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Free 2011 Tax Return

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Free 2011 Tax Return

Free 2011 tax return Publication 936 - Main Content Table of Contents Part I. Free 2011 tax return Home Mortgage InterestSecured Debt Qualified Home Special Situations Points Mortgage Insurance Premiums Form 1098, Mortgage Interest Statement How To Report Special Rule for Tenant-Stockholders in Cooperative Housing Corporations Part II. Free 2011 tax return Limits on Home Mortgage Interest DeductionHome Acquisition Debt Home Equity Debt Grandfathered Debt Table 1 Instructions How To Get Tax HelpLow Income Taxpayer Clinics Part I. Free 2011 tax return Home Mortgage Interest This part explains what you can deduct as home mortgage interest. Free 2011 tax return It includes discussions on points, mortgage insurance premiums, and how to report deductible interest on your tax return. Free 2011 tax return Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). Free 2011 tax return The loan may be a mortgage to buy your home, a second mortgage, a line of credit, or a home equity loan. Free 2011 tax return You can deduct home mortgage interest if all the following conditions are met. Free 2011 tax return You file Form 1040 and itemize deductions on Schedule A (Form 1040). Free 2011 tax return The mortgage is a secured debt on a qualified home in which you have an ownership interest. Free 2011 tax return Secured Debt and Qualified Home are explained later. Free 2011 tax return  Both you and the lender must intend that the loan be repaid. Free 2011 tax return Fully deductible interest. Free 2011 tax return   In most cases, you can deduct all of your home mortgage interest. Free 2011 tax return How much you can deduct depends on the date of the mortgage, the amount of the mortgage, and how you use the mortgage proceeds. Free 2011 tax return   If all of your mortgages fit into one or more of the following three categories at all times during the year, you can deduct all of the interest on those mortgages. Free 2011 tax return (If any one mortgage fits into more than one category, add the debt that fits in each category to your other debt in the same category. Free 2011 tax return ) If one or more of your mortgages does not fit into any of these categories, use Part II of this publication to figure the amount of interest you can deduct. Free 2011 tax return   The three categories are as follows. Free 2011 tax return Mortgages you took out on or before October 13, 1987 (called grandfathered debt). Free 2011 tax return Mortgages you took out after October 13, 1987, to buy, build, or improve your home (called home acquisition debt), but only if throughout 2013 these mortgages plus any grandfathered debt totaled $1 million or less ($500,000 or less if married filing separately). Free 2011 tax return Mortgages you took out after October 13, 1987, other than to buy, build, or improve your home (called home equity debt), but only if throughout 2013 these mortgages totaled $100,000 or less ($50,000 or less if married filing separately) and totaled no more than the fair market value of your home reduced by (1) and (2). Free 2011 tax return The dollar limits for the second and third categories apply to the combined mortgages on your main home and second home. Free 2011 tax return   See Part II for more detailed definitions of grandfathered, home acquisition, and home equity debt. Free 2011 tax return    You can use Figure A to check whether your home mortgage interest is fully deductible. Free 2011 tax return This image is too large to be displayed in the current screen. Free 2011 tax return Please click the link to view the image. Free 2011 tax return Figure A. Free 2011 tax return Is My Home Mortgage Interest Fully Deductible? Secured Debt You can deduct your home mortgage interest only if your mortgage is a secured debt. Free 2011 tax return A secured debt is one in which you sign an instrument (such as a mortgage, deed of trust, or land contract) that: Makes your ownership in a qualified home security for payment of the debt, Provides, in case of default, that your home could satisfy the debt, and Is recorded or is otherwise perfected under any state or local law that applies. Free 2011 tax return In other words, your mortgage is a secured debt if you put your home up as collateral to protect the interests of the lender. Free 2011 tax return If you cannot pay the debt, your home can then serve as payment to the lender to satisfy (pay) the debt. Free 2011 tax return In this publication, mortgage will refer to secured debt. Free 2011 tax return Debt not secured by home. Free 2011 tax return   A debt is not secured by your home if it is secured solely because of a lien on your general assets or if it is a security interest that attaches to the property without your consent (such as a mechanic's lien or judgment lien). Free 2011 tax return   A debt is not secured by your home if it once was, but is no longer secured by your home. Free 2011 tax return Wraparound mortgage. Free 2011 tax return   This is not a secured debt unless it is recorded or otherwise perfected under state law. Free 2011 tax return Example. Free 2011 tax return Beth owns a home subject to a mortgage of $40,000. Free 2011 tax return She sells the home for $100,000 to John, who takes it subject to the $40,000 mortgage. Free 2011 tax return Beth continues to make the payments on the $40,000 note. Free 2011 tax return John pays $10,000 down and gives Beth a $90,000 note secured by a wraparound mortgage on the home. Free 2011 tax return Beth does not record or otherwise perfect the $90,000 mortgage under the state law that applies. Free 2011 tax return Therefore, the mortgage is not a secured debt and John cannot deduct any of the interest he pays on it as home mortgage interest. Free 2011 tax return Choice to treat the debt as not secured by your home. Free 2011 tax return   You can choose to treat any debt secured by your qualified home as not secured by the home. Free 2011 tax return This treatment begins with the tax year for which you make the choice and continues for all later tax years. Free 2011 tax return You can revoke your choice only with the consent of the Internal Revenue Service (IRS). Free 2011 tax return   You may want to treat a debt as not secured by your home if the interest on that debt is fully deductible (for example, as a business expense) whether or not it qualifies as home mortgage interest. Free 2011 tax return This may allow you, if the limits in Part II apply, more of a deduction for interest on other debts that are deductible only as home mortgage interest. Free 2011 tax return Cooperative apartment owner. Free 2011 tax return   If you own stock in a cooperative housing corporation, see the Special Rule for Tenant-Stockholders in Cooperative Housing Corporations , near the end of this Part I. Free 2011 tax return Qualified Home For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. Free 2011 tax return This means your main home or your second home. Free 2011 tax return A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities. Free 2011 tax return The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Free 2011 tax return Otherwise, it is considered personal interest and is not deductible. Free 2011 tax return Main home. Free 2011 tax return   You can have only one main home at any