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February 13, 2021
Question

Should I keep the amount from Box 2 of our 1098, even if we have paid that amount off in 2020?

  • February 13, 2021
  • 1 reply
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We paid off the outstanding mortgage principal on December 21, 2020.  Do we enter it  or leave it off?

1 reply

February 15, 2021

I will suggest you to enter a zero.  Your outstanding mortgage principal balance is the amount of money you still owe on your home loan. If you have paid off the loan by end of 2020, enter zero. 

 

If you follow the on-screen interview questions, there should be a screen asks you if you have paid off your loan by 2020. See image

 

Although you have paid off your loan, if you have paid any mortgage interest during the year, you can still claim a deduction on your taxes. You receive a Form 1098 if you paid any mortgage interest, mortgage insurance premium or points.  However, there is no guarantee you will receive a tax break from your mortgage interest.  Unless the total of itemized deductions exceeds the standard deduction for your filing status, you will not see any change in tax due or refund.  In the program, when you enter all the possible itemized deductions such as mortgage interest, property taxes, medical expenses, charitable contributions, the program will do the math to confirm if you will qualify to for the tax break.