I refinanced and have two 1098 forms

[ReneeM7122]

Here are instructions to enter multiple 1098 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.

@user34892

[mhaanraadts]

I don't understand why people (are they Turbotax support folks?) keep on saying to combine forms. This is a recipe for disaster. Not only if you get audited you have some explaining to do, but I'm sure that if points are involved the carry-over to 2021 are going to be messy.

Why not simply provide the appropriate instructions to manually make a few edits to your return using 'Forms' mode? This has been explained here a few times.

[ReneeM7122]

Forms mode is available; however, for individual customers, it is not recommended because it can cancel the TurboTax 100% accuracy guarantee.  

Here is information about Forms mode.

Regarding the instructions to combine forms, it will not change the bottom line and will not cause a discrepancy in tax owed.  Since you use the original lender as the name in the 1098, it carries the original amount of the loan. Since TurboTax customers are covered by the accuracy guarantee, any audit questions involving the combining of 1098 forms will not be a problem.

 Interest from the original loan remains deductible so there won't be a carryover issue.

@mhaanraadts

[davelikedrum]

So following the instructions to combine the two amounts on the first 1098 from the original loan all makes sense. 

However, do I still enter the second 1098 from the refinanced loan? If so, do I change box 1 on this loan information as well? I'm unclear how to handle the second 1098 from.

[ReneeM7122]

Yes, you still enter the second 1098 from the refinanced loan.   You will add the box 1's from all your 1098's and put that amount in TurboTax.  Double check that you've completed all of these steps for your refinance:

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.

@davelikedrum

[mihhwang]

By Entering the second 1098, it creates the illusion that I have two mortgages for my state return. While this works for the federal tax return, it screws up by state return. Any thoughts of what we can try?

Should I just combine all the 1098 into 1 and submit it that way?

[sorryanni]

I have the same case, follow @Kkulkev21 instruction, it works, I would recommend everybody who received 3 1098 forms to have a try! In this way, you have all the information for 1098, and correct results; the only thing I would like to say, Turbo tax is not doing well regarding this issue, this has been discussed a couple of years ago, but it is still not solved; the only reason is they don't want to spend time on this particular issue since only families who refinanced have this issue; Thanks to @Kkulkev21 

[bluezapfel]

I'm so angry! I just found this thread.

I've already filed my taxes for 2020 a week ago and they've been excepted. Now I found this! I redid my 1098's and now they owe me more money for state and federal.

I had 3 1098s, did a refi and paid points, those lenders immediately sold my loan to a 3rd lender. So, I had original lender 1098, refi lender I paid pints with and current lender with 1098 interest, property taxes, etc,

I've used TurboTax for 20 years, I wonder how many other times, I got screwed without knowing. Why wasn't this found in the review it does before you file? This is unacceptable. Costing taxpayers hundreds if not thousands of dollars, this mistake is currently costing me a little over 1k between state and federal returns.

I've never had to file an amendment before, are there directions somewhere for how to do this with Turbotax? Do I need to wait until I get the money from the first return before I file an amendment? What a freaking nightmare. not happy....

Chris

[JohnB5677]

Yes we can help you to amend your return. 

• If it is Accepted you will have to wait and file an amended tax return:
  • If you're getting a refund wait until the refund comes in.
  • If you owe money wait at least two weeks before filing the amended return.  (This is so that the IRS has time to process the original return.)

To amend a return 

Some quick ground rules:

1. Be sure the original return was filed and accepted.
2. DO NOT go back into the return or change anything before you start the amendment process.
3. Gather everything you need before you start.
4. Complete the entire amendment process before you log out.
5. Starting with 2020 tax returns you can E-File a 1040-X amended tax return.  All prior years must be printed and mailed.

 You can correct a return that you've already filed and had accepted.  Select the year that applies and use this guide to proceed.

Select your tax year for amending instructions: 2020

For additional information please refer to  How to Amend

​​​​​​​The 1040X (Amended Return) tax form is scheduled to be available 03/25/2021

@bluezapfel

[mhaanraadts]

I tried both methods with a refi between $400-700k in NY: the 'add everything' or 'manually use forms' mode. Both give the same results.

However, the 'add everything' instructions are unclear. They recommend to use the original lender, so that means you need to provide the old bank and the original close date? Doesn't make sense.

I read above that TurboTax doesn't "support" manual edits, but they need to make an exception here. I am simply not comfortable by providing incorrect tax data to the IRS by simply adding numbers.

[bps65]

So just to clarify, if we have two 1098s, one for the original loan (since refinanced) and one for the refinanced loan, we follow the steps here (https://ttlc.intuit.com/community/loans/help/what-do-i-do-if-i-have-multiple-1098s-from-refinancing-...) twice?  In other words, we enter the first 1098 and follow these steps, and then we enter the second 1098 and follow these same steps?  Or do we only enter the original 1098 following these steps and just ignore (not enter) the refinanced 1098?  Thank you. 

[doT]

Honestly at this point this should become a class action lawsuit.  The facts are that TurboTax knows there is an issue but I have yet to see any public announcement that this is an issue or that steps are being taken to solve this issue.   This leaves thousands of people vulnerable to either paying more in taxes than they should, filing incorrectly by trying to circumvent the junk software, or worse....getting audited because in trying to get the correct value in the software they inadvertently make some other mistake that makes them liable for incorrect filing.  

[DaveF1006]

No you will enter both 1098's. You would enter the 1098 from the original loan first and then enter the 1098 for the refinanced loan.  Just be sure for the refinanced 1098, you put the number 0 in Box 2 or else the mortgages will be combined and exceed the mortgage balance limitation rule. 

[bps65]

Okay, so I enter both, and do I follow these same instructions for both?  https://ttlc.intuit.com/community/loans/help/what-do-i-do-if-i-have-multiple-1098s-from-refinancing-...

So I first enter the 1098 for the original loan.  I put the combined totals (from both 1098s) into Box 1, Box 5, and Real Estate Taxes.   Then I complete boxes 2, 3, 7, and 11 using the 1098 for the original loan.

Then I enter the 1098 for the refinance loan.  Again I put the combined totals (from both 1098s) into Box 1, Box 5, and Real Estate Taxes.   Then I complete boxes 2, 3, 7, and 11 using the1098 for the refinanced loan, but instead of using the actual number for box 2, I use 0 instead?

Is that right?

[WendyN2]

No, for most accurate tax calculations, you should enter each separate 1098 as it's own separate entry. Therefore, once you are done entering one, then select "Add A Lender" when you complete the full entries for this first 1098 and are at the "Home Loan Deduction Summary" page. Even if the Lender is the same, if the loan is a separate loan (different account number), then they should be entered separately. As far as the Real Estate Taxes Paid, this typically only falls onto one or two (two, if you refinanced) 1098 Forms. Therefore, you would enter the total amounts shown on each separate 1098 Form just like the mortgage interest paid information.