one time. Free 2011 tax return This is the home where you ordinarily live most of the time. Free 2011 tax return Second home. Free 2011 tax return   A second home is a home that you choose to treat as your second home. Free 2011 tax return Second home not rented out. Free 2011 tax return   If you have a second home that you do not hold out for rent or resale to others at any time during the year, you can treat it as a qualified home. Free 2011 tax return You do not have to use the home during the year. Free 2011 tax return Second home rented out. Free 2011 tax return   If you have a second home and rent it out part of the year, you also must use it as a home during the year for it to be a qualified home. Free 2011 tax return You must use this home more than 14 days or more than 10% of the number of days during the year that the home is rented at a fair rental, whichever is longer. Free 2011 tax return If you do not use the home long enough, it is considered rental property and not a second home. Free 2011 tax return For information on residential rental property, see Publication 527. Free 2011 tax return More than one second home. Free 2011 tax return   If you have more than one second home, you can treat only one as the qualified second home during any year. Free 2011 tax return However, you can change the home you treat as a second home during the year in the following situations. Free 2011 tax return If you get a new home during the year, you can choose to treat the new home as your second home as of the day you buy it. Free 2011 tax return If your main home no longer qualifies as your main home, you can choose to treat it as your second home as of the day you stop using it as your main home. Free 2011 tax return If your second home is sold during the year or becomes your main home, you can choose a new second home as of the day you sell the old one or begin using it as your main home. Free 2011 tax return Divided use of your home. Free 2011 tax return   The only part of your home that is considered a qualified home is the part you use for residential living. Free 2011 tax return If you use part of your home for other than residential living, such as a home office, you must allocate the use of your home. Free 2011 tax return You must then divide both the cost and fair market value of your home between the part that is a qualified home and the part that is not. Free 2011 tax return Dividing the cost may affect the amount of your home acquisition debt, which is limited to the cost of your home plus the cost of any improvements. Free 2011 tax return (See Home Acquisition Debt in Part II. Free 2011 tax return ) Dividing the fair market value may affect your home equity debt limit, also explained in Part II . Free 2011 tax return Renting out part of home. Free 2011 tax return   If you rent out part of a qualified home to another person (tenant), you can treat the rented part as being used by you for residential living only if all of the following conditions apply. Free 2011 tax return The rented part of your home is used by the tenant primarily for residential living. Free 2011 tax return The rented part of your home is not a self-contained residential unit having separate sleeping, cooking, and toilet facilities. Free 2011 tax return You do not rent (directly or by sublease) the same or different parts of your home to more than two tenants at any time during the tax year. Free 2011 tax return If two persons (and dependents of either) share the same sleeping quarters, they are treated as one tenant. Free 2011 tax return Office in home. Free 2011 tax return   If you have an office in your home that you use in your business, see Publication 587, Business Use of Your Home. Free 2011 tax return It explains how to figure your deduction for the business use of your home, which includes the business part of your home mortgage interest. Free 2011 tax return Home under construction. Free 2011 tax return   You can treat a home under construction as a qualified home for a period of up to 24 months, but only if it becomes your qualified home at the time it is ready for occupancy. Free 2011 tax return   The 24-month period can start any time on or after the day construction begins. Free 2011 tax return Home destroyed. Free 2011 tax return   You may be able to continue treating your home as a qualified home even after it is destroyed in a fire, storm, tornado, earthquake, or other casualty. Free 2011 tax return This means you can continue to deduct the interest you pay on your home mortgage, subject to the limits described in this publication. Free 2011 tax return   You can continue treating a destroyed home as a qualified home if, within a reasonable period of time after the home is destroyed, you: Rebuild the destroyed home and move into it, or Sell the land on which the home was located. Free 2011 tax return   This rule applies to your main home and to a second home that you treat as a qualified home. Free 2011 tax return Time-sharing arrangements. Free 2011 tax return   You can treat a home you own under a time-sharing plan as a qualified home if it meets all the requirements. Free 2011 tax return A time-sharing plan is an arrangement between two or more people that limits each person's interest in the home or right to use it to a certain part of the year. Free 2011 tax return Rental of time-share. Free 2011 tax return   If you rent out your time-share, it qualifies as a second home only if you also use it as a home during the year. Free 2011 tax return See Second home rented out , earlier, for the use requirement. Free 2011 tax return To know whether you meet that requirement, count your days of use and rental of the home only during the time you have a right to use it or to receive any benefits from the rental of it. Free 2011 tax return Married taxpayers. Free 2011 tax return   If you are married and file a joint return, your qualified home(s) can be owned either jointly or by only one spouse. Free 2011 tax return Separate returns. Free 2011 tax return   If you are married filing separately and you and your spouse own more than one home, you can each take into account only one home as a qualified home. Free 2011 tax return However, if you both consent in writing, then one spouse can take both the main home and a second home into account. Free 2011 tax return Special Situations This section describes certain items that can be included as home mortgage interest and others that cannot. Free 2011 tax return It also describes certain special situations that may affect your deduction. Free 2011 tax return Late payment charge on mortgage payment. Free 2011 tax return   You can deduct as home mortgage interest a late payment charge if it was not for a specific service performed in connection with your mortgage loan. Free 2011 tax return Mortgage prepayment penalty. Free 2011 tax return   If you pay off your home mortgage early, you may have to pay a penalty. Free 2011 tax return You can deduct that penalty as home mortgage interest provided the penalty is not for a specific service performed or cost incurred in connection with your mortgage loan. Free 2011 tax return Sale of home. Free 2011 tax return   If you sell your home, you can deduct your home mortgage interest (subject to any limits that apply) paid up to, but not including, the date of the sale. Free 2011 tax return Example. Free 2011 tax return John and Peggy