Entering ending mortgage balance wipes out my refund, why?

[cork2win]

I had most of my taxes filled out but was waiting on Mortgage 1098.  TT was showing an $800 refund until I entered my mortgage interest and tax information, specifically the Outstanding Mortgage Principal.  As soon as I enter this number, my $800 refund gets wiped out and shows me owing $70 instead.

I'm married filing separately and the principal balance on the house is 267K so that's far below the 1 million dollar value I have read about where interest may no longer be deductible.  I've looked all over the internet about why this may have happened or rules or laws about this and the only thing I can find is that you can't deduct mortgage interest if the value of your house is too high, but that's not the case here. 

Anyone have any ideas why this may have happened?

[cork2win]

No sooner did I post this question did I figure out what was wrong.  I was entering the information from box 2 on the 1098 in the wrong place on TT.  Box 2 goes where it asks for Box 2, the other area is asking what the balance of the loan was at the BEGINNING of 2018.  Basically you need to show how much the loan was paid down during the year.  Once I entered the correct info in the correct places, my refund was back.  User error!

[Rainman12]

Thanks for sharing the solution! ...

[lingo]

I'm having the same issue but can't seem to find the other area where I need to enter the loan balance at the beginning of the year.  How do I get to that?

Thanks!

[VictoriaD75]

In the Federal menu on the left, choose Deductions & Credits. Follow these steps:

• Under Your Home, choose Start/Revisit next to Mortgage Interest and Refinancing (Form 1098)
• Click Edit next the 1098 statement you would like to revise
• Continue through the screens until you get to Let's get the details from your 1098
• In box 2, update the Outstanding mortgage principal as of 1/1/2019

[docleisure]

I am still having an issue, my return goes to zero no matter what number I put in Box 2

[ReneeM7122]

If you are married filing separately and your spouse is taking the standard deduction, you will not be able to itemize.  This could cause the program to behave in this way.  

@docleisure

[docleisure]

I am not married.  I do not files my taxes with anyone else.  I live alone with no dependents.  I have used Turbo tax for many years now.  Nothing has changed in my life in quite sometime.   Why are things different this year?    When turbo tax runs my Federal Review, my 2019 Federal Deductions show my Mortgage Interest, but my 2020 Federal Deductions, does not show the Mortgage Interest.  This only shows up like this when I enter the Outstanding Mortgage principal.

[Sleeven555]

Hi, so to clarify.
For outstanding mortgage principal, do I put what is on my 1098 or what the balance of my mortgage was on January 1, 2022 for the 2021 tax year?

-Steven

[MarilynG1]

You will need to find the mortgage ending balance either on your mortgage statements or by contacting your mortgage company (December 31, 2021).  

The box 2 amount of outstanding mortgage principal from your 1098 is the mortgage balance from the beginning of the year (January 1, 2021).

Click this link for more info on Difference Between the Outstanding Mortgage Principal and Ending Mortgage Balance.