Box 1 and box 2
- Go to the Input Return tab.
- From the left of the screen, select Deductions and choose Itemized Deductions (Sch A).
- From the top of the screen, select the Interest section.
- Click in the field labeled Home mortgage interest & points on Form 1098 [Adjustment] to expand the input.
- Enter the Description and Amount.
- 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. The program doesn't 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 in the Credits section in the screen, EIC, Residential, Oth. Credits in the section, Mortgage Interest Credit (8396), the program will reduce the home mortgage interest by the credit.
A note on the Excess Mortgage Interest input section
Refer to the Excess Mortgage Interest input section at the bottom of the screen, Itemized Deductions (Sch A) if:
- 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. 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.
- 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. The limit is $500,000 if married filing separately.
Box 3
Per the IRS Instructions for Form 1098, 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 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.
Follow these steps to enter Form 1098, box 3 as Other Income:
- Go to the Input Return tab.
- From the left of the screen, select Income and choose SS Benefits, Alimony, Misc. Income.
- Scroll down to the Alimony and Other Income section.
- Click in the field labeled Other income (Click on the button to expand) to expand the input field.
- Enter a Description and Amount.
Box 4
The deduction for mortgage insurance premiums expired on December 31, 2017 and hasn't yet been extended. ProConnect still contains an input field, however, it won't flow to Schedule A or 1040.
Follow these steps to enter box 4:
- Go to the Input Return tab.
- From the left of the screen, select Deductions and choose Itemized Deductions (Sch A).
- From the top of the screen, select the Interest section.
- Enter the amount in the field Qualified mortgage insurance premiums paid on post 12/31/06 contracts.