Home Mortgage Interest Limitation Worksheet

[Arnie in Oregon]

I've just found out -- unfortunately, by a client getting an audit letter -- that ProSeries professional does NOT automatically alert me when my client's mortgage interest deduction is limited because the balance of the mortgage exceeds $750,000.  Even though, on the bottom of the Form 1098 Mortgage Interest Worksheet, there is box entitled, "Home Mortgage Interest Limitation Smart Worksheet," it's NOT a smart worksheet.  I had to go to Schedule A, quick in the box below Line 8 on the "QuickZoom to Home Mortgage Interest Worksheet," and then fill in the information about my client's mortgage amount and interest paid by hand (thankfully, the worksheet does calculate the amount of deductible and nondeductible interest, and then send the deductible figure back to Schedule A). 

[Taxprohere]

how would ProSeries software know what the average mortgage loan indebtedness is for the year unless the tax preparer enters that information?

[gsa11]

@Arnie in Oregon I had the same thing happen to me.

@Taxprohere If you are completing the 1098 worksheet then I would expect the software to be able to recognize the date of the mortgage and do the math for me or at least trigger a reminder for me to go back to it.

[Arnie in Oregon]

Yes, sometimes I think we ProSeries users are the unadored stepchildren (as compared to Lacerte users) as far as Intuit is concerned.  The answer I typically get in these situations is "post something, and maybe the programmers will add it someday."  Oh well, after 26 years, I'm not ready to change software (and I'm otherwise quite happy with what I've got), so I just have to stay on my toes and watch for this sort of thing.

[Taxprohere]

@gsa11, @Arnie in Oregon 

The original statement was "I had to go to Schedule A, quick in the box below Line 8 on the "QuickZoom to Home Mortgage Interest Worksheet," and then fill in the information about my client's mortgage amount and interest paid by hand"  which made it sound that Arnie just entered the amount of interest on Schedule A without using the worksheet. Unless it was not clear in what he wrote, yes, you do need to enter the information in the worksheet.  How else can the interest limitation be calculated without entered the beginning and ending indebtedness and months of loan during the year? 

[sjrcpa]

You have to fill out the worksheet in Lacerte, too. Although I think you get a Diagnostic along the lines of "the mortgage interest deduction seems high"

[abctax55]

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