Yes, the limitation is $750,000, unless your are married filing separately, which is $375,00.
That is the limit for mortgage debt, not the amount of interest. If the amount in box 2 of your 1098-INT is more than $750,000, your deduction will be limited.
There are some other factors that may limit your mortgage interest. If your mortgage not used to buy, build, or substantially improve your home, some of all of your interest will not be deductible.
If the amount of your mortgage exceeds the value of your home, your mortgage interest may be limited.
If you have more than one 1098-INT, you have to be careful about the way you answer the questions in this section.
If you still have questions about why your mortgage interest was limited, please respond back with more details, such as the figure in box 2 of 1098-INT and whether your have more than one 1098-INT.
Thank you for you response! Yes, the box 2 exceeds 750K. What makes me concerned, the message from TurboTax says "It's not common, but we could be missing details...", it makes I feel I did something wrong because I think it is very common to have a mortgage balance > 750K.
What should I fill here? Just keep it as 21,281? Or return back to fix something?
Thanks!
No, leave as is. TurboTax automatically calculates the qualified mortgage interest based on the 750k Limit and prorates it. Looks like you got your total interest deduction based off your mortgage balance, don't change. If you have more than one qualified mortgage, it'll still go by the 750k limit unless grandfathered in; and again prorate based off maximum.