicked it, nothing was wrong, but then the federal refund turned into a balance owed. I found out that my choice to the same "average loan balance" question got changed and I couldn't save the option "doesn't apply to me". I finally overcame it by choosing "doesn't apply to me" and then "federal review" on the top bar, and the federal refund stayed. So don't click "continue" and jump to the other section if you get stuck in this step. 

[jonand15]

This seems like a pretty bad bug. Saving rather than continuing worked for me, but I'd hate to think there are folks out there who end up writing a check to the government based on this!

[OTAdac]

I had the same problem.  Thanks for the suggestion here.  It took me a few hours to check the work sheets many times and googled this issue.  I would have to pay a lot more b/c it concluded that I can only take standard deduction.  I wish TurboTax fix this problem so that people don't have to overpay or trick the software to do what it supposed to do.

[nirhasabnis]

Really annoying. Spent almost 1 hr re-entering mortgage data at least 10 times.. Trick to save and not hit continue helped though.. Thanks.

[Shengliang]

I had the same problem. I have spent hours on this. and I found the workaround is to not click 'continue'. 

The bug will definitely confuses people and cause them to lose deductibles.

Hope this bug can be fixed soon and provided with a patch/update. 

[JotikaT2]

The problem may occur if you have refinanced during the year, and the input reads your data as exceeding the $750,000 limit to be deductible. 

If you are working in the Desktop version, you can try the following as provided by jmcglass. 

• Click on the View link on the top menu bar 
• Click on Forms 
• Locate and click on 'Tax & Int Wks' on the left-hand side of the screen (under Forms in My Return) 
• On the form, scroll down to the 'Mortgage Interest Limited Smart Worksheet' 
• Click on the 'No' box, to the right of the question 'Does your mortgage interest need to be limited.' 

If you are working in the online version, please go back to deductions and credits and mortgage interest.  

Click through until you get to a screen that says "Do any of these situations apply to you?  Mark yes on the next screen, take out the zero, click back and choose "No". 

[SpudsBud]

Awesome, you just saved me $3,000+.  I couldn’t figure out how to override Schedule A until I found your post.  Interesting that the Schedule A Deductible Home Mortgage Interest Worksheet (the one with Loan 1, Loan 2, etc... at the top of the worksheet) computes the average balances correctly since it allows the input of the mortgage loan duration during the calendar year as opposed to a simple beginning-of-year and end-of-year two-point average - there was just now way to get that result to Schedule A initially.  

[myowntax]

It keeps limiting.  It is not AVERAGING the balances it is adding all the balances as if I took a new loan and added it onto the amount borrowed.

[DaveF1006]

Some TurboTax customers are experiencing an issue with their Home Mortgage Average Balance. This can cause in the the Home Mortgage Interest to be incorrectly limited.

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