Mortgage Interest is not deducting properly

[sp1964]

I have $40k interest on a loan (<$1M) taken our before 12/17.  At the end of the questions, it asks if "did any of these situations apply to you in 2019?".  I check no and it calculates my return based on itemized deductions with my mortgage interest deducted.  When I continue, it overrides and give me the standard deduction even though I selected the itemized deduction default box.

I have submitted two questions already.  I have used TurboTax  for 10 years and never had this problem; I believe its a software glitch.  I am ready to file my taxes but I can't.  You cant talk to anyone on the phone, so my issue is not getting resolved.

If I don't get this fixed this week, I'm returning TurboTax and going to H & R Block.

[DianeC958]

The program is giving you a better deduction that reduces the amount of tax you have to pay.

For many people the Standard Deduction is more advantageous than taking Itemized Deductions since the Standard Deduction was increased starting in 2018.

The Standard Deduction for 2019 for someon Single is $12,200, Head of Household $18,350 and Married Filing Joint $24,400.

Link with more information about Standard Deduction vs Itemized Deductions

[Markg1732]

The same issue is happening with me.   I have 40k plus in deductions between property taxes and 30k in mortgage interest.   When I review deductions it has reduced my mortgage interest to around $10k.   My loan was also taken out pre 2017.    

[VictoriaD75]

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.

To modify, there is a workaround for this. 

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.

[Markg1732]

On the online version I see no way to correct this.   There is no question being generated around limitations on interest in federal return.

I am at a standstill and my tax due amount is off a sizeable  because of this.

[kpbhat]

I have the same problem (desktop version).  I had refinanced the loan in 2019 twice from same lender for better rates.  When i enter 2 interest forms separately, it is somehow totaling the loan amount of refinance which fictitiously takes it above $750k and i am put on standard deduction even if i say “No” on the last screen “does any of these situations apply to you”.  i combined interest on both forms and entered it as one form and then it correctly takes the itemized deduction.  Seems like a glitch in the system and there is no way to talk to someone !!  

[KrisD15]

On that last screen, don't say "No", say "Yes" and then enter the total amount of interest you are allowed to claim. 

[kpbhat]

Hi KrisD15,

Thanks.  if I say "Yes", it reverts me back to standard deduction and limits my mortgage interest only to a smaller number (not sure how much as it doesn't show me).  Also the screen shot you have shared below is probably from online.  i have never seen the mortgage adjustment screen on my desktop version.

here is what i did.  i followed another advice on some other post from another expert  and changed the answer from forced "Yes" to "No" on the form view.  That fixed the issue.  But it is a bug which i guess has to be fixed  as laymen we are supposed to only follow the questionnair and get the right forms and deductions taken care by TT :-). 

[DavidD66]

Thanks for sharing your solution.