I refinanced and have two 1098 forms

[rogelio_1]

Called again about my investigation # today at 3p PST.  Agent STILL says it is open.  So far, this is going on day 8 since reported and opened for investigation. No ETA.

[sathiya_moorthi]

Seeing same issue in CA.  If the TT wrongly calculated average balance is less than $1M then full mortgage interest is deductible in CA ?

[rogelio_1]

I have twice tried to reply to this post, and am now having my comments filtered out by TurboTax, FYI

[rogelio_1]

The CA mortgage deductible interest cap I believe is 1M.

The problem is that TT is miscalculating by around a 1.5x factor your average mortgage balance, so unless your home is under $666k (where it miscalculated to $1M), you will be losing money on your refund if you refinanced. 

For example if your home is worth 1M... your new refi loan balance is correct, but your original loan which has a ~$1M start and $0 end (because it's closed) will be incorrectly averaged as $500k ($1M-$0 / 2) and so it sums that with the new loan to come out with an incorrect balance of $1.5M (amazing) for your $1M home.  The result is that you go from having 100% of your mortgage deductible (because it was at the 1M cap), to now only having 67% of it deductible (because it thinks you are over the cap by $500k).  You would lose out tens of  thousands of dollars of truly deductible interest... for example in this scenario if you had paid $45k in mortgage interest paid in the year, you would be losing out on deducting $15k of it (because it sees only 67% of it as being deductable)... which could translate into a refund loss of somewhere around $3-5k.

[rogelio_1]

I’m personally losing around $3k if I hit “submit” for state using TurboTax until they fix this. The greater your house is over $666k, the more money you are losing because of their incorrect average mortgage balance calculation (compared with your marginal tax rate, of course). Bottom line is if you have a home over $666k and refinanced last year, you are without a doubt losing qualified deductible interest on your home and are being shorted a valid CA refund due to TurboTax's erroneous calculations / shoddy unpatched software.

Every time I call turbotax, they say somebody will be emailing me.  Nothing.  no emails.  Nobody on their team monitors this site either -- not one posting from an actual TurboTax employee.  Not one.

I like the idea of messaging people at Intuit with public  profiles.   How about you post this thread on their company profile pages so their colleagues see how devoid of accountability their organization is.

[pz5921087]

Hi rogelio_1

Thanks for the update, it is really unacceptable that TT start to filtering your comment!

I inMail their VP, but so far no response yet.

I am not sure how to post on their company profile, does it allow anyone to post?

[weiwuwei001]

I have the same issue, still waiting for their fix patch.

[rogelio_1]

According to Intuit's email from their CEO below, their business continuity plan is in place and means they are working remotely; therefore, there is no reason  COVID-19  should impede their ability to provide this patch.  Here's the CEO's name -- feel free to attempt to contact them regarding this thread, so that we in CA can receive the amount of refund we're entitled to in order to prepare our own selves and families against Coronavirus:

Dear Customers and Partners,   We recognize that with the constantly changing COVID-19 situation around the world, this is an unprecedented time for everyone — a time that, for many, is filled with uncertainty. Our hearts and thoughts go out to each and every one of you.   I want you to know you have our commitment to continue providing you with the products and services you depend on. For more than 30 years, Intuit has focused on our mission to power prosperity around the world. This enduring mission guides us as we closely monitor, assess and respond to this situation.   As a valued customer or partner of one or more of our products and services — TurboTax, Turbo, QuickBooks, Mint, ProSeries, ProConnect and Lacerte — I want you to know that we understand the importance of the products and services we provide to you and your business. You rely on us to help power your livelihood, and we understand the responsibility that entails. Meeting that responsibility day in and day out, in any environment, is our primary focus.   In response to the current situation, we’ve implemented our business continuity plan — which examines all areas of business operations at every Intuit site — and have taken actions to ensure continued service to our customers. Rest assured, we are prepared to serve you.   First and foremost, our plan ensures the health and safety of our employees, so we can continue to deliver and support the products you count on. Considering the most recent news and announcements from the World Health Organization (WHO) and Centers for Disease Control and Prevention (CDC), we have made the decision to have employees in our offices around the world who can perform their jobs remotely, work from home through at least April 6, 2020. We’ve also offered extended sick leave for our employees should they need it. And we’ve temporarily suspended business travel.   We know many are concerned about the impact the global health situation is having on hourly employees. Intuit is continuing to pay our front-line hourly service workers during this work-from-home period. We are proud to support them in their critical roles as security officers, receptionists, food services, building operations, janitorial, fitness, mail services and shuttle drivers.   These precautionary measures have been taken to limit the potential spread of the virus, to support our employees in this challenging time and to ensure we maintain our ability to serve you, our customer, for the long term. Our senior leadership team remains vigilant and is monitoring the situation in real time and responding rapidly as conditions evolve.   Please be safe and stay healthy.   Sasan Goodarzi Intuit Chief Executive Officer

[forrest1688]

I have the same issue. Any update?

[VictoriaD75]

For online versions, after entering the 1098 interest information, continue through the screens and TurboTax will ask you if the interest needs to be limited.

For desktop versions:

• In Forms view, locate and click on Tax & Int Wks on the left from the forms list
• On the form, scroll to Mortgage Interest Limited Smart Worksheet
• Click on NO to the right of the question, Does your mortgage interest need to be limited

[rogelio_1]

@VictoriaD75 

The screen you're showing is limits for FEDERAL tax (and doesn't pose a problem).  That screen does not carry forward for CA state tax, nor is there a separate dialogue that lets you manually enter what your average mortgage balance is for CA, so the calculation is wrong in the worksheet and thus your deducatable interest (only for CA  / state).

[sreiber]

They keep posting same “solution” over and over again, even after folks explain why it doesn’t work.  This shouldn’t be that complicated to fix!

[SemperFi2006]

I spoke today with a tax expert affiliated with Military One Source. He said this is something that is common, and that you should enter only the first 1098 and combine the interest. I also combined the property taxes, however, I went to the tax collector website for San Diego to make sure I had paid the right amount of property taxes. It usually is in two installments, but a payment is for the year before. You can also call your mortgage lender to verify the amount of property taxes paid for 2019, since usually they are the ones that make those payments from your escrow account. I wasted so much time trying to figure this out, I hope this can help someone!

[DDC53]

where do I add the information to claim the refinance mortage?

[VictoriaD75]

Follow these steps to add mortgage interest deduction if that is your area of concern:

1. Under the Federal menu, choose Deductions & Credits
2. Expand the menu for Your Home
3. Click Start/Revisit next to Mortgage Interest and Refinancing (Form 1098)
4. Enter the information on the screens that follow. You may Add a 1098

The limit on the amount of interest has changed under the Tax Cuts & Jobs Act. The interest deduction pre-TCJA has been available to qualified mortgage debt up to $1 million ($500,000 married filing separately).

Through 2025, the TCJA has lowered the amount of qualified mortgage debt to $750,000. For qualified mortgage debt incurred on or before December 15, 2017, the $1 million limit remains in place, thus "grandfathering" existing mortgage debt.

If you need to remove the interest limit, follow these instructions.

For desktop versions:

• In Forms view, locate and click on Tax & Int Wks on the left from the forms list
• On the form, scroll to Mortgage Interest Limited Smart Worksheet
• Click on NO to the right of the question, Does your mortgage interest need to be limited

For online versions, after entering the 1098 interest information, continue through the screens and TurboTax will ask you if the interest needs to be limited.