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MORTGAGE INTEREST

Mortgage interest part explains what you can deduct as home mortgage in how to report deductible interest on your tax return

HOME MORTGAGE INTEREST:

It is a Interest on loans secured by principal residence and one other reside Limitation on deductible interest applies for home acquisition loans exceedi to buy, build, or improve your home are called home acquisition debt) Limitation on deductible interest applies for home equity loans exceeding $ other than to buy, build, or improve your home) Interest reported on Form 1098 flows to line 10 of Sch A & interest paid to i Deduction subject to phase out rules;

POINTS :

Are certain charges paid by a borrower to obtain a home mortgage; Termed as loan origination fees, loan discount, maximum loan charges or d Points paid on loan to purchase a home is fully deductible in the year of pa Points paid on refinance of loan are deductible over the life of the loan; Points reported on 1098 flow to line 10 of Sch A & points not reported on 10

Subject to phase out rules;

Form 1098

Box 1 : Mortgage interest received from payer(s) \ borrower(s) Box 2: Points paid on purchase of principal residence Box 3 : Refund of Overpaid interest Box 4 : shows mortgage insurance premiums paid. Box 5 : It shows real estate taxes, or insurance paid from escrow

terest. It includes discussion on points and on

nce termed as second home; ng $1 million; (Mortgages you took out after October 13, 1987,

100,000; (Mortgages you took out after October 13, 1987,

ndividuals flows to line 11 of Sch A;

iscount points; yment;

98 flow to line 12 of Sch A;

Types Of Source Document For 1098-Mortgage Interest

  • 1 Organizer Page

  • 2 1098-Mortgage Interest

  • 3 Handwritten Information

  • 4 Typed Information/Printed Income Summary

  • 5 Settlement Statement

1 Organizer Page

Types Of Source Document For 1098-Mortgage Interest 1 Organizer Page 2 1098-Mortgage Interest 3 Handwritten Information
2 - 1098 - Mortgage Interest

2 - 1098 - Mortgage Interest

2 - 1098 - Mortgage Interest

Input Screens in Tax Software

  • 1 A-3

  • 2 M-8 - If Paid for Home - as Business use

  • 3 E-1 - If paid for Rental House

In pro system:

We have to input mortgage interest paid in inpu

Refund of overpaid interest is considered it as ot

Box no.Description

  • 1 Mortgage interest received from payer(s

  • 2 Points paid on purchase of principal resi

  • 3 Refund of overpaid interest

  • 4 Mortgage insurance premiums

of home

t form A-3 line 30 or 54 and deductible points to be entered on line 35. her income and it is to considered in input form M-1.

Input Screen & Box

Form A-3, line 30 or 54

Form A-3, line 35

Output

Schedule A, line 10 Schedule A, line 10

Less overpaid interest from Form A-3, lOverpaid interest will less from Schedu

le A, line 10