Turbo Tax is asking me "What was the balance of your loan on December 31, 2023?" Why is this, because the outstanding mortgage principal from the 1098 was already input.

[Cameron H]

This is when I am entering details for a HELOC on the "Let's check if your home loan interest is deductible" page. The instructions state that Turbo Tax will only ask me this question if the "outstanding mortgage principal" is not input, which I already did when I was entering details from the 1098. Some background: this HELOC was originated in 2022, and a portion of the loan proceeds was used for some eligible home improvements in 2023. I did not include the 1098 in my 2022 taxes since none of the proceeds had been used yet for any home improvements. 

























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[AmyC]

You clearly understand the law. The program only knows to ask questions and add balances based on the answers. As long as the full amount qualifies, you can enter any amount for the balance that keeps you within the limits, even $1 is fine. All of this information goes to a worksheet which does not transmit to the  IRS. Only the tax forms are submitted. See Pub 936 for limitations. The important thing is for your sch A mortgage interest to be the correct deduction that you can back up.  To see your Sch A:

1. On the left side, click on Tax Tools
2. Click Print center
3. Click Print, save or preview this year's return
4. If you have not paid, click pay now.