Mortgage Refinance Interest Calculation Issue

[_Chris]

I have one home which is my primary residence. In 2020 I refinanced the loan through a mortgage broker who sold it to another bank. I had three 1098's from original lender, the broker, and the final loan servicer. I have not used any part of this loan for anything else (no equity line of credit etc). I am married filing jointly.  In the Deductible Home Mortgage Interest Worksheet, Part 1 Line 7 "The average balance of debt acquired after December 15, 2017" value is about twice my mortgage value. Also, the mortgage is significantly less than the $750,000 line 8 limit. The total mortgage interest form the three 1098's plus the 10K in property taxes is greater than the standard deduction. However, Turbotax has chosen the standard deduction over itemized. Is there a glitch and will Intuit fix it soon? Any workaround?

[KrisD15]

The issue is the program trying to compute the average mortgage to calculate the amount of allowable interest you can claim.

When the program asks if the interest should be limited, you can select "Yes" and on the next screen enter the full amount of interest you are allowed. 

If the balance was never over the limit and you didn't take cash out, you can enter the three 1098 forms on one screen. Add the interest together, use the beginning balance from the oldest 1098 and the ending balance from the most recent. 

[_Chris]

Could you clarify your last paragraph. You say "..enter the three 1098 forms on one screen" then you say "Add the interest together...". So are the 1098 forms still entered separately or just one entry? Can you clarify how the page titled "We need a bit more information to wrap up this deduction" (see uploaded screenshot) should be filled out since I have three fields for each of the three 1098 forms.

[_Chris · Accepted solution]

Here is a screenshot that may help others. I refinanced a home loan and had three 1098's - the original loan 1098, broker 1098 and new loan servicer 1098.

[Cmschleich]

Your question is the closest thing on the web I’ve found so far. It decided to drop $7k of interest and I don’t understand why. It didn’t happen until I entered a third 1098, which was 1 month of interest paid through the broker as part of closing before the lender took over the next day.

[85tiger]

I have the exact same issue and was told by the tax expert that the Turbo Tax is not calculating this correctly but I have not idea how to get to a point where it can be corrected.   The redacted forms shown above are of no value since they only show what I can already see with no indication of where you can go to enter the correct information - or correct the information that the system is calculating.  Is there an internal form somewhere that will allow the correct information to be put in - e.g. to show a zero year-end balance of the old mortgages that I refinanced instead of simply adding them all up and going over the limit?

Thanks for any assistance you can provide.

[NCperson]

see if my example on this post helps at all

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-turbotax-not-calculation-my-i...

[Cmschleich]

Thank you @NCperson, this link ultimately led to the answer!!!

Turbo Tax also has an answer but I didn't know what I had to search for originally. Now I know, combining 1098s from a refi.

https://ttlc.intuit.com/community/loans/help/what-do-i-do-if-i-have-multiple-1098s-from-refinancing-...