What is this tax and interest deduction worksheet

The tax and interest deduction worksheet shows the itemized deductions claimed for state and local taxes, including real estate taxes, and mortgage interest. You would only itemize if your total deductions were greater than the standard deduction for your filing status. However, these deductions can still be listed on your return. The worksheet helps calculate the deductions and determine if the standard deduction or itemized create the best tax benefit for you.

Working on my taxes using the Turbo Tax Deluxe edition.  Done with everything and checking errors.  The program prompts me Check This Entry:  Tax and Interest Deduction Worksheet: Limited interest and points must be entered.

 Limit int/points on 1098 then there is a box for me to enter an amount.  It won't allow me to click the continue button until I enter an amount.  Not sure what amount I'm supposed to enter there.  I have multiple 1098 forms.  for my primary residence and for the vacation home.  HELP!

I have the same problem with mkpayne5754 , could anyone help?

Regarding the `Limited amount to report on Sch A, line 8a`, sometimes TurboTax won't auto fill it and fails the final check. I found it should be the same value as `Sum of lines 5a through 5d below` field above if your loan is not over the limits by IRS and the portion not being used towards the property are handled correctly. Otherwise you need to put the value accounting for limitations.

(Disclaimer: I'm not a tax professional. Take my opinion at risk.)

The amount of your mortgage interest and points may be limited if the amount of your outstanding mortgage loans are greater than $750,000 (if the loans were originated in 2018 or 2019) or $1,000,000 if the began before 2018.

This question about Enter your adjusted mortgage interest and points is because from  the information you entered your mortgage interest and points are limited due to being over the limit of $750,000 or the $1,000,000.

If this is the case then you need to 

First,  figure out what your average mortgage balance is. To do this:

• Take the balance of your mortgage at the beginning of the year, and add it to the balance of your mortgage at the end of the year.
• Divide this amount by 2 to get your average mortgage balance for the year.

Next, you need to compare your average mortgage balance with the limits above. If your average mortgage balance is greater than the limits, then do this:

• Divide the limit by your average mortgage balance to get a percentage.
• Multiply the percentage by how much mortgage interest you paid for the year. This will tell you how much total mortgage interest you can deduct.

If your average mortgage balance is less than the limits above, then you can deduct all of the mortgage interest that you paid this year.

Please note: You can only deduct the interest you paid on the amount of the loan used to buy, build, or improve the home the loan is secured by (meaning the property that acts as collateral for the loan).

If your loans are not more than the limits then you need to review the information you put in for your loans.

For box 2 of a refinance loan the amount should be $0 since the box is asking for the outstanding loan balance as of 01/01/2019.

@mkpayne5743

@dy5 

No one has addressed my situation. I get the same error message. 

I have several refis on primary home mortgage and a vacation home purchased in Sep. 2019. But the Turbo Tax (Deluxe) Home Mortgage Interest Worksheet is calculating average balance for each refi as half of outstanding mortgage principal. If I calculate using other IRS methods, I am under the $750K limit. But TurboTax won't let me change the amount. Any help out there? Thanks.

Try the following:

• Click on the View link on the top menu bar 
• Click on Forms 
• Locate and click on 'Tax & Int Wks' on the left-hand side of the screen (under Forms in My Return) 
• On the form, scroll down to the 'Mortgage Interest Limited Smart Worksheet' 
• Click on the 'No' box, to the right of the question 'Does your mortgage interest need to be limited.' 

Need Help!

@Dizavian

Ready to help.  What is your question.  Please be specific.  Are you having an issue with the mortgage interest deduction?  

The tax and interest deduction worksheet is used if you are going to itemized deductions on a Form 1040 Schedule A.  

If it is not applicable to your situation you can delete the form by:

1. Selecting Tax Tools in the left side menu
2. Clicking Tools
3. Under Other helpful links, selecting Delete a Form
4. Scrolling down to the form or worksheet you would like to delete.
5. Selecting Delete
6. Clicking the Continue With My Return button

If your issue is more specific, please provide additional information about your situation so that we can help you.

i have enter everything and its still telling me something is wrong

Please clarify your question.  What type of error message or information on the screen are you seeing that says something is wrong?  Which part of your return are you seeing this message?

@sweettracy

How do I change the date on the Beginning date lived state? My husband moved to another state for a job in August, but intends to come back 1-2 years. I put the date he moved & it keeps giving me an error that results in more than 365 days. It says that I need to review the entry, but I don't know how to get there. I am using the desktop version.