Harris sold their home on May 7. Free 2011 tax return Through April 30, they made home mortgage interest payments of $1,220. Free 2011 tax return The settlement sheet for the sale of the home showed $50 interest for the 6-day period in May up to, but not including, the date of sale. Free 2011 tax return Their mortgage interest deduction is $1,270 ($1,220 + $50). Free 2011 tax return Prepaid interest. Free 2011 tax return   If you pay interest in advance for a period that goes beyond the end of the tax year, you must spread this interest over the tax years to which it applies. Free 2011 tax return You can deduct in each year only the interest that qualifies as home mortgage interest for that year. Free 2011 tax return However, there is an exception that applies to points, discussed later. Free 2011 tax return Mortgage interest credit. Free 2011 tax return    You may be able to claim a mortgage interest credit if you were issued a mortgage credit certificate (MCC) by a state or local government. Free 2011 tax return Figure the credit on Form 8396, Mortgage Interest Credit. Free 2011 tax return If you take this credit, you must reduce your mortgage interest deduction by the amount of the credit. Free 2011 tax return   See Form 8396 and Publication 530 for more information on the mortgage interest credit. Free 2011 tax return Ministers' and military housing allowance. Free 2011 tax return   If you are a minister or a member of the uniformed services and receive a housing allowance that is not taxable, you can still deduct your home mortgage interest. Free 2011 tax return Hardest Hit Fund and Emergency Homeowners' Loan Programs. Free 2011 tax return   You can use a special method to compute your deduction for mortgage interest and real estate taxes on your main home if you meet the following two conditions. Free 2011 tax return You received assistance under: A State Housing Finance Agency (State HFA) Hardest Hit Fund program in which program payments could be used to pay mortgage interest, or An Emergency Homeowners' Loan Program administered by the Department of Housing and Urban Development (HUD) or a state. Free 2011 tax return You meet the rules to deduct all of the mortgage interest on your loan and all of the real estate taxes on your main home. Free 2011 tax return If you meet these tests, then you can deduct all of the payments you actually made during the year to your mortgage servicer, the State HFA, or HUD on the home mortgage (including the amount shown on box 3 of Form 1098–MA, Mortgage Assistance Payments), but not more than the sum of the amounts shown on Form 1098, Mortgage Interest Statement, in box 1 (mortgage interest received from payer(s) / borrower(s)), box 4 (mortgage insurance premiums), and box 5 (other information including real property taxes paid). Free 2011 tax return However, you are not required to use this special method to compute your deduction for mortgage interest and real estate taxes on your main home. Free 2011 tax return Mortgage assistance payments under section 235 of the National Housing Act. Free 2011 tax return   If you qualify for mortgage assistance payments for lower-income families under section 235 of the National Housing Act, part or all of the interest on your mortgage may be paid for you. Free 2011 tax return You cannot deduct the interest that is paid for you. Free 2011 tax return No other effect on taxes. Free 2011 tax return   Do not include these mortgage assistance payments in your income. Free 2011 tax return Also, do not use these payments to reduce other deductions, such as real estate taxes. Free 2011 tax return Divorced or separated individuals. Free 2011 tax return   If a divorce or separation agreement requires you or your spouse or former spouse to pay home mortgage interest on a home owned by both of you, the payment of interest may be alimony. Free 2011 tax return See the discussion of Payments for jointly-owned home under Alimony in Publication 504, Divorced or Separated Individuals. Free 2011 tax return Redeemable ground rents. Free 2011 tax return   In some states (such as Maryland), you can buy your home subject to a ground rent. Free 2011 tax return A ground rent is an obligation you assume to pay a fixed amount per year on the property. Free 2011 tax return Under this arrangement, you are leasing (rather than buying) the land on which your home is located. Free 2011 tax return   If you make annual or periodic rental payments on a redeemable ground rent, you can deduct them as mortgage interest. Free 2011 tax return   A ground rent is a redeemable ground rent if all of the following are true. Free 2011 tax return Your lease, including renewal periods, is for more than 15 years. Free 2011 tax return You can freely assign the lease. Free 2011 tax return You have a present or future right (under state or local law) to end the lease and buy the lessor's entire interest in the land by paying a specific amount. Free 2011 tax return The lessor's interest in the land is primarily a security interest to protect the rental payments to which he or she is entitled. Free 2011 tax return   Payments made to end the lease and to buy the lessor's entire interest in the land are not deductible as mortgage interest. Free 2011 tax return Nonredeemable ground rents. Free 2011 tax return   Payments on a nonredeemable ground rent are not mortgage interest. Free 2011 tax return You can deduct them as rent if they are a business expense or if they are for rental property. Free 2011 tax return Reverse mortgages. Free 2011 tax return   A reverse mortgage is a loan where the lender pays you (in a lump sum, a monthly advance, a line of credit, or a combination of all three) while you continue to live in your home. Free 2011 tax return With a reverse mortgage, you retain title to your home. Free 2011 tax return Depending on the plan, your reverse mortgage becomes due with interest when you move, sell your home, reach the end of a pre-selected loan period, or die. Free 2011 tax return Because reverse mortgages are considered loan advances and not income, the amount you receive is not taxable. Free 2011 tax return Any interest (including original issue discount) accrued on a reverse mortgage is not deductible until you actually pay it, which is usually when you pay off the loan in full. Free 2011 tax return Your deduction may be limited because a reverse mortgage loan generally is subject to the limit on Home Equity Debt discussed in Part II. Free 2011 tax return Rental payments. Free 2011 tax return   If you live in a house before final settlement on the purchase, any payments you make for that period are rent and not interest. Free 2011 tax return This is true even if the settlement papers call them interest. Free 2011 tax return You cannot deduct these payments as home mortgage interest. Free 2011 tax return Mortgage proceeds invested in tax-exempt securities. Free 2011 tax return   You cannot deduct the home mortgage interest on grandfathered debt or home equity debt if you used the proceeds of the mortgage to buy securities or certificates that produce tax-free income. Free 2011 tax return “Grandfathered debt” and “home equity debt” are defined in Part II of this publication. Free 2011 tax return Refunds of interest. Free 2011 tax return   If you receive a refund of interest in the same tax year you paid it, you must reduce your interest expense by the amount