Question

Due to refinance (same bank), I got two 1098s. I see a big reduction in my tax due when I enter the first 1098. I see big increase in tax due upon adding 2nd 1098. Why?

Forum|Forum|4 years ago
April 18, 2022
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TurboTax Premier Online

Be sure you are averaging the mortgage balance. It is possible that it limited your mortgage interest deduction. If, for example, your balance on the first 1098 is $700,000 and then on July 1st you refinanced and on the second one it is $650,000 , this would make your total mortgage balance $1,350,000 which would limit your interest deduction. If you average the balances then you total balance you would enter for the 1st mortgage would be $350,000 and for the second it would be $325,000. This would remove the limited mortgage interest deduction.

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