I refinanced and have two 1098 forms

[hellokitty74]

I went from a refund to OWING 4k! Something is SERIOUSLY wrong.

[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.

If you're experiencing  the issue above,  please go here to receive email notifications when any updates related to this issue become available.

[doT]

The bug has been on the forms since at least last year.  I would double check those returns because you likely overpaid if you refinanced last year as well. Best advice I can give is to override manually. It’s not too difficult but it’s a pain and annoying. If 700k is the mortgage then you can deduct 100% since you aren’t above the new $750k limits for fed. 

[hellokitty74]

Hmmm  At the "Let's wrap up your mortgage interest deduction" - I didn't get that prompt

[JoannaB2]

Yes, we are aware of this experience, please click here to sign up for updates. Or, you can click here to contact us directly

[karenrner]

Unfortunately, I noticed my taxes were done incorrectly last year too!  We did a refi last year, as well, as the State worksheet has the same problem.  This is unacceptable.  I never would have noticed if I haven't reviewed all the forms this year.  Using Intuit's product has cost me thousands of dollars!  Without any proper guidance on this issue, on both this year and last years' products, other than "wait"... I won't be using them anymore!  I have started over on Taxslayer and had no trouble at all.

[diha412]

I followed the steps from KrisD15 expert   on page 1 of this thread and it worked.  I entered 3 1098s and the calculations are correct.   One 1098 was the original, the second was a temporary company that held the refinance until they sold it, and the third was the current mortgage holder.

[JantovenNF]

@diha412 

You might want to double check it.  Based on talking to others, it appears that glitch is still in place and TurboTax has NOT fixed it just yet.

[Diha724]

I did check it. Before it wasn’t totaling all of my interest acting like my mortgage interest deduction was limited. After following those steps it includes all the interest I paid for the 3 different 1098s.

[JoannaB2]

Some TurboTax customers are experiencing an issue with their home mortgage average balance. This can cause the home mortgage interest to be incorrectly limited.  This may be affecting your tax return.

Please sign up for email notifications when an update related to this issue is available here.

See also this TurboTax Help.

>

[4Blakes]

@JoannaB2 I signed up for the email notifications but have not seen anything in my inbox. When is the anticipated fix date?

[JohnB5677]

If you have multiple 1098's you can enter them without combining them.

The IRS instructions for completing Form 1098 state that box 2 should be the amount of outstanding principal on the mortgage as of January 1, 2021.  If the loan was no longer being serviced by that company, there would be no outstanding principal on that mortgage.  

Entering '0' into box 2 for the first mortgage in your tax return is the correct way to handle the situation.

[JantovenNF]

@JohnB5677 

Huh, that's odd.  You're right - the IRS instructions for 1098 say:

"Box 2. Shows the outstanding principal on the mortgage as of January 1, 2021.
If the mortgage originated in 2021, shows the mortgage principal as of the date
of origination. If the recipient/lender acquired the loan in 2021, shows the
mortgage principal as of the date of acquisition."

However, for the TurboTax online instructions, it says this:

"Your outstanding mortgage principal balance is the amount of money you still owe on your home loan.

If you took out the loan in 2020, please input your original loan balance. If your loan was funded before 2020, please input your balance as of January 1, 2020."

But why would the IRS mention about loans acquired in 2021?  We wouldn't be reporting mortgages originated in 2021 for the 2020 tax year.  Strange.. any clarification on this?

[charliedavid]

Doubt they fix it, would be completely shocked if they did, this thread has existed for at least a year, and they have a recommended 'fix' by submitting inaccurate info on your return.

Thousands of people have probably used the software this year already and didn't notice, or thought it was working properly, they got screwed, I almost got screwed, but hard not to notice an 6k difference on my return. TT says they will maximize your return, but the software literally has a glitch which literally does the exact opposite of maximizing, in fact it minimizes it due to erroneous calculations.

[ColoTax]

You're absolutely right.  Hard to see how this doesn't end in a lawsuit for thousands of filers.  If I ran TT, I'd probably make this a priority instead of posting a fake "We're working on the problem" reply every few days.