refunded to you. Free 2011 tax return If you receive a refund of interest you deducted in an earlier year, you generally must include the refund in income in the year you receive it. Free 2011 tax return However, you need to include it only up to the amount of the deduction that reduced your tax in the earlier year. Free 2011 tax return This is true whether the interest overcharge was refunded to you or was used to reduce the outstanding principal on your mortgage. Free 2011 tax return If you need to include the refund in income, report it on Form 1040, line 21. Free 2011 tax return   If you received a refund of interest you overpaid in an earlier year, you generally will receive a Form 1098, Mortgage Interest Statement, showing the refund in box 3. Free 2011 tax return For information about Form 1098, see Form 1098, Mortgage Interest Statement , later. Free 2011 tax return   For more information on how to treat refunds of interest deducted in earlier years, see Recoveries in Publication 525, Taxable and Nontaxable Income. Free 2011 tax return Cooperative apartment owner. Free 2011 tax return   If you own a cooperative apartment, you must reduce your home mortgage interest deduction by your share of any cash portion of a patronage dividend that the cooperative receives. Free 2011 tax return The patronage dividend is a partial refund to the cooperative housing corporation of mortgage interest it paid in a prior year. Free 2011 tax return   If you receive a Form 1098 from the cooperative housing corporation, the form should show only the amount you can deduct. Free 2011 tax return Points The term “points” is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Free 2011 tax return Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points. Free 2011 tax return This image is too large to be displayed in the current screen. Free 2011 tax return Please click the link to view the image. Free 2011 tax return Figure B. Free 2011 tax return Are My Points Fully Deductible This Year? A borrower is treated as paying any points that a home seller pays for the borrower's mortgage. Free 2011 tax return See Points paid by the seller , later. Free 2011 tax return General Rule You generally cannot deduct the full amount of points in the year paid. Free 2011 tax return Because they are prepaid interest, you generally deduct them ratably over the life (term) of the mortgage. Free 2011 tax return See Deduction Allowed Ratably , next. Free 2011 tax return For exceptions to the general rule, see Deduction Allowed in Year Paid , later. Free 2011 tax return Deduction Allowed Ratably If you do not meet the tests listed under Deduction Allowed in Year Paid , later, the loan is not a home improvement loan, or you choose not to deduct your points in full in the year paid, you can deduct the points ratably (equally) over the life of the loan if you meet all the following tests. Free 2011 tax return You use the cash method of accounting. Free 2011 tax return This means you report income in the year you receive it and deduct expenses in the year you pay them. Free 2011 tax return Most individuals use this method. Free 2011 tax return Your loan is secured by a home. Free 2011 tax return (The home does not need to be your main home. Free 2011 tax return ) Your loan period is not more than 30 years. Free 2011 tax return If your loan period is more than 10 years, the terms of your loan are the same as other loans offered in your area for the same or longer period. Free 2011 tax return Either your loan amount is $250,000 or less, or the number of points is not more than: 4, if your loan period is 15 years or less, or 6, if your loan period is more than 15 years. Free 2011 tax return Example. Free 2011 tax return You use the cash method of accounting. Free 2011 tax return In 2013, you took out a $100,000 loan payable over 20 years. Free 2011 tax return The terms of the loan are the same as for other 20-year loans offered in your area. Free 2011 tax return You paid $4,800 in points. Free 2011 tax return You made 3 monthly payments on the loan in 2013. Free 2011 tax return You can deduct $60 [($4,800 ÷ 240 months) x 3 payments] in 2013. Free 2011 tax return In 2014, if you make all twelve payments, you will be able to deduct $240 ($20 x 12). Free 2011 tax return Deduction Allowed in Year Paid You can fully deduct points in the year paid if you meet all the following tests. Free 2011 tax return (You can use Figure B as a quick guide to see whether your points are fully deductible in the year paid. Free 2011 tax return ) Your loan is secured by your main home. Free 2011 tax return (Your main home is the one you ordinarily live in most of the time. Free 2011 tax return ) Paying points is an established business practice in the area where the loan was made. Free 2011 tax return The points paid were not more than the points generally charged in that area. Free 2011 tax return You use the cash method of accounting. Free 2011 tax return This means you report income in the year you receive it and deduct expenses in the year you pay them. Free 2011 tax return Most individuals use this method. Free 2011 tax return The points were not paid in place of amounts that ordinarily are stated separately on the settlement statement, such as appraisal fees, inspection fees, title fees, attorney fees, and property taxes. Free 2011 tax return The funds you provided at or before closing, plus any points the seller paid, were at least as much as the points charged. Free 2011 tax return The funds you provided are not required to have been applied to the points. Free 2011 tax return They can include a down payment, an escrow deposit, earnest money, and other funds you paid at or before closing for any purpose. Free 2011 tax return You cannot have borrowed these funds from your lender or mortgage broker. Free 2011 tax return You use your loan to buy or build your main home. Free 2011 tax return The points were computed as a percentage of the principal amount of the mortgage. Free 2011 tax return The amount is clearly shown on the settlement statement (such as the Settlement Statement, Form HUD-1) as points charged for the mortgage. Free 2011 tax return The points may be shown as paid from either your funds or the seller's. Free 2011 tax return Note. Free 2011 tax return If you meet all of these tests, you can choose to either fully deduct the points in the year paid, or deduct them over the life of the loan. Free 2011 tax return Home improvement loan. Free 2011 tax return   You can also fully deduct in the year paid points paid on a loan to improve your main home, if tests (1) through (6) are met. Free 2011 tax return Second home. Free 2011 tax return You cannot fully deduct in the year paid points you pay on loans secured by your second home. Free 2011 tax return You can deduct these points only over the life of the loan. Free 2011 tax return Refinancing. Free 2011 tax return   Generally, points you pay to refinance a mortgage are not deductible in full in the year you pay them. Free 2011 tax return This is true even if the new mortgage is secured by your main home. Free 2011 tax return   However, if you use part of the refinanced mortgage proceeds to improve your main home and you meet the first 6 tests listed under Deduction Allowed in Year Paid , you can fully deduct the part of the points related to the improvement in the year you paid them with your own funds. Free 