This makes no sense. I believe that there is a glitch in 2020 TT CD. I have two lines for my 1098. One is $20k and one is $7k. When I delete the $7k and leave the $20k, I will get MORE state refund. Federal didn’t change. When I add back the $7k with the $20k (total $27k for the two lines), I will get LESS state refund. Federal doesn’t change. How does that even make sense?
Now if I delete the $7k line and I go into the $20k line, edit and combine the two figures. I edit the number to $27k, both federal and state refund will increase quite a bit. Why does TT not increase my refunds when the two 1098 lines are separated, totaling $27k?
Why does tax purposes treat one line totaling $27k differently than two lines totaling $27k?
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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.
If you're experiencing the issue above, please go here to receive email notifications when any updates related to this issue become available.
TT emailed me today and said that the issue is resolved. They asked me to install the update which I did. I installed the update and tried again. The issue is still there. As I add more 1098, my federal refund decreases. Help!
Here is the workaround solution:
If you have more than one 1098 form, I will recommend you to combine all 1098 forms and enter as one. I am attaching a TurboTax link for the instructions how to do claim your mortgage interests. Click here:
For tax years prior to 2018, your mortgage interest deduction is generally limited if all mortgages used to buy, construct, or improve your first home (and second home if applicable) total more than $1 million ($500,000 if you use married filing separately status). Beginning in 2018, this limit is lowered to $750,000. For more information about the mortgage interest deductions, click here: Mortgage Interest deduction
Thank you. So the email that as sent to me actually did not fix the problem with the update like it said it would?
It does not address what to do with box 2 (assume same bank and same loan) if the Outstanding mortgage principal is different numbers. Which one do I enter?
What do I do about box 3 the Mortgage origination date? Which one do I enter?
The mortgage origination date is the pruchase or acquisition (closing date) when you first purchased your home. Use the first mortgage.
You can enter this information in the Deductions & Credits tab.
1. Click Federal in left hand menu
2. Click "Deductions & Credits" tab at the top of the page
3. Scroll down to the "Mortgage and refinance" section
4. Edit/add
5. Edit your 1098
6. Put in the date you closed on the original loan
How do I handle multiple 1098 mortgage forms?
If you have multiple 1098 mortgage forms, you’ll enter them one at a time. After going through the steps with the first one, you can add a lender when you get to the Mortgage deduction summary screen. (In the case of a refinance, it's best to enter the 1098 from your original loan before the 1098 from your refinance.)
But, if they're both from the same lender, and one of them has the “Corrected” checkbox marked at the top, enter the corrected 1098 and discard or shred the other one.
What do I do if I have multiple 1098s from refinancing my home debt?
If your total home debt is under $375,000 ($250,000 for married filing separate) there is nothing new for you to do in 2020. Enter each 1098 as you normally would.
Home Debt Over $375,000
Under tax law, you are limited on the amount of home interest you can deduct. The limit is based on the loan amount and date of the origination of debt. We want to make sure we calculate this correctly for you.
If you refinanced last year, you’ll have a Form 1098 from your previous lender and one from the lender you refinanced with. You’ll need both forms.
Follow these steps to enter your mortgage information:
Next, finish adding info for boxes 2, 3, 7, and 11 using Form 1098 for the original loan.
What if I have more than two 1098s?
You should combine all of the 1098s directly related to the refinance and enter it as one 1098. An example of this is if you refinanced two loans into one loan. Any 1098s not directly related to the refinance should get entered separately.
What if I paid points?
Points on Loans Paid Off in 2020: Enter the points on your 1098 you have started and mark you paid off the loan when promoted.
Points on Loans on New Loans: You will want to enter a separate 1098 to cover these points paid. When prompted, enter 0.00 for Boxes 1, 2, 5, and the Property (real estate) taxes box, and checkbox 7, as you’ve already entered the details on your first 1098. For Box 3, add the date in 2020 when the loan originated.
So you are saying if it has the following:
first 1098 box 2 = $825k
first 1098 box 3 = 06/01/2019
second 1098 box 2 = $800k
second 1098 box = 01/01/2020
Then I would just add the box 1 together (sum the total interest from both 1098s), and enter $825k for box 2 and enter 06/06/2019 for box 3?
Clarification - The first 1098 isn't the first origination date since I have refied multiple times. The original date was back in 2014 or so........But are you saying use the information from the first 1098 which as the higher outstanding mortgage principal (box 2) and older mortgage origination date (box 3)?
Yes. use the information from the first 1098 which as the higher outstanding mortgage principal (box 2) and older mortgage origination date (box 3.
The mortgage origination date is the pruchase or acquisition (closing date) when you first purchased your home. Use the first mortgage.
If you have multiple 1098 mortgage forms, you’ll enter them one at a time. After going through the steps with the first one, you can add a lender when you get to the Mortgage deduction summary screen. (In the case of a refinance, it's best to enter the 1098 from your original loan before the 1098 from your refinance.)
But, if they're both from the same lender, and one of them has the “Corrected” checkbox marked at the top, enter the corrected 1098 and discard or shred the other one.
Is there any update on when you plan on fixing the issue? I was told withing days, but that was weeks ago.
Yes. There is an issue with the deduction and credits section. TurboTax is working to fix it. We do not have an estimated date of correction, at this time. I suggest you check back often to see if the correction has been made.
There is a problem with the Contributions section of the Itemized deductions and also the above the line $300.00 deduction. There are also other areas of the itemized deductions like mortgage interest that is also under construction. Because of the many changes due to the CARES Act, IRS is still developing the forms and publications on this issue. Once IRS finalizes the forms, we will be able to update TurboTax to accurately reflect your Itemized deduction.
4 weeks have gone by. Do you have an update?
Are there other issues that you are working on that I should be aware of before I try to file? This problem almost cost thousands of dollars. There should have been an alert in the software.
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