I did a refinance in Dec 2020. I have two 1098.

[cynosurexy]

For the first lender's 1098, I entered the info in Turbotax and get deduction for Federal and CA taxes. For the second 1098, after I entered a small amount (like $500), my federal tax was increased by $2400+ and my CA tax was increased as well. 

Why I have to pay more tax for mortgage interest I paid? Is it a Turbotax bug?

Thanks, 

[cynosurexy]

So it looks like after I entered the very small amount of mortgage interest I paid, Turbotax decided to switch me to "standard deduction" not itemized one. That is why I actually need to pay $2000+ for the $500 interest I paid. Why is that? Can anyone help explain?

[LinaJ2020]

The issue has been submitted and is currently under investigation.  Please click on the following link and sign up for an email notification when it's fixed.  

Limited interest and points must be entered

Home Mortgage interest being limited

Thank You for your patience. 

Your deduction is generally limited if all mortgages used to buy, construct, or improve your first home (and second home if applicable) total more than $1 million ($500,000 if you use married filing separately status) for tax years prior to 2018. Beginning in 2018, this limit is lowered to $750,000. Mortgages that existed as of December 14, 2017 will continue to receive the same tax treatment as under the old rules.

For tax years before 2018, you can also generally deduct interest on home equity debt of up to $100,000 ($50,000 if you're married and file separately) regardless of how you use the loan proceeds.  For details and learn more, click here: Home mortgage interest limitation