2011 tax return You can deduct the rest of the points over the life of the loan. Free 2011 tax return Example 1. Free 2011 tax return In 1998, Bill Fields got a mortgage to buy a home. Free 2011 tax return In 2013, Bill refinanced that mortgage with a 15-year $100,000 mortgage loan. Free 2011 tax return The mortgage is secured by his home. Free 2011 tax return To get the new loan, he had to pay three points ($3,000). Free 2011 tax return Two points ($2,000) were for prepaid interest, and one point ($1,000) was charged for services, in place of amounts that ordinarily are stated separately on the settlement statement. Free 2011 tax return Bill paid the points out of his private funds, rather than out of the proceeds of the new loan. Free 2011 tax return The payment of points is an established practice in the area, and the points charged are not more than the amount generally charged there. Free 2011 tax return Bill's first payment on the new loan was due July 1. Free 2011 tax return He made six payments on the loan in 2013 and is a cash basis taxpayer. Free 2011 tax return Bill used the funds from the new mortgage to repay his existing mortgage. Free 2011 tax return Although the new mortgage loan was for Bill's continued ownership of his main home, it was not for the purchase or improvement of that home. Free 2011 tax return He cannot deduct all of the points in 2013. Free 2011 tax return He can deduct two points ($2,000) ratably over the life of the loan. Free 2011 tax return He deducts $67 [($2,000 ÷ 180 months) × 6 payments] of the points in 2013. Free 2011 tax return The other point ($1,000) was a fee for services and is not deductible. Free 2011 tax return Example 2. Free 2011 tax return The facts are the same as in Example 1, except that Bill used $25,000 of the loan proceeds to improve his home and $75,000 to repay his existing mortgage. Free 2011 tax return Bill deducts 25% ($25,000 ÷ $100,000) of the points ($2,000) in 2013. Free 2011 tax return His deduction is $500 ($2,000 × 25%). Free 2011 tax return Bill also deducts the ratable part of the remaining $1,500 ($2,000 − $500) that must be spread over the life of the loan. Free 2011 tax return This is $50 [($1,500 ÷ 180 months) × 6 payments] in 2013. Free 2011 tax return The total amount Bill deducts in 2013 is $550 ($500 + $50). Free 2011 tax return Special Situations This section describes certain special situations that may affect your deduction of points. Free 2011 tax return Original issue discount. Free 2011 tax return   If you do not qualify to either deduct the points in the year paid or deduct them ratably over the life of the loan, or if you choose not to use either of these methods, the points reduce the issue price of the loan. Free 2011 tax return This reduction results in original issue discount, which is discussed in chapter 4 of Publication 535. Free 2011 tax return Amounts charged for services. Free 2011 tax return    Amounts charged by the lender for specific services connected to the loan are not interest. Free 2011 tax return Examples of these charges are: Appraisal fees, Notary fees, and Preparation costs for the mortgage note or deed of trust. Free 2011 tax return  You cannot deduct these amounts as points either in the year paid or over the life of the mortgage. Free 2011 tax return Points paid by the seller. Free 2011 tax return   The term “points” includes loan placement fees that the seller pays to the lender to arrange financing for the buyer. Free 2011 tax return Treatment by seller. Free 2011 tax return   The seller cannot deduct these fees as interest. Free 2011 tax return But they are a selling expense that reduces the amount realized by the seller. Free 2011 tax return See Publication 523 for information on selling your home. Free 2011 tax return Treatment by buyer. Free 2011 tax return   The buyer reduces the basis of the home by the amount of the seller-paid points and treats the points as if he or she had paid them. Free 2011 tax return If all the tests under Deduction Allowed in Year Paid , earlier, are met, the buyer can deduct the points in the year paid. Free 2011 tax return If any of those tests are not met, the buyer deducts the points over the life of the loan. Free 2011 tax return   If you need information about the basis of your home, see Publication 523 or Publication 530. Free 2011 tax return Funds provided are less than points. Free 2011 tax return   If you meet all the tests in Deduction Allowed in Year Paid , earlier, except that the funds you provided were less than the points charged to you (test (6)), you can deduct the points in the year paid, up to the amount of funds you provided. Free 2011 tax return In addition, you can deduct any points paid by the seller. Free 2011 tax return Example 1. Free 2011 tax return When you took out a $100,000 mortgage loan to buy your home in December, you were charged one point ($1,000). Free 2011 tax return You meet all the tests for deducting points in the year paid, except the only funds you provided were a $750 down payment. Free 2011 tax return Of the $1,000 charged for points, you can deduct $750 in the year paid. Free 2011 tax return You spread the remaining $250 over the life of the mortgage. Free 2011 tax return Example 2. Free 2011 tax return The facts are the same as in Example 1, except that the person who sold you your home also paid one point ($1,000) to help you get your mortgage. Free 2011 tax return In the year paid, you can deduct $1,750 ($750 of the amount you were charged plus the $1,000 paid by the seller). Free 2011 tax return You spread the remaining $250 over the life of the mortgage. Free 2011 tax return You must reduce the basis of your home by the $1,000 paid by the seller. Free 2011 tax return Excess points. Free 2011 tax return   If you meet all the tests in Deduction Allowed in Year Paid , earlier, except that the points paid were more than generally paid in your area (test (3)), you deduct in the year paid only the points that are generally charged. Free 2011 tax return You must spread any additional points over the life of the mortgage. Free 2011 tax return Mortgage ending early. Free 2011 tax return   If you spread your deduction for points over the life of the mortgage, you can deduct any remaining balance in the year the mortgage ends. Free 2011 tax return However, if you refinance the mortgage with the same lender, you cannot deduct any remaining balance of spread points. Free 2011 tax return Instead, deduct the remaining balance over the term of the new loan. Free 2011 tax return   A mortgage may end early due to a prepayment, refinancing, foreclosure, or similar event. Free 2011 tax return Example. Free 2011 tax return Dan paid $3,000 in points in 2002 that he had to spread out over the 15-year life of the mortgage. Free 2011 tax return He deducts $200 points per year. Free 2011 tax return Through 2012, Dan has deducted $2,200 of the points. Free 2011 tax return Dan prepaid his mortgage in full in 2013. Free 2011 tax return He can deduct the remaining $800 of points in 2013. Free 2011 tax return Limits on deduction. Free 2011 tax return   You cannot fully deduct points paid on a mortgage that exceeds the limits discussed in Part II . Free 2011 tax return See the Table 1 Instructions for line 10. Free 2011 tax return Form 1098. Free 2011 tax return    The mortgage interest statement you receive should show not only the