New home this year. Our loan is from friends, so we did not get a 1098 form. The only choice is seller-financed loan or to fill out the 1098. What do I do?

[alyssawilson1]

It’s not Technically seller financed, but that fits the best. I don’t want to do the wrong thing

[Vanessa A]

You can choose seller finance, this just means you do not have a 1098.  

[rjs]

Is the loan from your friends secured by your home? If not, you cannot deduct the interest. See the definition of Secured Debt in IRS Publication 936.

Mortgage interest that was not reported on Form 1098 has to be entered on Schedule A line 8b. If it's not a seller-financed loan, there is no way to make the entry in TurboTax Online. The entry can only be made in forms mode. Forms mode is only available in the CD/Download TurboTax software, not in TurboTax Online.

In forms mode, enter the interest directly on Schedule A line 8b. Do not use the Home Mortgage Interest Worksheet. If you enter it this way, TurboTax will not calculate any limits that might apply to the deduction. See "Part II. Limits on Home Mortgage Interest Deduction" beginning on page 9 of IRS Publication 936 to see if any limits apply to your deduction.

Note that mortgage interest is an itemized deduction. It will not make any difference in your tax or your refund unless your total itemized deductions are more than your standard deduction.