I refinanced and have two 1098 forms

[zoeiryo]

I met same issue for refinancing debt interests. I refinanced for same property in year 2019 and TT showed combined amount for both loans as average loan amount . As it's greater than 1 million so partial of interest was not taxable. I logged in TT web version to schedule a free CPA call back. I received a call back in about 10 mins and he solved my problem.

To solve this by editing California state tax item by item, go to Mortgage Interest Adjustment and fill out the 2019 Ending Blanace to be 0 for the old loan.

Hope it helps.

[pz5921087]

are you using desktop version or web? Where to find the Mortgage Interest Adjustment?

[hfeng2005]

I have exactly the same problems, and I'm in CA too.  Turbotax should fix this problem by issuing a patch ASAP!

[zoeiryo]

Desktop version. You have to go to step by step on state tax. Click edit then you will see. 

[rogelio_1]

I spoke with TurboTax on the phone for 2 hours. They acknowledged this is a serious error in not being able to correctly calculate the average mortgage debt balance with a closed original refinanced loan. I said “you have 30M CA residents with homes In many case at or above the state limit, and your calculations set my balance off by $600k — effectively having me lose 17k in claimable interest ). The person didn’t respond to that other than saying, “yes, this is a big problem” and that they will respond by Tuesday to see what will be done. No commitment to fixing it.  AND they said the problem IS present both on desktop and web versions. 

This is unacceptable. Probably tens of thousands of people refinanced loans in CA last year and among those probably half use TurboTax. For me, Tuebotax in its current state results in me losing about $4k in incorrectly calculated claimable state mortgage interest. So much for my “lowest refund” guarantee — this is meaningless when the software is error riddled. 

If TurboTax does not post the fix to this in the next week, I will be posting the recorded call of mine (they noted they record calls, so I did the same) to Reddit to gather attention to the tens of thousands of people likely already having filed and lost thousands of dollars due to their calculation errors and shoddy programming for CA refinances. 

[doT]

In response to zoeiryo

This is not correct.  Turbotax will just take the average for the year.  So if you had a $800,000 mortgage and you put $0 for ending balance, it'll calculate it as you carried a $400,000 mortgage when adding up your total mortgages.  If your refinanced loan was $800,000, then it'll calculate it as though you had $1,200,000 total mortgages for the year instead of $800,000.  

The program is wrong.  The only way I know how to fix it is to just manually adjust it.  It shouldn't matter since the adjusted amount is what's put on the form.  It's annoying and frustrating because it gives less return than you should get if you let it calculate it.  

[rogelio_1]

@doT 

This is precisely the problem. It will make your average mortgage balance 1.5x what it should be because it is doing a moronic old loan / 2 calculation which doesn’t apply for a closed refid loan (only for a current loan). 
I do not see a way to manually correct this in the worksheet however because the calculation for the mortgage interest for loan #1 (the old closed loan, or the $400k added in incorrectly in your example) is a forced calculation — I can not override the way it calculated the combined average mortgage balance across both loans without deleting out the old loan (in which case it won’t include the paid mortgage interest). Only other way is to input an inaccurate average balance on the current loan that’s exactly less by the erroneous amount of the original loan. Either way will generate false worksheets in the eyes of the IRS should you get audited. This should not be the solution TurboTax and Intuit provides — they NEED to fix their software which incorrectly calculates the average balance when a closed refinanced loan has a zero balance. 

This is not rocket science. The software for CA should ask if the loan is a refi like it does for federal and then calculate based off the final balance prior to close for the original loan; alternatively it should allow you to manually enter your average mortgage balance across both loans for the year as a separate number instead of calculating it erroneously. There is no option to override the worksheet because of the forced calculation adding both together in error. 

For me, this makes the denominator 1.5x greater over the $1.1M CA limit and so my ratio goes from like what should be .9 to 0.6, losing out $17k in claimable interest deductions, or a loss of around $4k in my refund.

[rogelio_1]

I’m thinking everybody on this thread or those who already filed without a patch and had the Average mortgage balance incorrectly calculated should fall under this 100% calculation guarantee:

https://ttlc.intuit.com/community/charges-and-fees/help/what-is-the-turbotax-100-accurate-calculatio...

Ask TurboTax for your thousands of lost dollars back due to their erroneous calculation on a refi loan for state (CA in specific). 

I’m still awaiting a formal reply back from intuit regarding this open bug ticket. 

[weilin_chao]

These TT experts kept giving out useless information and not solving the problem. Not sure if they really understand our problem.

[rogelio_1]

Tuesday has come and gone and intuit/TurboTax has still not provided me a follow up to the aforementioned post regarding the erroneous average mortgage balance forced form calculation for state when incorporating a closed loan on a refi.  I will be going to Reddit tomorrow if I get no response by close of business tomorrow — including the audio call posting of them acknowledging over $17k of erroneously excluded deductable mortgage interest as a result of their calculation bug that remains unpatched for ALL Californians that had a refi in 2019. 

[mauisupgirl]

I’m going to shoot you all straight here... after hours of trying this way and that, forwards and backwards, I gave up and went to Jackson Hewitt.  I had ZERO problems there and it was cheaper.  The only downside is that you have to type in your numbers vs. taking photos and it auto uploading your numbers, but I always double triple check anyway, so it didn’t bother me.  I just couldn’t risk it being so wrong here in TurboTax and it was too difficult trying to find a solution. 

[rogelio_1]

I was told yesterday that my investigation is still being reviewed by Intuit (they provided me with the investigation #... I reminded them that taxes are due just a month away) -- the agent noted it will take another couple business days and then will respond with an outcome.  Allegedly the agent took copious notes, and stated that if it's confirmed they will be building a listing of all affected users.

We shall see what comes of this.  If there isn't a patch to correct the issue, I will be escalating to their senior management, as I've saved all my records and conversations with where it's acknowledged in its current state there is no solution, except for a patch, other than to manually correct the forms by hand and mail them in (...which is an admission their software is generating calculating errors requiring manually overriding what can't be corrected due to its forced calculation)

[rogelio_1]

Called again today.  Investigation is still open -- they said it requires a patch today.  I am going to call Intuit every single day and post here to report the status to keep them accountable.

[pz5921087]

Thanks rogelio_1 for the keeping pushing them fixing this issue.

Did you post it to Reddit? 

I am wondering if anybody has a contact of their SW engineering management, or talk to their management via Linkedin, this is serious bug impact a lot of users, but they seem to not giving a shxt about it

[pz5921087]

I think I find their big boss account,  if you have linkedin account, please connect with these two executives and escalate this issue

https://www.linkedin.com/in/mariannatessel/

https://www.linkedin.com/in/kwalecki/

This is probably the only effective way to bring this bug to their software engineers attention