Mortgage interest not counting towards deductions

[Brian93]

2021 -- same thing is happening to me

[ims_badger]

Thanks folks, I hadn’t started on 2021 yet and already you reminded me about this bug. I feel like sharing already paid me back. Well, not as much as Intuit actually fixing the bug, but what should we really expect 😉

[DianeW777]

Thank you for providing this information. We are aware of this experience. Please sign up for email notification when an update related to this issue is available here.

[blasterj]

My issue is that it is not handling a straight refinance properly.  It is doubling the amount of the mortgage( like you had 2 mortgages for the whole year) so the average daily is twice what it should be and therefore is overly limiting the mortgage interest.

[JamesG1]

Some TurboTax customers are experiencing an issue with their home mortgage average balance. This can cause the home mortgage interest to be incorrectly limited.  This may be affecting your tax return.

Please sign up for email notifications when an update related to this issue is available here.

See also this TurboTax Help.

[notrocketscience]

My version (2020 Premier) says add up all the 1098s for the same refi and enter only one. I did this then added an explanatory note because the amount entered doesn’t match the 1098. It worked, but I am holding off on finalizing just in case a better solution is provided. 

[AlanT222]

Your solution will work.  However, TurboTax is working on the issue so that you do not have to do the work-around.  

Some TurboTax customers are experiencing an issue with their Home Mortgage Average Balance. This can cause the Home Mortgage Interest to be incorrectly limited.

If you're experiencing the issue above, please go here to receive email notifications when any updates related to this issue become available.

[blasterj]

Thanks.  I have had to do this computation manually for the last 2 years and know what the "formulas" are.  So what you suggest is a way to enter the data so the correct answer is computed.  Hopefully Turbo Tax can fix this before I am ready to file.

[JoannaB2]

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[jamesB2]

Same problem here.....this is frustrating! I saw some solution about changing the entry in the forms section, but I couldnt find it, wonder if it matters if I am online, instead of desktop.

[AlanT222]

If your total home debt is under $375,000 ($250,000 for married filing separate) there is nothing new for you to do in 2020. Enter each 1098 as you normally would.

Home Debt Over $375,000

Under tax law, you are limited on the amount of home interest you can deduct. The limit is based on the loan amount and date of the origination of debt. We want to make sure we calculate this correctly for you. 

If you refinanced last year, you’ll have a Form 1098 from your previous lender and one from the lender you refinanced with. You’ll need both forms. 

Follow these steps to enter your mortgage information:

1. Gather all of your 1098 forms related to your refinance (the form from your original lender and the form from your new lender)
2. Grab a calculator and add together the box 1 amount from each form. Enter the total in TurboTax as Box 1 Mortgage interest.
3. Add the Box 5 amount from each form and enter the total as Box 5 Mortgage insurance premiums. (If you weren’t required to pay mortgage interest, these boxes will be blank on your forms and you won’t enter anything.)
4. Add the property tax paid from each form and enter it in the Property (real estate) taxes box.

Next, finish adding info for boxes 2, 3, 7, and 11 using Form 1098 for the original loan.

What if I have more than two 1098s?

You should combine all of the 1098s directly related to the refinance and enter it as one 1098.  An example of this is if you refinanced two loans into one loan. Any 1098s not directly related to the refinance should get entered separately.

What if I paid points?

Points on Loans Paid Off in 2020: Enter the points on your 1098 you have started and mark you paid off the loan when promoted.

Points on Loans on New Loans: You will want to enter a separate 1098 to cover these points paid. When prompted, enter 0.00 for Boxes 1, 2, 5, and the Property (real estate) taxes box, and checkbox 7, as you’ve already entered the details on your first 1098. For Box 3, add the date in 2020 when the loan originated.

[Brian93]

I am online as well. Couldn’t figure out how to get to the forms to make the suggested adjustments.

[JamesG1]

Some TurboTax customers are experiencing an issue with their home mortgage average balance. This can cause the home mortgage interest to be incorrectly limited.  This may be affecting your tax return.

Please sign up for email notifications when an update related to this issue is available.

See this TurboTax Help.

[new user1]

I'm not able to do this in the online version -- any help there?

[MarilynG1]

@new user1 If you have an Original Mortgage and a Refi reported on separate 1098's, click this link for more info for a Workaround for Limited Home Mortgage Interest. 

You can do this online. 

Make sure you are filing with Itemized Deductions.  If using the Standard Deduction, you don't get a separate deduction for Mortgage Interest, even though you entered it. 

Click this link for more info on Itemized vs. Standard Deductions.