Hello,
I’m using TurboTax Online and am encountering an issue with how mortgage points are handled.
I purchased a home last year with a mortgage exceeding the $750K limit and paid for mortgage points (through seller credit). My mortgage was transferred to a second lender, so I received two 1098 forms:
When I enter the points on the first 1098 (where TurboTax prompts about purchasing points), the prorated total of points and mortgage interest does not reflect the points. However, if I enter the points under the second 1098, the calculation appears correct. I’ve ensured that I marked the second 1098 as the most recent one in both cases.
Am I missing something, or could this be a software bug?
Thank you in advance.
This is how I entered the two forms for a loan as you describe:
LOAN BOUGHT BY NEW LENDER same year w/POINTS
Enter the first (oldest) 1098 and indicated that it was secured by home
Select BOTH "new loan with points" (if points were paid) and "bought or improved home in 2024"
Enter points (if applicable)
Select YES "This loan was paid off or refinanced with a different lender in 2024".
(NOTE; If you indicate NO to "paid off or refinanced", the program will add the mortgage balances)
No, not most recent 1098
"HELOC or refinance?" NO
Yes, only used on this home
The points (if applicable) and interest should be added and reported on Schedule A
Enter the second 1098
Yes, secured by home
Indicate that you bought or improved the home with this loan, but DO NOT indicate that it was a NEW loan, DO NOT ENTER POINTS A SECOND TIME
Yes, most recent 1098
Neither HELOC nor refinance
Yes, only used on this home
DONE
All interest and points were reported as deductions on Schedule A
I did get a "Let's Check These Entries" when I ran "Smart Check" where I had to indicate if either loan was a refinance.
I selected "Refinance NO"
The full deduction remained on Schedule A