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Level 2

Home mortgage interest deduction in California this year

I live in California, just finished the Federal tax part and the system recommends me to use standard deduction.

 

When working on California state tax, I got a question about the part of "How California Handles Mortgage and Home Equity Interest" in TurboTax.

 

I bought a new home in 2016, my home loan is about $200,000 and the mortgage interest I paid in 2018 is about $6,000.

Can I put $6,000 as a deduction for California state tax filing(the section of "How California Handles Mortgage and Home Equity Interest" in TurboTax)?

 

Thank you.

1 Best answer

Accepted Solutions
Employee Tax Expert

Home mortgage interest deduction in California this year

Don't enter your home mortgage interest in that section of the CA return. That's only for if you had some of your mortgage interest limited on your federal return because of the new law. You'll still get to deduct your interest on your CA return. If you enter the information on your home mortgage in the federal section of TurboTax, it will transfer over to your state, even if you were limited to the Standard Deduction on the Federal return. It's just not part of that screen for Additional Mortgage Interest.

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4 Replies
Employee Tax Expert

Home mortgage interest deduction in California this year

Don't enter your home mortgage interest in that section of the CA return. That's only for if you had some of your mortgage interest limited on your federal return because of the new law. You'll still get to deduct your interest on your CA return. If you enter the information on your home mortgage in the federal section of TurboTax, it will transfer over to your state, even if you were limited to the Standard Deduction on the Federal return. It's just not part of that screen for Additional Mortgage Interest.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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Level 2

Home mortgage interest deduction in California this year

Hi Isabella, 

I am facing the situation which you have mentioned wherein I had federal return limited on 750k as my average California home mortgage being 802,266.15=x , and henceforth turbotax adjusts my total mortgage interest from 23892.51 to 22335.96 ( which is (750k/x)  * 23892.51)). However in the "Here's the income that California handles differently" section of turbotax, my mortgage interest adjustment automatically shows as -7128 after it asks me to put fair market value of the home ( which I put as 980k). I am not getting how the adjustment is a negative number ( -7128$) . I thought it should be a positive number amount for mortgage over 750k but less than 1million ( (1-750k/x)* 23892.51 = 1556.55$) , right?

Thanks.

New Member

Home mortgage interest deduction in California this year

So my second home mortgage loan interest is deductible on the federal on which line?

 

Level 3

Home mortgage interest deduction in California this year

I installed Turbotax 2019 Deluxe this past weekend and somehow in the process my 2018 Home and Business version was updated!  Not sure what, if anything, I did or if as a matter of practice Turbotax upgrades the previous year.  Again, I don't recall how it happened but I ended up opening 2018 after the upgrade and while my Federal result was the same, my CA refund amount had increased!  Without changing anything...  Yes, a bigger refund!  So, I pulled up the previous PDF of the entire return and the new PDF of my entire return after the upgrade and compared line by line until I figured out why the refund had increased.  Seems when I filled my 2018 taxes the version of Turbotax that I was using failed to put my mortgage interest into the CA deduction field on line 8a of the California Adjustments CA(540) form.  Schedule A is also not filled in correctly despite the interview field having the right value.  Could I have inadvertently overridden entering the mortgage interest deduction?  Can't image why I could/would do that.   Fortunately I used the Standard Deduction as it didn't make a difference for Federal, but looks like I get to amend my 2018 and get more refund.  Why doesn't Turbotax send email when updates are made after filing?  I can't seem to find one anyway.  Spam? Certainly the IRS fixes issues and software defects are corrected.  Never, ever thought to go back and run the software again the next year.   

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