I refinanced and have two 1098 forms

[GoneSailin74]

Seems like something TurboTax should be able to do. 

[ReneeM7122]

Here is how to handle two 1098s forms:

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:

1. Gather all of your 1098 forms related to your refinance (the form from your original lender and the form from your new lender)
2. Grab a calculator and add together the box 1 amount from each form. Enter the total in TurboTax as Box 1 Mortgage interest.
3. Add the Box 5 amount from each form and enter the total as Box 5 Mortgage insurance premiums. (If you weren’t required to pay mortgage interest, these boxes will be blank on your forms and you won’t enter anything.)
4. Add the property tax paid from each form and enter it in the Property (real estate) taxes box.

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.

Here is a link for more information.

[Jsanford9027]

Or you could just fix the software. Anyways competition worked fine. I'll never use tt again! 

[GoneSailin74]

Which one?

[si29xnm]

I'd like to know which other software does mortgage deduction correctly when refinancing is involved. It is very troubling that TurboTax can't handle two 1098's from refinancing correctly. Now I have to go back and check earlier tax return to make sure TurboTax didn't limit my mortgage deduction when I refinanced in the past.

[Jsanford9027]

They remove the post if I put the name of the competition, but it starts with tax and ends with the name of a 80's hair band. 

[EnjoyABQ]

For desktop version, see prior posts about manually updating form in Form view. This should work just fine for refinance where you had only 1 loan at a time. You only need to update 1 user field in Tax & Int Wks Form. Update Line A2 in the Mortgage Interest Limited Smart Worksheet section. 

[mhaanraadts]

I had to change on my Home Mortgage Interest Worksheet in 'Forms' mode:

- Item 9 : Check this box if you (....) paid off this loan (...)

Below section 13

- D: Date loan was paid off -> enter date

- E: Outstanding mortgage principal as of 12/31/2020: $0

[GoneSailin74]

It still isn’t working for me. 

[EnjoyABQ]

You might want to be careful setting the old loan to 0. This could be a problem if you refinance for more than $750k and the original loan originated before Dec 15, 2017. In this case, you are allowed to deduct interest on the amount up to the old loan payoff. For example, original loan in 2016 was $900,000 and you refinanced loan with no cashout for $780k in 2020. You want $780k as the amount on 12/31/2020 or date of payoff (which the form states). The $780k becomes your new mortgage interest deduction limit, not $750k. 

[dan971]

Intuit, any update on the bug fix?  I am not comfortable using or paying for this software until the fix is completed. 

[ReneeM7122]

The following are instructions on how to handle multiple 1098 forms.

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:

1. Gather all of your 1098 forms related to your refinance (the form from your original lender and the form from your new lender)
2. Grab a calculator and add together the box 1 amount from each form. Enter the total in TurboTax as Box 1 Mortgage interest.
3. Add the Box 5 amount from each form and enter the total as Box 5 Mortgage insurance premiums. (If you weren’t required to pay mortgage interest, these boxes will be blank on your forms and you won’t enter anything.)
4. Add the property tax paid from each form and enter it in the Property (real estate) taxes box.

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.

@dan971

[dan971]

@ReneeM7122 that is a workaround not a fix. And some posts, such as yours, are suggesting to combine 1098s, while others are suggesting using 0 or 1 for box 2. It doesn’t inspire much confidence. 

[user34892]

Hi Jsanford9027, which alternative did you use? I'm frustrated with TT over this 2 year old bug as well.

[GoneSailin74]

Enjoy, that's the major reason why I think TurboTax needs to get this fixed in the application. It's a complex tax situation based on the crazy tax law they implemented.