total interest paid during the year, but also your deductible points paid during the year. Free 2011 tax return See Form 1098, Mortgage Interest Statement , later. Free 2011 tax return Mortgage Insurance Premiums You can treat amounts you paid during 2013 for qualified mortgage insurance as home mortgage interest. Free 2011 tax return The insurance must be in connection with home acquisition debt, and the insurance contract must have been issued after 2006. Free 2011 tax return Qualified mortgage insurance. Free 2011 tax return   Qualified mortgage insurance is mortgage insurance provided by the Department of Veterans Affairs, the Federal Housing Administration, or the Rural Housing Service, and private mortgage insurance (as defined in section 2 of the Homeowners Protection Act of 1998 as in effect on December 20, 2006). Free 2011 tax return   Mortgage insurance provided by the Department of Veterans Affairs is commonly known as a funding fee. Free 2011 tax return If provided by the Rural Housing Service, it is commonly known as a guarantee fee. Free 2011 tax return The funding fee and guarantee fee can either be included in the amount of the loan or paid in full at the time of closing. Free 2011 tax return These fees can be deducted fully in 2013 if the mortgage insurance contract was issued in 2013. Free 2011 tax return Contact the mortgage insurance issuer to determine the deductible amount if it is not reported in box 4 of Form 1098. Free 2011 tax return Special rules for prepaid mortgage insurance. Free 2011 tax return   Generally, if you paid premiums for qualified mortgage insurance that are properly allocable to periods after the close of the tax year, such premiums are treated as paid in the period to which they are allocated. Free 2011 tax return You must allocate the premiums over the shorter of the stated term of the mortgage or 84 months, beginning with the month the insurance was obtained. Free 2011 tax return No deduction is allowed for the unamortized balance if the mortgage is satisfied before its term. Free 2011 tax return This paragraph does not apply to qualified mortgage insurance provided by the Department of Veterans Affairs or the Rural Housing Service. Free 2011 tax return Example. Free 2011 tax return Ryan purchased a home in May of 2012 and financed the home with a 15-year mortgage. Free 2011 tax return Ryan also prepaid all of the $9,240 in private mortgage insurance required at the time of closing in May. Free 2011 tax return Since the $9,240 in private mortgage insurance is allocable to periods after 2012, Ryan must allocate the $9,240 over the shorter of the life of the mortgage or 84 months. Free 2011 tax return Ryan's adjusted gross income (AGI) for 2012 is $76,000. Free 2011 tax return Ryan can deduct $880 ($9,240 ÷ 84 x 8 months) for qualified mortgage insurance premiums in 2012. Free 2011 tax return For 2013, Ryan can deduct $1,320 ($9,240 ÷ 84 x 12 months) if his AGI is $100,000 or less. Free 2011 tax return In this example, the mortgage insurance premiums are allocated over 84 months, which is shorter than the life of the mortgage of 15 years (180 months). Free 2011 tax return Limit on deduction. Free 2011 tax return   If your adjusted gross income on Form 1040, line 38, is more than $100,000 ($50,000 if your filing status is married filing separately), the amount of your mortgage insurance premiums that are otherwise deductible is reduced and may be eliminated. Free 2011 tax return See Line 13 in the instructions for Schedule A (Form 1040) and complete the Mortgage Insurance Premiums Deduction Worksheet to figure the amount you can deduct. Free 2011 tax return If your adjusted gross income is more than $109,000 ($54,500 if married filing separately), you cannot deduct your mortgage insurance premiums. Free 2011 tax return Form 1098. Free 2011 tax return   The mortgage interest statement you receive should show not only the total interest paid during the year, but also your mortgage insurance premiums paid during the year, which may qualify to be treated as deductible mortgage interest. Free 2011 tax return See Form 1098, Mortgage Interest Statement, next. Free 2011 tax return Form 1098, Mortgage Interest Statement If you paid $600 or more of mortgage interest (including certain points and mortgage insurance premiums) during the year on any one mortgage, you generally will receive a Form 1098 or a similar statement from the mortgage holder. Free 2011 tax return You will receive the statement if you pay interest to a person (including a financial institution or cooperative housing corporation) in the course of that person's trade or business. Free 2011 tax return A governmental unit is a person for purposes of furnishing the statement. Free 2011 tax return The statement for each year should be sent to you by January 31 of the following year. Free 2011 tax return A copy of this form will also be sent to the IRS. Free 2011 tax return The statement will show the total interest you paid during the year, any mortgage insurance premiums you paid, and if you purchased a main home during the year, it also will show the deductible points paid during the year, including seller-paid points. Free 2011 tax return However, it should not show any interest that was paid for you by a government agency. Free 2011 tax return As a general rule, Form 1098 will include only points that you can fully deduct in the year paid. Free 2011 tax return However, certain points not included on Form 1098 also may be deductible, either in the year paid or over the life of the loan. Free 2011 tax return See the earlier discussion of Points to determine whether you can deduct points not shown on Form 1098. Free 2011 tax return Prepaid interest on Form 1098. Free 2011 tax return   If you prepaid interest in 2013 that accrued in full by January 15, 2014, this prepaid interest may be included in box 1 of Form 1098. Free 2011 tax return However, you cannot deduct the prepaid amount for January 2014 in 2013. Free 2011 tax return (See Prepaid interest , earlier. Free 2011 tax return ) You will have to figure the interest that accrued for 2014 and subtract it from the amount in box 1. Free 2011 tax return You will include the interest for January 2014 with other interest you pay for 2014. Free 2011 tax return Refunded interest. Free 2011 tax return   If you received a refund of mortgage interest you overpaid in an earlier year, you generally will receive a Form 1098 showing the refund in box 3. Free 2011 tax return See Refunds of interest , earlier. Free 2011 tax return Mortgage insurance premiums. Free 2011 tax return   The amount of mortgage insurance premiums you paid during 2013 may be shown in Box 4 of Form 1098. Free 2011 tax return See Mortgage Insurance Premiums , earlier. Free 2011 tax return How To Report Deduct the home mortgage interest and points reported to you on Form 1098 on Schedule A (Form 1040), line 10. Free 2011 tax return If you paid more deductible interest to the financial institution than the amount shown on Form 1098, show the larger deductible amount on line 10. Free 2011 tax return Attach a statement explaining the difference and print “See attached” next to line 10. Free 2011 tax return Deduct home mortgage interest that was not reported to you on Form 1098 on Schedule A (Form 1040), line 11. Free 2011 tax return If you paid home mortgage interest to the person from whom you bought