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Some TurboTax customers were experiencing an issue with their Home Mortgage Average Balance. This can cause the Home Mortgage Interest to be incorrectly limited.
If you've refinanced or had your mortgage lender changed, the outstanding mortgage principal listed in the combined total of them on Line 2 of the 1098 will be too large.
When you put an outstanding balance in both forms, then the program adds them together and if that number is greater than $750k, then it puts you in the category to "limit interest".
To get that to go away, you need to go back to the deductions section and click on "edit" mortgage interest statement. Enter both 1098's.
Change the line 2 of the mortgage that you no longer owe on (like the one that you refinanced and paid off) to a 0 (zero) because you have refinanced out of that loan and no longer have an "outstanding mortgage principal".
Thanks, but there is nothing on line 2 of the 1098 and I only have one 1098. I should have said this is a home equity line of credit, used for home repairs. There is no original mortgage, just this heloc. The 1098 shows the interest I paid on the loan in 2020 but that's all it shows. It does not show outstanding mortgage principle.
I did try to go back into deductions and edit the mortgage interest there, but in there it does not let me input anything to fix that one line that Turbotax tells me is missing. (Home mortgage interest limitation worksheet, line F4, amount borrowed in 2020)
The only thing turbotax filled in on that form was checkboxes on lines A B and E, and under F lines 1 and 9.
I also went to forms, found that form, the F4 line is highlighted in pink but I cannot type into that box.
If I go to that form from the Turbotax error checking, it shows the box highlighted in blue but I can't type there either.
If I try to ignore it altogether, when I go to print the return it tells me I need to correct that error.
There is a known problem with Home Mortgage Deduction. TurboTax is working to fix the problem and the many other issues. There are many changes due to the CARES Act that require software upgrades. We have not been given an expected date for the fix yet. Please check back often to see if you can file your return.
The interest for a home equity loan or HELOC (home equity line of credit) is an allowable deduction if you itemize. You'll need to meet some conditions:
In most cases, you can deduct your interest. How much you can deduct depends on the date of the loan, the amount of the loan, and how you use the loan proceeds.
The IRS has more information on how much you can deduct and other relevant details.
I have this same problem. I'm unable to complete my tax return because of it. What is the ETA on getting this fixed?
I also have this issue. I'm probably going to file as is leaving it blank, I'm ready to get my refund.
I ran into this also, but I was able to get through it by right-clicking on the field in Forms view, and select 'override'. Then I was able to enter a value, and continue to e-file. Hope this helps!
If you have multiple 1098s I suggest you enter each one separately.
If a Mortgage is paid off, or re-financed you should:
This will properly record every 1098, and avoid any issue with mortgage limitations.
When you have more than one Form 1098 with the refinance info and both show the same balance of the mortgage, TurboTax adds the amounts together. And that may lead to a limitation of the deduction, because the balance is then overstated. To avoid this, make sure that you're not reporting the same mortgage balance twice.
If your combined home debt is under $750,000 ($750,000 for married filing jointly and $375,000 for married filing separately), there's nothing new for you to do in 2020. Enter each 1098 as you normally would.
yes, i went ahead and left it blank and filed. For my situation which was just one 1099 showing intrest paid on a home equity line of credit, and the loan not closed out in 2020, I doubt it will raise any flags.
I have nearly the same problem with this worksheet. TurboTax keeps returning an error about my not having filled line 4 "Borrowed in 2020," but won't let me fill it in!!
After I select "Override," it STILL won't let me enter anything.
I stand corrected. I now understand that this had to be done in the "Forms" view, not the "Step-by-Step" view. Thanks very much for the tip.
Thanks Skylinecomp, your suggestion to right-click on the field in Forms view was the solution for me!
It appears your override solution does not work on the Mac version. I cannot get a menu with the override option when I right click or control click.
This may be a work around if you have multiple 1098s. I suggest you enter each one separately.
If a Mortgage is paid off, or re-financed you should:
This will properly record every 1098, and avoid any issue with mortgage limitations.
When you have more than one Form 1098 with the refinance info and both show the same balance of the mortgage, TurboTax adds the amounts together. And that may lead to a limitation of the deduction, because the balance is then overstated. To avoid this, make sure that you're not reporting the same mortgage balance twice.
If your combined home debt is under $750,000 ($750,000 for married filing jointly and $375,000 for married filing separately), there's nothing new for you to do in 2020. Enter each 1098 as you normally would.
@quabri03
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