Where do I enter home equity line of credit interest?

[FrankF1 · Accepted solution]

Yes, you can record your HELOC interest using TurboTax Deluxe Online edition.

To record your interest, login and press the "Take me to my return" button

1. Select the TurboTax "Search" button located near the top right of your screen
2. Type "1098" into the search box
3. Select "Jump to 1098" from the results list
4. Answer the questions on the following screens to record your home equity line of credit

More information and a short video about the home mortgage interest deduction is at https://ttlc.intuit.com/questions/1899697

[Carl]

Same place you enter the 1098 for your residence, under the Deductions & Credits tab in the "Your Home" section. But be aware that home equity (HELOC) interest is only deductible if the money was used to buy or improve the property that is secured by the loan. (Yes, the loan must be secured too.)

[Kermon]

That seems to work for a home loan, but does it work for a HELOC? I did not receive a 1098 because my interest payments were below the threshold required for a 1098. At the "Home loan deduction summary", after clicking "Add a Lender" and entering the bank's name, there seems to be no option in TurboTax for a bank-financed loan without a 1098. My starting balance at the beginning of the year was $0. My ending balance was $0. (I paid off the full amount during the year.) The HELOC is still open. Yet when I enter $0 for the outstanding mortgage principal, TurboTax states "Outstanding mortgage principal must have a value." Am I missing something? Or in the wrong area for a HELOC?

[DaveF1006]

If you have an original 1098 with the original mortgage information, combine your Heloc information in the original 1098. Add the interest paid on the Heloc to the amount in Box 1, if you used to entire funds of the loan to buy or improve your home.  

[JB215]

I did receive a 1098 for my HELOC, but the outstanding principal amount says zero, which TT won't accept.  In addition this interest is NOT deductible as it was not used for my home.  Do I need to file it at all or can I ignore this 1098?  If I need to file it, how do I enter it?  TT won't accept it with a $0 in box 2.

[JulieS]

No, you don't have to report it if it doesn't benefit you. Note, that is only because it is a deduction and not an income item. 

[Kurtis86305]

I have HELOC interest of $175.25 for 2022 but I did not receive a 1098 because it is below the $600 threshold.  I am trying to figure out where to add the HELOC interest in TurboTax.  After researching this issue on your site, your tax expert's solution is to add the HELOC interest to the mortgage interest noted in box 1 of the mortgage 1098.  My question is this - if I add the HELOC interest to the mortgage interest, won't that get flagged by the IRS as it would not match the original mortgage interest number?  

[DaveF1006]

No, you shouldn't get flagged by the IRS but if you do, you can explain that you were advised to do this by a Turbo Tax Expert.  If it is written advice in a post, keep a transcript of the post. 

@Kurtis86305 

[kk3366CL]

I have a similar issue with entering HELOC info but a little different from your question.  For whatever reason, I did actually get a 1098 for my HELOC interest even though the amount paid in 2022 was only $90.  My question has to do with the loan origination date field.  My home mortgage and HELOC are through the same lender. But the origination dates are very different (since I just secured the HELOC in 2022).  I combined the interest of both 1098s in the mortgage interest box but only included the earlier loan origination date.  Couldn't see any way to differentiate between the two.

[MarilynG1]

You can enter both 1098's separately, with their individual loan origination dates.  However, in your case for last year, the way you reported is fine. 

The main issue with HELOC's is whether the funds were used to 'buy, build or substantially improve' your home.  Often, only part of the funds received qualifies for the interest deduction.

Click this link for more info on Entering HELOC 1098's that may help you going forward. 

[kk3366CL]

I'm confused by the question asking if the 1098 I'm working on now is the most recent for my loan.  At first I thought I had to check "no" because I have two 1098's, and the 1098 pertaining to the HELOC was established in 2022.  But I now feel I should check "yes," the 1098 from 2013 is the most recent because it seems like the question is about refinancing.   2013 was the last time I refinanced to a lower interest rate. When I established a HELOC, nothing changed with my main mortgage -same interest rate, same maturity date.  The Home Mortgage Limitation Smart Worksheet then further confuses me with questions like "loan refinanced in 2022 with a new 1098, was this loan the result of refinancing a previous loan, was cash taken out as part of this refinance, etc."    I did not refinance my home in 2022.   This implies I did.

[DMarkM1]

Yes answer "Yes" to the question on the original loan asking if this is the most recent.  You would also answer "Yes" to that question for the most recent loan.  They are two separate loans.  

The most recent loan you will select "HELOC" for the type of loan when asked and then you will be asked how you used the loan proceeds.  If you answer "no, not all of the proceeds were used on the home secured by the loan," then you will be asked details about the portions used on the home secured by the loan and payoff or loan balance info.

[kk3366CL]

Thanks.  I ended up just adding a vendor and doing separate entries for the mortgage interest and the HELOC interest, even though they're through the same vendor.  It seems to have come out okay...I hope.