your home, show that person's name, address, and taxpayer identification number (TIN) on the dotted lines next to line 11. Free 2011 tax return The seller must give you this number and you must give the seller your TIN. Free 2011 tax return A Form W-9, Request for Taxpayer Identification Number and Certification, can be used for this purpose. Free 2011 tax return Failure to meet any of these requirements may result in a $50 penalty for each failure. Free 2011 tax return The TIN can be either a social security number, an individual taxpayer identification number (issued by the Internal Revenue Service), or an employer identification number. Free 2011 tax return If you can take a deduction for points that were not reported to you on Form 1098, deduct those points on Schedule A (Form 1040), line 12. Free 2011 tax return Deduct mortgage insurance premiums on Schedule A (Form 1040), line 13. Free 2011 tax return More than one borrower. Free 2011 tax return   If you and at least one other person (other than your spouse if you file a joint return) were liable for and paid interest on a mortgage that was for your home, and the other person received a Form 1098 showing the interest that was paid during the year, attach a statement to your return explaining this. Free 2011 tax return Show how much of the interest each of you paid, and give the name and address of the person who received the form. Free 2011 tax return Deduct your share of the interest on Schedule A (Form 1040), line 11, and print “See attached” next to the line. Free 2011 tax return Also, deduct your share of any qualified mortgage insurance premiums on Schedule A (Form 1040), line 13. Free 2011 tax return   Similarly, if you are the payer of record on a mortgage on which there are other borrowers entitled to a deduction for the interest shown on the Form 1098 you received, deduct only your share of the interest on Schedule A (Form 1040), line 10. Free 2011 tax return Let each of the other borrowers know what his or her share is. Free 2011 tax return Mortgage proceeds used for business or investment. Free 2011 tax return   If your home mortgage interest deduction is limited under the rules explained in Part II , but all or part of the mortgage proceeds were used for business, investment, or other deductible activities, see Table 2 near the end of this publication. Free 2011 tax return It shows where to deduct the part of your excess interest that is for those activities. Free 2011 tax return The Table 1 Instructions for line 13 in Part II explain how to divide the excess interest among the activities for which the mortgage proceeds were used. Free 2011 tax return Special Rule for Tenant-Stockholders in Cooperative Housing Corporations A qualified home includes stock in a cooperative housing corporation owned by a tenant-stockholder. Free 2011 tax return This applies only if the tenant-stockholder is entitled to live in the house or apartment because of owning stock in the cooperative. Free 2011 tax return Cooperative housing corporation. Free 2011 tax return   This is a corporation that meets all of the following conditions. Free 2011 tax return Has only one class of stock outstanding, Has no stockholders other than those who own the stock that can live in a house, apartment, or house trailer owned or leased by the corporation, Has no stockholders who can receive any distribution out of capital other than on a liquidation of the corporation, and Meets at least one of the following requirements. Free 2011 tax return Receives at least 80% of its gross income for the year in which the mortgage interest is paid or incurred from tenant-stockholders. Free 2011 tax return For this purpose, gross income is all income received during the entire year, including amounts received before the corporation changed to cooperative ownership. Free 2011 tax return At all times during the year, at least 80% of the total square footage of the corporation's property is used or available for use by the tenant-stockholders for residential or residential-related use. Free 2011 tax return At least 90% of the corporation's expenditures paid or incurred during the year are for the acquisition, construction, management, maintenance, or care of corporate property for the benefit of the tenant-stockholders. Free 2011 tax return Stock used to secure debt. Free 2011 tax return   In some cases, you cannot use your cooperative housing stock to secure a debt because of either: Restrictions under local or state law, or Restrictions in the cooperative agreement (other than restrictions in which the main purpose is to permit the tenant- stockholder to treat unsecured debt as secured debt). Free 2011 tax return However, you can treat a debt as secured by the stock to the extent that the proceeds are used to buy the stock under the allocation of interest rules. Free 2011 tax return See chapter 4 of Publication 535 for details on these rules. Free 2011 tax return Figuring deductible home mortgage interest. Free 2011 tax return   Generally, if you are a tenant-stockholder, you can deduct payments you make for your share of the interest paid or incurred by the cooperative. Free 2011 tax return The interest must be on a debt to buy, build, change, improve, or maintain the cooperative's housing, or on a debt to buy the land. Free 2011 tax return   Figure your share of this interest by multiplying the total by the following fraction. Free 2011 tax return      Your shares of stock in the cooperative   The total shares of stock in the cooperative Limits on deduction. Free 2011 tax return   To figure how the limits discussed in Part II apply to you, treat your share of the cooperative's debt as debt incurred by you. Free 2011 tax return The cooperative should determine your share of its grandfathered debt, its home acquisition debt, and its home equity debt. Free 2011 tax return (Your share of each of these types of debt is equal to the average balance of each debt multiplied by the fraction just given. Free 2011 tax return ) After your share of the average balance of each type of debt is determined, you include it with the average balance of that type of debt secured by your stock. Free 2011 tax return Form 1098. Free 2011 tax return    The cooperative should give you a Form 1098 showing your share of the interest. Free 2011 tax return Use the rules in this publication to determine your deductible mortgage interest. Free 2011 tax return Part II. Free 2011 tax return Limits on Home Mortgage Interest Deduction This part of the publication discusses the limits on deductible home mortgage interest. Free 2011 tax return These limits apply to your home mortgage interest expense if you have a home mortgage that does not fit into any of the three categories listed at the beginning of Part I under Fully deductible interest . Free 2011 tax return Your home mortgage interest deduction is limited to the interest on the part of your home mortgage debt that is not more than your qualified loan limit. Free 2011 tax return This is the part of your home mortgage debt that is grandfathered debt or that is not more than the limits for home acquisition debt and home equity debt. Free 2011 tax return Table 1 can help you figure your qualified loan limit and your deductible home mortgage interest. Free 2011 tax return Home Acquisition Debt Home acquisition debt is a mortgage you took out after October 13, 1987, to