Turbotax 2024 does not include mortgage points as deductible interest

[Skchu40]

We bought a house in 2024 with mortgage amount more than $750,000.  Mortgage company sold the mortgage to another company shortly after.  I have 1098 from both companies.  The mortgage points was paid to the first company.  No points were paid to the second company.  Turbotax calculated the allowable interest deduction proportion properly only based on the total interests paid to both companies but not included the points.  Schedule A shows only the calculated deductible interest without including the points.  I tried the method posted here for 2023 by indicating both companies as the most recent 1098 and it still does not work.  Please help.

Thanks

[BrittanyS]

You will follow these steps in TurboTax to add mortgage points:

1. Sign in to TurboTax
2. Click the arrow next to Deductions and Credits
3. Click Start next to Mortgage Interest and Refinancing
4. Answer interview questions
5. Choose I paid points when I refinanced
6. Enter points paid

If the cost of the home exceed $750,000 the amount of points that can be used are limited.  If you are not able to deduct your points in the year you buy, then the points will be deductible over the life of the loan.  

For more information, see the link below:

• How to Deduct Mortgage Points on your Return

[Skchu40]

That is not my question.  I know how to enter interest and points and I know the limitation for the $750,000.  While interest and points were both entered and shown on the Home Int Wkst, Turbotax does not include the points amount in Schedule A.  Only the interests from both mortgage companies were included in Schedule A. The points was from the 1st company and entered accordingly.  No points from the 2nd company.  The 1st company sold the mortgage to the 2nd company so I have two 1098 forms.  All data was entered correctly but points did not show up on schedule A.  I have also tried to designate both companies as the "most recent 1098" as previously posted answer by Patricia and that did not work either.  Doing that actually wiped out the entire interest deduction from Schedule A and pushed me back to standard deduction.  Doing the correct way by designate only the 2nd company as the "most recent 1098" caused the points from the 1st company not included in Schedule A.  That is my question.  I am stuck in this problem and cannot move forward.  Thanks

[KrisD15]

There is a screen for the first loan where, if you want to claim the full amount of points paid, you need to select BOTH

"This is a new loan on which I paid points"

AND 

"I bought or improved my main home with this loan in 2024"

Please return to that interview and see if both those responses were selected. 

[Skchu40]

Both options were selected for both 1098.

[Skchu40]

Can anyone provide assistance to this problem?

[AmyC]

I can tell you that Sch A goes to the IRS with the totals only. All the entries are to get the worksheets to calculate the correct amounts for the sch A.

If you want to just enter the amounts that are correct, you don't have to enter both forms. Just one complete set of correct numbers that you can back up. The IRS just looks at your sch A total and compares it to the forms they were sent.

Reference: About Schedule A (Form 1040), Itemized Deductions

[Skchu40]

Turbotax does not include the mortgage points in schedule A in this case.  It only includes the total interests as the deduction amount.  So you are suggesting that I use manual override to solve this problem.  I try not to use Turbotax override but this seems to be a bug that Turbotax should fix.  Thanks.

[KrisD15]

Please return to the entry screen and only make that (double) selection ("new loan with points" and "bought or improved home in 2024") for the first (oldest) 1098, not both.

Only enter points paid on the oldest 1098.

I entered the first 1098 and indicated that it was secured by home 

I selected BOTH "new loan with points" and "bought or improved home in 2024"

I entered points

and I selected YES "This loan was paid off or refinanced with a different lender in 2024". 

(when I indicated NO to "paid off or refinanced", the program added the mortgage balances)

No, not most recent 1098

"HELOC or refinance?" NO

Yes, only used on this home

The points and interest were added and reported on Schedule A

I entered the second 1098 

Yes, secured by home

I indicated ONLY that I bought or improved the home with this loan, but I DO NOT indicate that it was a NEW loan, do not enter points a second time

Yes, most recent 1098

Neither HELOC nor refinance 

Yes, only used on this home

DONE

I used 740,000 and 735,000 as the balances on the two 1098 forms and the interest was not limited. (the program did not add them together)

All interest and points were reported as deductions on Schedule A

I did get a "Let's Check These Entries" when I ran "Smart Check" where I had to indicate if either loan was a refinance. 

I selected "Refinance NO"

The full deduction remained on Schedule A.

Rules changed regarding the Home Mortgage Interest deduction several years ago, however Form 1098 was not updated to reflect all the information needed to make a proper calculation. 

I am not sure if the "Smart Check" question about the loan(s) being a refinance is by design, but I could not eliminate that Smart Check question from being asked when I entered two different 1098 Forms. 

IRS Pub 936

[Skchu40]

Thanks for the detail explanation.  I followed the steps exactly like you suggested but it did not change anything. The points only shows in the "Home Int Wkst" for the 1st 1098 like before but still not added to Schedule A.  My case is that the loan amount is slightly over $1M.  Turbotax did calculate the allowable portion of the interest deduction based on the $750,000 rule but it does not include the points.  Perhaps you can try with the loan amount over $1M and the problem will be there.  Thanks

[Skchu40]

Any other suggestions to solve this problem?  Or, is there a fix for this problem?  Thanks

[Skchu40]

I'm still waiting for answers to how to handle this problem.  Or, is this a bug that Turbotax can fix?  Thanks

[BrittanyS]

I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the directions below:

TurboTax Online:

1. Sign into your online account.
2. Locate the Tax Tools on the left-hand side of the screen.
3. A drop-down will appear. Select Tools
4. On the pop-up screen, click on “Share my file with agent.”
5. This will generate a message that a diagnostic file gets sanitized and transmitted to us.
6. Please provide the Token Number that was generated in the response.

TurboTax Desktop/Download Versions:

1. Open your return.
2. Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent” *
3. This will generate a message that a diagnostic copy will be created.  Click on OK and the tax file will be sanitized and transmitted to us.
4. Please provide the Token Number (including the dash) that was generated in the response.

*(If using a MAC, go to the menu at the top of the screen, select Help, then, “Send Tax File to Agent”)

@Skchu40