multiple 1098 mortgage interest due to refinance

[karenkailua]

Thank you so much! Very helpful for my situation and I hope, for others too.

[Brekaluli]

What if you have a 1098 from original loan, another one from the bank who bought your loan, and then a third from a refi?

I’m so confused also about what to put for the loan amount. 

[ToddL99]

If all three 1098s are reporting different mortgage interest payments (not double-reporting), then enter all three in the Mortgage Interest, Refinancing and Insurance interview.

Enter the oldest one first, then the next oldest and then the last one (from the refinance). Answer the questions carefully.

Enter "$1" as the "outstanding mortgage principal" amount (Box 2, Form 1098 Mortgage Interest) for the two older (paid-off) 1098s. This will keep the program from adding or averaging the mortgage balances and thinking you owed more than you did at any one time.

Entering $1 will not have any effect on your tax calculation and will not generate an error in either TurboTax or with the IRS, From an economic perspective, it is accurate - you owed virtually nothing on these mortgages at the end of 2020, since you paid them off with the refinance.

For the last 1098 (the refinance), enter the actual "outstanding mortgage principal" amount in Box 2. This is what you owed at the end of the year and most accurately reflects your average loan balance for the entire year.

See   What do I do if I have multiple 1098s from refinancing my home debt? for additional details on this issue, but following the steps above should avoid any problems with reporting your mortgage interest and principal balances.

[bhatiavn]

Hello,

I refinanced my mortgage in 2020 and I'm also finding it very confusing to handle multiple 1098s in TurboTax due to the refinance as the TurboTax instructions leave out several nuances. I followed the instructions to combine the two 1098s, used the original bank name, but then am stuck at this screen below. My thought was to write in the payoff loan amount and the date my new bank paid off the loan to my old bank, but this doesn't feel right given the labels for these fields make it sound like my mortgage has been paid off (it hasn't - only the original bank was paid off by my new bank who did the refinance). Can you/anybody confirm if I'm doing this correctly or correct me if I'm wrong?

[DaveF1006]

In combining the 1098's, I would report the new loan amount in Box 2 and combine mortgage interest, mortgage insurance premiums, and property taxes. 

[bhatiavn]

I'm not sure if you read my question, but that's not at all what I was asking - what do i fill out in the loan balance and the end date boxes that were pictured in my screenshot?

[AmyC]

Use your balance with the new loan and leave the date blank since you currently have a mortgage.

@bhatiavn

[bhatiavn]

Got it, so fill it out as if this was just one loan and that there was no payoff. Thank you!

[AmyC]

Perfect, you are welcome!

[snjpromos]

Thank you for your response to this question - I have one more question - We refinanced our original mortgage in 2020 with the same lender. So, I have a 1098 from the original loan and a 1098 from the refinanced loan both from the same lender.  I entered by 1098 from the original loan first.  When it asks me "Was this loan paid off or refinanced with a different lender in 2020?" should I answer Yes or No?  In our refinance we did get cash out that was not used for home improvements.  Thank you.

[Turners1229]

I recently received an email from Turbo Tax to possibly amend my 2020 return if I refinanced my mortgage and received multiple 1098s (which I did).  I followed the Turbo Tax Online instructions to amend my return and it is showing I am due a larger refund... however upon further investigation through the TT Community it appears you do not combine them based on certain home debt limits? I cannot find this information anywhere in the article that TT sent out nor am I able to reply to the TT post.  My home debt when I refinanced was $373,639.87 and we are married filing jointly. I am just trying to make sure it is OK to amend this return.  Following TT directions I am trying to amend but not sure if I really should and this could negatively affect me.  I'm striking out on my google searches as well.  Thanks in advance for any help 🙂