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W4 estimator and Mortgage Interest deduction 1098
Posted on 1/19/23 at 3:56 pm
Posted on 1/19/23 at 3:56 pm
I was going to recheck my W4 elections since my company and pay has recently changed. I was going through the steps and noticed the section related to Mortgage interest deduction (1098 form) on the IRS W4 estimator website now displays a Mortgage Interest credit instead of a deduction from taxable income. I did some research and the credit appears to be different from the deduction most people get with the 1098 form.
Does anyone know if something changed and why IRS website would remove/change this to the credit that many people don't qualify for? I ask because if I don't add my mortgage interest deduction in the tool, it severely changes my taxable income and return amount and I
don't need to be paying the government.
Does anyone know if something changed and why IRS website would remove/change this to the credit that many people don't qualify for? I ask because if I don't add my mortgage interest deduction in the tool, it severely changes my taxable income and return amount and I
don't need to be paying the government.
1
Posted on 1/19/23 at 8:32 pm to cberni1
You are on the wrong screen. That is the credits screen. You enter mortgage interest paid on the prior screen, where it discusses itemized deductions.
Posted on 1/20/23 at 9:47 am to LSUFanHouston
I'm not itemizing deductions, especially since the stndard deduction was again raised to 27K for married filling jointly. Also, last year, that section was definitely for mortgage interest deduction and not a credit. I'm 99.9% sure of that
Posted on 1/20/23 at 10:02 am to cberni1
quote:
I'm not itemizing deductions, especially since the stndard deduction was again raised to 27K for married filling jointly. Also, last year, that section was definitely for mortgage interest deduction and not a credit. I'm 99.9% sure of that
Mortgage interest has never been a credit unless you are in a very few specific situations, the vast majority of people are not in. You have to hold a mortgage credit certificate and generally these are only available if you received low or moderate income mortgage assistance, and/ or certain veteran programs.
If you are taking the standard, the 1098 is of no value to you.
I will say that the W-4 estiamtor program has undergone significant revisions recently.
Posted on 1/20/23 at 10:20 am to LSUFanHouston
I'm certainly no expert here but i've submitted my interest deduction from the 1098 form for several years now via TurboTax and it has never been an issue. Either i've totally misunderstood that and submitted or it is a viable option. Turbotax in the past has never stopped me from filing that even though i was taking the standard deduction so i don't know what's going on.
Posted on 1/20/23 at 10:43 am to LSUFanHouston
quote:To be clear, i'm not doubting you and the more reading i do, the more it appears you are correct but i still don't know why that wouldn't be questioned on a tax return by TurboTax if i chose standard deduction but added this itemized amount.
If you are taking the standard, the 1098 is of no value to you.
Posted on 1/20/23 at 12:25 pm to cberni1
You may be entering the 1098 each year, but TurboTax is comparing your itemized deduction inputs with the standard deduction and using the higher amount. There is likely a screen at some point in the process that explains or references this.
Posted on 1/20/23 at 1:55 pm to cberni1
Turbo tax has you enter it for two reason.
1. They have to check whether it’s better for you to itemize or use the standard deduction.
2. Even if you use the standard deduction for Federal, you probably don’t for state.
1. They have to check whether it’s better for you to itemize or use the standard deduction.
2. Even if you use the standard deduction for Federal, you probably don’t for state.
Posted on 1/20/23 at 2:44 pm to cberni1
quote:
To be clear, i'm not doubting you and the more reading i do, the more it appears you are correct but i still don't know why that wouldn't be questioned on a tax return by TurboTax if i chose standard deduction but added this itemized amount.
The software won't know if you should take the standard or not, unless it first calculates what you could itemize.
And as said by another poster, some states still have a low standard deduction so you could well itemize in those states. For example, California is a big one here.
Well, maybe there is an option in some programs to force the standard and then you would not have to enter it in. But TT seems like it wants to get the full picture.
But if you don't have a Schedule A in your tax return, you didn't use the mortgage deduction.
This post was edited on 1/20/23 at 2:46 pm
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