Mortgage interest error

[Rechelle2020]

@ReneeM7122 

Thank you for differentiating between Refinance and loans that have been sold to subsequent lenders where the loan is not actually paid off, but simply transferred to another "owner" of the loan. 

However, the advice you gave to combine the amounts from multiple 1098s instead of using the Smart Worksheet for each 1098 in the case of Refinance once or more times in the year seems to be a good way for people to make mistakes and wind up ultimately not matching what was reported to IRS by multiple lenders during the course of the year.

My husband found the step by step advice you posted to combine interest from original and refinanced loan(s) in another thread when we were trying to figure out what to do because I noticed the error (unfortunately trusting the process of TurbTax accurately leading me to "most deductions possible" through the "Guide Me...") AFTER e-filing my Federal Return. The day after filing, I was looking over my Schedule A, and was astonished to find the mortgage entry about $4,000 LESS than what I had calculated! When I looked at the PDF of the worksheets attached to my form 1098, there was NO explanation of why my interest was limited.

Once I started reading the posts of so many frustrated folks who have been dealing with this last year and again this year, I'm just really wondering why TurboTax hasn't come up with a better solution!

In yet another thread, I discovered that I have to return my information to what it was before I discovered and fixed the error because I already e-filed and TT doesn't know how to take the new information and adjust all of the forms. This has been so frustrating! I am now in the process of starting over with a brand new data file, so I can file an amendment directly to IRS instead of through TT, and then file an accurate return with my State.

[Rechelle2020]

@MikeDemler  I just tried creating a brand new data file to recreate the way TurboTax automatically combined my multiple 1098s into a concurrent loan instead of one refinanced to the other so I can e-File an amendment (on another thread I was told I would have a big mess trying to e-File with a return that had been "fixed" prior to hitting the "amend" button within TurboTax once it is available on 2-28). Now the path I took is nonexistent. It appears they have removed the ability to enter multiple 1098s, and instead have a link to the instructions you pasted in one of the earlier posts that tells us to get our calculators out and add the 1098 interest paid in 2020 into one form.

This is so frustrating! Not only because my previous data file has been corrupted by so many changes I can't use it to "Amend" and I can't recreate the mistake in the new data file. On top of that, Turbo Tax is advising us to combine information from multiple 1098s that were reported to the IRS as separate reports of interest received by multiple financial institutions!!! I don't even understand how that is being put forth as any sort of solution when leaves so much room for error. TurboTax can't possibly guarantee calculations are correct if they are having taxpayers do calculations independent of the software. How can they guarantee we all have no mistakes when using a calculator and transferring that information to the questionnaire they are leading us through for something as important as our Home Mortgage Interest???

[enraptored]

@Rechelle2020 @MikeDemler @ReneeM7122  I read through all your posts last night and have only one thought after @Rechelle2020's final post in which she questions TT/Intuit's most recent attempt to "fix" this problem:  I'm glad I forked over the $45 for Audit Defense when I submitted my fed/state returns last Sunday night! I just threw caution to the wind, changed numbers in both fed & state worksheets to reflect the AVERAGE BALANCE of my original loan and the second of two 2020 refinances (ignoring three additional servicing transfers!) -- and called it good. Both files were accepted within a matter of hours, but I have no doubt the IRS and FTB will be looking at them with a great deal of skepticism. As they should. But I'll let Audit Defense work for their money to figure this mess out! I'm glad I'm finally in a very low-rate loan now because I am NEVER refinancing again -- what a nightmare. Good luck to us all! 🙄