It sounds like you may be entering Sales Tax information.  If so, use these steps to go back to that section of your return to review your entries:

• On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner) 
• This opens a box where you can type in “sales tax” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
• The search results will give you an option to “Jump to sales tax”
• Click on the blue “Jump to sales tax” link 

@mreuskumbug

Hello but what if you don't have a mortgage 

If you don't have a Mortgage, you can skip this section.   If you're going through TurboTax step by step, the program presents all types of Income and Deductions to you.

You can click on Deductions & Credits at the top and select  'I'll choose what I work on'.  Then you'll see a listing of deductions that you can look at individually.

Here's more detailed info on Credits & Deductions to help you. 

i need to update/change the "Does your mortgage interest need to be limited" to No.

but it's not letting update the form. Where can this be changed?

Yes, you cannot change that checkbox in the "Forms Mode."  There is an entry somewhere that is causing the limitation and it is usually related to entering multiple forms 1098.  Try working in the step-by-step mode.  For the best results you'll need to delete all the 1098 entries and start fresh. 

Follow these steps.

Be advised the mortgage worksheets are not part of the forms that are filed with the IRS.   Follow these steps to correct/eliminate the limitation on your mortgage interest deduction:

1. Deductions and Credits
2. I'll choose what I work on
3. Update Mortgage Interest topic
4. Delete both 1098s
5. Done
6. Update the Mortgage interest topic
7. Yes
8. Put in oldest loan first
9. Primary or Secondary Home as needed
10. None of the above
11. Enter form information from old loan
12. Continue
13. No points to deduct
14. Yes Most Recent if this is the only loan on this home; No if you have another 1098 for a loan on the same home
15. Answer the Refi questions as needed
16. Continue
17. Add a lender
18. Same steps as above for the new loan
19. Continue
20. Done
21. If there is a limitation introduced you'll be asked to review the entries to enter any payoff information
22. Now you should see the page explaining the limitation
23. You can click the help me with this link and see that if you take your loan balance at the beginning of the year box 2 old loan and add it to the balance of new loan at end of year (loan amount 1 Jan 2023) and then divide by 2.  If the average is below 750,000 that means all of your interest is deductible. 
24. In the "Your Adjustments" box enter the total interest paid for 2022 from box 1 of your 1098s
25. Continue

If you need you can re-post with specific loan (1098) information.

first thank you!

I did followed your steps, although I intuitively deleted both my 1098's before posting my request for support.

After entering the last 1098 I get this message...
"right now, the standard deduction saves you the most on taxes"

and i checked the "Tax & Int Wks" form yet again and it still has the limited check box checked.

"Does your mortgage interest need to be limited" ...YES

i suspect i may have to delete this version and start from scratch...

just to be clear i did see that question come up the first time and i assumed incorrectly and did not enter anything the that box.

Do you believe you should NOT be claiming the standard deduction? In other words, you believe your allowable mortgage interest will take your deductions over the standard amount. Is that correct? If not, the answer about the mortgage interest limitation is irrelevant if you claim the standard deduction.

@Buceador 

correct i always itemize my deductions each year. I checked my last year's records and that form has "No" checked marked (i.e. not limited). I also started over fresh (deleted my current tax file) and imported my 2021 tax return to start fresh. Entered all my income and jumped to the deductions to enter my interest paid. didn't seem to make a dent in my tax amount owed. Plus the Tax & Int Wks still has that box checked as "Yes".

I'm dumbfounded ...there has to be some "field" causing this.

Please check what is posted to your tax return.  Based on your situation, the standard deduction may have been to your advantage.

1. On the menu bar on the left that shows.
   1. My Info
   2. Federal
   3. State
   4. Review
   5. File
2. Select Tax Tools
3. On the drop-down select Tools
4. On the popup menu
5. Select View Tax Summary
6. On the left sidebar
7. Select Preview my 1040.

The deduction entry is on line 12.

Please compare with the Standard Deduction Rates for 2022.

For single taxpayers and married individuals filing separately, the standard deduction is $12,950 in 2022.

For married couples filing jointly is $25,900, and 

For heads of households, the standard deduction is $19,400.

If you're at least 65 years old or blind, you can claim an additional 2022 standard deduction of $1,400 ($1,750 if using the single or head of household filing status). 

If you're both 65 and blind, the additional deduction amount is doubled.

@Buceador 

The program gives you the standard deduction to start with and that is automatically reflected in the Refund-O-Meter.  If you enter enough expenses to itemize deductions then the Meter is adjusted for the increase in the deductions but you will only see a difference for the amount above the standard deduction.  So if the itemized deduction total is only $500 more than the standard deduction you would not expect much difference to the bottom line ... $500 @ the 10% tax bracket will only yield a $50 change.  

Still confusing?