Home Office Mortgage Interest Glitch

[mg811]

Hello, there seems to be a glitch in the 2023 TurboTax Deluxe Desktop Download version for Mac. The software doesn't allow you to enter your mortgage interest as a home office expense. It is locked at $0 and you're unable to change it in EasyStep or override it on Forms. You can only add it as a direct expense (when it's supposed to be an indirect expense).

If you try to separately add it on the Deduction tab (for Form 1098), it doesn't read it as a deduction and doesn't apply it to your Schedule A.

References: IRS Form 8829 instructions (https://www.irs.gov/pub/irs-pdf/i8829.pdf) as well as TurboTax's page on Form 8829 (https://turbotax.intuit.com/tax-tips/small-business-taxes/what-is-irs-form-8829-expenses-for-busines...) both instruct you to multiply the mortgage interest by the percentage of your home that is dedicated exclusively to your business and then claim the rest on Schedule A.

[ThomasM125]

If you have a loss on your business, the home mortgage interest deduction may be unallowed in the current year. If that is the case, it can be carried over to future years.

You can learn more about the home office deduction from the instructions to Form 8829 here:  Form 8829 Home Office Deduction

[mg811]

Thanks for the information. Even if it's unallowed or limited, which doesn't appear to be the case, you should be able to type in the information so that it can carry forward for next year. In this case, TurboTax isn't allowing users to report mortgage interest at all.  Also, even if it's unallowed, you should be able to claim the remaining much larger portion on your Schedule A. But the software is just ignoring the information without any explanation. Any other ideas? 

I've attached a screenshot for the form that says "Tell us about your home expenses." You can see the first row is locked at $0 and the form is cutting off the remaining numbers after the first digit. Anyone else having this problem?

[RobertB4444]

I'm unable to duplicate your error.  Are you saying that the mortgage interest deduction is not appearing on your return at all?  

Disallowed home office deductions don't roll forward into the upcoming year - if your home business has a loss then the home office deduction for that year is just gone.  

But you are correct that the mortgage interest should be entered onto schedule A in its entirety if you aren't using it elsewhere on the return (and assuming that you can itemize deductions).

@mg811 

[mg811]

That's correct. In addition to the problem with the home office question being defaulted and locked at "$0", the mortgage interest is not appearing on my Schedule A (I have enough to itemize). I was able to enter the information from my 1098 in the deductions section. However, TurboTax is not applying it to the return.

I was able to find a thread about a similar problem users experienced in 2020: https://ttlc.intuit.com/community/tax-credits-deductions/discussion/turbotax-premier-not-deducting-m...

In that thread, someone recommended going to the “Tax & Int Wks” and go 3/4 way down to “Mortgage Interest Limited Smart Worksheet” and make sure “Does your mortgage interest need to be limited:” is set to no. In my case, the answer is set to yes, and there's no way to change it.

Any ideas?

[AnnetteB6]

Double-check in the mortgage interest section of your return that you did indicate that the interest is 'secured by a property' that you own.  If this is answered 'no' instead of 'yes', then the mortgage interest is not deducted.

Use the following steps to go back to that section:

• On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner) 
• This opens a box where you can type in “mortgage interest” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
• The search results will give you an option to “Jump to mortgage interest”
• Click on the blue “Jump to mortgage interest” link 

@mg811