Why did my 1098 from my new refinanced mortgage decrease my refund?

It may be the way you are answering the 1098 Mortgage form interview questions. Click here for some suggestions on how to properly answer the questions. 

Another reason my be due to getting hit with Alternative Minimum Tax (AMT). As the name says, it's an "alternative" tax which we calculate behind-the-scenes, along with your regular federal tax. If the alternate method results in a higher tax than the regular method, you pay the difference on top of your regular tax.

Common reasons for getting hit with the AMT include:

• • Exercising or selling ISOs (incentive stock options)
  • Deducting interest from a large second mortgage for a house boat or recreational vehicle
  • Realizing a large capital gain (for example, when you sell a home or other investments for a profit)
  • Having a household income greater than the phase-out thresholds while also having a significant amount of itemized deductions

If you are subject to the AMT, you don't have to pay it separately; we've already accounted for it in your refund or taxes owed amount.