How do I enter a 1098 with Box 4 checked?

Forum|Forum|3 years ago
February 20, 2023
1 reply
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Hi - uploading or manually entering a 1098 in Federal / Deductions & Credits does not allow me to enter a Box 4 value. Any pointers?

TurboTax Deluxe Online

KrisD15

Box 4 would report a refund of interest paid in a prior year.

That amount is not needed nor reported on your tax return.

It is not deductible because you didn't pay it this tax year, it was refunded and not included as interest paid in Box 1.

IF THE REFUND was for a year when you did deduct the interest, you may need to recover the itemized deduction for that prior year.

How that works is basically like this-

you would figure that prior year return as if you had not deducted that interest,

so if that year you claimed 2,000 interest but was refunded 100, you would "refigure" (NOT AMEND) the prior return claiming 1,900 interest.

If your refund drops by $5.00, you would need to claim 5 dollars as "other income" on this years return.

More information IRS Pub 525 page 24

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miccarsidAuthor

Thank you for your reply. The wrinkle in the information you provided is that the TY in reference would have been for TY2010. Per IRS Form 4506, "Copies of Forms 1040, 1040A, and 1040EZ are generally available for 7 years from filing before they are destroyed by law.". Further, Intuit's product doesn't allow me to enter the refunded interest.
Thank you for any additional pointers.

AmyC

Employee

As KrisD said above, the refund of interest would not be reported on this tax return as a refund of interest. You do not want to put that into the program.

If anything, you would add the small amount of change in income taxed for 2010. If you have not kept records of your tax returns, you are unable to complete this step.

If you did not itemize in 2010, there is no effect. If you did and the number is large enough to create a big enough tax difference, you may receive a letter from the IRS. If not, the difference isn't big enough for them to pursue the issue.

I recommend downloading your return each year so you have a copy.

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