Mortgage Interest deduction for loan over 750K

Forum|Forum|3 years ago
January 21, 2023
2 replies
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I am asking this question after searching the community and not finding a satisfactory answer.

My situation is as follows:

1. Home mortgage of over $1 Million taken in 2021 at 3%

2. Property and school taxes for the year 2022 were $20k

My query is as follows

1. Mortgage interest publication says that the interest paid on the first $750k is deductible.

How do I calculate the interest deductible since my balance is over $1 Million

2. Turbo Tax last year asked me to take a standard deduction last year, however I feel that it must be a mistake and maybe I will benefit from higher deductions if I did itemized deductions ?

Please advise on what is the correct way to handle this

Not A Product Question

Best answer by Anonymous_

1. When you enter the information from your Form 1098, make sure you enter your loan balance when you get to the screen shown in the screenshot below.

Untitled.png

Anonymous_Answer

Employee

1. When you enter the information from your Form 1098, make sure you enter your loan balance when you get to the screen shown in the screenshot below.

Untitled.png

narayananvm

@Anonymous_ I figured out that TurboTax takes the average between the outstanding loan amount from the start of the tax year and the amount as of the start of the next year ie end of the tax year. This provides better basis when calculating down the eligible mortgage interest deduction amount. However IRS webpage based worksheet only indicates to consider the outstanding loan amount at the start of the tax year. May I know why TT takes this different approach (which I think is logically correct)?