TurboTax Premier Not Deducting Mortgage Interest on Refinanced Mortgage

[DiddlyD]

I don't understand the combing of cost of points from different loans.  If you paid off the one loan  that should pay off the remaining cost of points and be fully deductible, the new laon should amortize the cost of points not prepaid on the new loan.  I don't beleive you comingle the cost of points from different loans.  

[DiddlyD]

You should be able to add each mortgage lender and interest individually in turbo tax, I have and  each 1098 is also sent to the IRS from each lender too.

[RaifH]

You can enter each Form 1098 separately if you choose. To do this, you have to calculate the outstanding mortgage principal for each loan based on the average monthly statements, so in the case of a refinance with no cash out it is easier to just combine it on one form using the reported mortgage balance. 

You are correct, if you refinance with a different lender, you can deduct the remainder of the points from the old loan. If it is with the same lender, the points are amortized over the life of the new loan. If you have points on your old loan that you have not fully deducted, and you refinance with a different lender, you should report each Form 1098 separately. 

As far as Form 1098 being reported to the IRS, the only number that the IRS gets from your tax return is the deductible mortgage interest. All the calculations done to determine the deductible portion is done on worksheets that are not submitted to the IRS but kept for the taxpayer's records in case it is needed. 

@DiddlyD

[DiddlyD]

Thank you for your feed back, but a refinance is a refinance is a refiance regardless of changing lenders or not.  There is not different rules for different lender types.  I strongly recommend not comingling or lumping figures from one source in with another because if you have to ever have to go back and amend or figure out what went wrong, you have muddled the waters and made things more difficult especially if you can't find documents or it's years later.  Keep things clean and traceable you will know what I mean if you had any accounting background.  1098 is not just sent to the individual it is also sent to IRS by mandate.  Just like your your income is, 1099's  etc.  

[mg811]

I am having this same issue in 2023. TurboTax will not let me claim my home mortgage interest deduction. I went to the worksheet but cannot change it from Yes to No.

It seems like it's been reported to TurboTax for 4 years now and still no fix?

[DiddlyD]

4 Years ago would be when congress and the then president passed legislation that changed the Federal tax laws.  If you itemize now and the standard deduction his higher than schedule C, it takes the standard deduction so your mortgage is not used to figure your tax obligation.  

I don't like it either, because all they did was pump up the standard deduction after they took your personal deductions away so it would interfere with take schedule C and your personal deductions which would have been more than the standard deduction before and you would be paying less taxes for most middle income people that is.  I'm retired and it increased my taxes too.  It benefits the higher income because they of course have very big mortgages to claim, but they don't get the personal exemption but they don't need it and they got the child credits.  They really skewed things up!  The rich got the big bang from all that!

[DiddlyD]

That is exactly why if you entered Mortgage interest from the year end statement you received from your Mortgage co, it will not be included in your return IS IF YOUR STANDARD DEDUCTION IS GREATER THEN YOUR TOTAL ITEMIZED DEDUCTIONS which includes Mortgage interest along with medical etc you report as part of Schedule C " Itemized Deductions".  This does not produce an error or should not, but if you are trying to manually go into the worksheets and enter the mortgage interest, you certainly will because you can't take both standard deductions and itemized deductions.