Problem Description

Where do I enter amounts from Form 1098 for home mortgage interest?


Solution Description
To enter Form 1098, box 1 & box 2:
  1. Go to Screen 25, Itemized Deductions
  2. Scroll down to the Interest section
  3. Hold down Ctrl+E in, Home mortgage interest & points on Form 1098 [A] (Ctrl+E)
  4. Enter the Description
  5. Enter the Amount
  6. Click OK on the Home Mortgage window once complete

Enter the deductible portion of home mortgage interest paid directly or indirectly to financial institutions for which the taxpayer received a Form 1098, Mortgage Interest Statement. Lacerte does not apply limitations to entries in this field (see the note below for excess mortgage interest information). If the taxpayer is claiming the mortgage interest credit and you have entries on Screen 38.2, EIC, Residential Energy, Other Credits (Screen 39 in 2013 and prior years) in the field Mortgage Interest Credit, Lacerte reduces the home mortgage interest by the credit.

Note- Refer to the Excess Mortgage Interest input section at the bottom of Screen 25, Itemized Deductions if:

  1. The taxpayer took out any mortgage after October 13, 1987, and used the proceeds for purposes other than to buy, build or improve the home, and all of these mortgages totaled over $100,000 at any time during 2009. The limit is $50,000 if married filing separately. An example of this type of mortgage is a home equity loan used to pay off credit card bills, buy a car, or pay tuition.
  2. The taxpayer took out any mortgage after October 13, 1987, and used the proceeds to buy, build or improve the home, and these mortgages plus any mortgages taken out on or before October 13, 1987, totaled over $1 million at any time during 2009. The limit is $500,000 if married filing separately.
     

Per the 1098 instructions for box 3,

"Do not deduct this amount. It is a refund (or credit) for overpayment(s) of interest you made in a prior year or years. If you itemized deductions in the year(s) you paid the interest, you may have to include part or all of the box 3 amount on the "Other income" line of your [current tax year] Form 1040. No adjustment to your prior year(s) tax return(s) is necessary. For more information, see Pub. 936 and Itemized Deduction Recoveries in Pub. 525."

To enter Form 1098, box 3 as Other Income:

  1. Go to Screen 14.1, SS Benefits, Alimony, Miscellaneous Income.
  2. Scroll down to the Alimony and Other Income section.
  3. Hold down Ctrl+E in, Other income.
  4. Enter a Description.
  5. Enter the Amount.
  6. Click OK on the Other income detail window once complete.


To enter Form 1098, box 4:

  1. Go to Screen 25, Itemized Deductions.
  2. Scroll down to the Interest section.
  3. Enter the amount in, Qualified mortgage insurance premiums paid on post 12/31/06 contracts.
 
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