I refinanced my mortgage in May 2020, with a different lender for the new loan. I have two 1098s, one for old lender, one for new. I entered both, with the outstanding principal and interest reported on the 1098s. Then a clarifying tab on outstanding balances, with a field for balance and date paid off if paid off for each lender. For the old lender, since the loan was fully paid off, do I enter $0 for the balance? Its the only was the math works, but I want to make sure I'm not missing something. Entering the 1098 balance doubles the outstanding mortgage and reduces the deduction.
Check out this article, it might relate to your situation: https://ttlc.intuit.com/community/entering-importing/help/how-do-i-handle-multiple-1098-mortgage-for...
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I refinance my home with the same company and they sent two 1098's for 2020 I dont know how to report them. It keeps thinking I sold it , ask for capital gains. I just refinanced. help
Your issue seems different from mine. You could try entering as if you have only one 1098, which seems to be the primary workaround for multiple 1098 issues. Use mortgage balance at beginning of year (old loan). Then add interest paid from both 1098s for Box 1 input. Same for any other amounts eg property insurance etc.
There are other posts that give such workaround instructions in more detail. It seems to be a known bug in this product that appears to have existed before this year. I expect better than workarounds.
I am having a similar issue. We sold our primary residence and bought a new primary residence but it wants to add the two debt balances together as "total indebtedness" which doesn't make sense, I think each one should be analyzed separately.
I found this thread that is from last year but has some relevant and recent activity on it as well... still no answers to my issue but more people discussing it: