In may of 2020 I did a cash out refinancing (refi) on my current loan (dated 2012), and I'm using the money to make improvements to the house (enclosed porch, new fence, new flooring, and possible a deck). I received two 1098's this year. My lender is the same for each 1098 (I refinanced with Wells Fargo, who had the loan also before the refi). I also paid for discount points, 1%. That was not included in the loan but paid for separately. I want to itemize, and I have two different mortgage interest amounts on each 1098. The first 1098 didn't have discount points, new loan does. Anyway, when going through the software and following the prompts I do not completely understand how to figure all interest, or the points. I'm not sure which blocks to click on for refinancing of loan, and also the 'help' that you can click on keeps mentioning $375,000 as an indicator of if you even need to do math and add the interests together, or create two separate lines in deductions. It's very confusing. I need help. For starters, my loan is well below $375,000 even after the cash out refi... so I get two different tax liabilities when I follow the rules. I can add them together on one line of deductions and have to pay more than if I do two lines of deductions. I simply just don't understand the rules on this. I'm about to toss my turbotax out and actually go to a tax preparer and I don't really want to do that. Help please.
