Mortgage Interest Limitation Bug? Not limiting my interest.

[Busdriver]

In 2020, I had 2 loans and two 1098s on 2 homes.  One from prior to 2017 and one from 2018.  The average balances add up to more that $750k.  Let's say total interest as an example is $30k. During the interview, TT says "Contrats, you get a tax break.  You're getting a deduction of $23k for the mortgage interest you paid."  This number matches the number calculated in Part 2 of the Deductible Home Mortgage Interest Worksheet.  That is great, and it clearly limited the interest to come up with this answer.  However, when I go to Schedule A, Line 8a, it has put the full $30k deduction there.  When I look at the Mortgage Interest Limted Smart Worksheet, it has the NO box checked for "Does your mortgage interest need to be limited."  Why--it should be yes?  Why does it say one thing in the interview which appears to be right, and then not put the calculated number in Sched A?  This seems to be a bug.

[Busdriver]

I should also note that it is doing the same thing for the points.  It says on the Mortgage Interest Limited Smart Worksheet in part C2 that the limited amount of points to show in SchA, Line 8c is $250, but in Sch A, line 8c, it put the full point deduction of $300.  It seems to be ignoring all of the calculations done in the Deductible Home Mortgage Interest Worksheet.

[Busdriver · Accepted solution]

After working for a few minutes with TT Support, the workaround has been found.  Still not known why TT is checking the NO box for "should my interest be limited" when it absolutely should be.  If yours should be limited after you check your numbers, then go to the Tax and Int Wks in the Forms area.  Scroll down to the Mortgage Interest Limited Smart Worksheet.  Go to the NO Checkbox and right click.  Choose override.  Then check the Yes box.  The proper numbers calculated from the QuickZoom form button just above will now populate properly into this form and on Schedule A.  Such a relief!

[crashley]

I'm having the same problem with TT not limiting my mortgage interest as my combined principle balance is well over $750k. I tried unchecking the "NO" box in the Tax and Interest Worksheet but I can't uncheck it. Right clicking does not seem to work. I'm using the Mac version of TT.

[Busdriver]

I'm not familiar with how Mac might handle overrides/right clicks, and it has been a while since I did this.  I just want to confirm that you are in the Mortgage Interest Limited Smart Worksheet that may be a sub worksheet in that area.

[crashley]

There are no other buttons on that worksheet but if I click the QuickZoom button it takes me to a page called "Schedule A - Deductible Home Mortgage Interest Worksheet" (that is not available in the list to the left) where only one of my mortgages is listed, but I cannot seem to enter the second loan figures manually. I think I'll try just having one mortgage that is the average of both mortgages for the year. 

[TeresaM]

Thank you for sharing this information. Our team is working to resolve an error message for the form availability of the Deductible Mortgage Interest Worksheet after the original date expected. We apologize for the delay and inconvenience this has caused. Our developers are aware of this message and working to resolve the problem. 

• "Deductible Home Mortgage Interest Wks: This form has not been finalized for returns with two or more mortgages and limited mortgage interest. We expect this form to be available after February 17th."

Please do not report both homes on one Form 1098; they should each be reported on their own form.

Please see this TurboTax Help article which has a link to sign up for updates. Notifications Mortgage Interest Worksheet