buy, build, or substantially improve a qualified home (your main or second home). Free 2011 tax return It also must be secured by that home. Free 2011 tax return If the amount of your mortgage is more than the cost of the home plus the cost of any substantial improvements, only the debt that is not more than the cost of the home plus improvements qualifies as home acquisition debt. Free 2011 tax return The additional debt may qualify as home equity debt (discussed later). Free 2011 tax return Home acquisition debt limit. Free 2011 tax return   The total amount you can treat as home acquisition debt at any time on your main home and second home cannot be more than $1 million ($500,000 if married filing separately). Free 2011 tax return This limit is reduced (but not below zero) by the amount of your grandfathered debt (discussed later). Free 2011 tax return Debt over this limit may qualify as home equity debt (also discussed later). Free 2011 tax return Refinanced home acquisition debt. Free 2011 tax return   Any secured debt you use to refinance home acquisition debt is treated as home acquisition debt. Free 2011 tax return However, the new debt will qualify as home acquisition debt only up to the amount of the balance of the old mortgage principal just before the refinancing. Free 2011 tax return Any additional debt not used to buy, build, or substantially improve a qualified home is not home acquisition debt, but may qualify as home equity debt (discussed later). Free 2011 tax return Mortgage that qualifies later. Free 2011 tax return   A mortgage that does not qualify as home acquisition debt because it does not meet all the requirements may qualify at a later time. Free 2011 tax return For example, a debt that you use to buy your home may not qualify as home acquisition debt because it is not secured by the home. Free 2011 tax return However, if the debt is later secured by the home, it may qualify as home acquisition debt after that time. Free 2011 tax return Similarly, a debt that you use to buy property may not qualify because the property is not a qualified home. Free 2011 tax return However, if the property later becomes a qualified home, the debt may qualify after that time. Free 2011 tax return Mortgage treated as used to buy, build, or improve home. Free 2011 tax return   A mortgage secured by a qualified home may be treated as home acquisition debt, even if you do not actually use the proceeds to buy, build, or substantially improve the home. Free 2011 tax return This applies in the following situations. Free 2011 tax return You buy your home within 90 days before or after the date you take out the mortgage. Free 2011 tax return The home acquisition debt is limited to the home's cost, plus the cost of any substantial improvements within the limit described below in (2) or (3). Free 2011 tax return (See Example 1 later. Free 2011 tax return ) You build or improve your home and take out the mortgage before the work is completed. Free 2011 tax return The home acquisition debt is limited to the amount of the expenses incurred within 24 months before the date of the mortgage. Free 2011 tax return You build or improve your home and take out the mortgage within 90 days after the work is completed. Free 2011 tax return The home acquisition debt is limited to the amount of the expenses incurred within the period beginning 24 months before the work is completed and ending on the date of the mortgage. Free 2011 tax return (See Example 2 later. Free 2011 tax return ) Example 1. Free 2011 tax return You bought your main home on June 3 for $175,000. Free 2011 tax return You paid for the home with cash you got from the sale of your old home. Free 2011 tax return On July 15, you took out a mortgage of $150,000 secured by your main home. Free 2011 tax return You used the $150,000 to invest in stocks. Free 2011 tax return You can treat the mortgage as taken out to buy your home because you bought the home within 90 days before you took out the mortgage. Free 2011 tax return The entire mortgage qualifies as home acquisition debt because it was not more than the home's cost. Free 2011 tax return Example 2. Free 2011 tax return On January 31, John began building a home on the lot that he owned. Free 2011 tax return He used $45,000 of his personal funds to build the home. Free 2011 tax return The home was completed on October 31. Free 2011 tax return On November 21, John took out a $36,000 mortgage that was secured by the home. Free 2011 tax return The mortgage can be treated as used to build the home because it was taken out within 90 days after the home was completed. Free 2011 tax return The entire mortgage qualifies as home acquisition debt because it was not more than the expenses incurred within the period beginning 24 months before the home was completed. Free 2011 tax return This is illustrated by Figure C. Free 2011 tax return   Please click here for the text description of the image. Free 2011 tax return Figure C. Free 2011 tax return John's example Date of the mortgage. Free 2011 tax return   The date you take out your mortgage is the day the loan proceeds are disbursed. Free 2011 tax return This is generally the closing date. Free 2011 tax return You can treat the day you apply in writing for your mortgage as the date you take it out. Free 2011 tax return However, this applies only if you receive the loan proceeds within a reasonable time (such as within 30 days) after your application is approved. Free 2011 tax return If a timely application you make is rejected, a reasonable additional time will be allowed to make a new application. Free 2011 tax return Cost of home or improvements. Free 2011 tax return   To determine your cost, include amounts paid to acquire any interest in a qualified home or to substantially improve the home. Free 2011 tax return   The cost of building or substantially improving a qualified home includes the costs to acquire real property and building materials, fees for architects and design plans, and required building permits. Free 2011 tax return Substantial improvement. Free 2011 tax return   An improvement is substantial if it: Adds to the value of your home, Prolongs your home's useful life, or Adapts your home to new uses. Free 2011 tax return    Repairs that maintain your home in good condition, such as repainting your home, are not substantial improvements. Free 2011 tax return However, if you paint your home as part of a renovation that substantially improves your qualified home, you can include the painting costs in the cost of the improvements. Free 2011 tax return Acquiring an interest in a home because of a divorce. Free 2011 tax return   If you incur debt to acquire the interest of a spouse or former spouse in a home, because of a divorce or legal separation, you can treat that debt as home acquisition debt. Free 2011 tax return Part of home not a qualified home. Free 2011 tax return    To figure your home acquisition debt, you must divide the cost of your home and improvements between the part of your home that is a qualified home and any part that is not a qualified home. Free 2011 tax return See Divided use of your home under Qualified Home in Part I. Free 2011 tax return Home Equity Debt If you took out a loan for reasons other than to buy, build, or substantially improve your home, it may qualify as home equity debt. Free 2011 tax return In addition, debt you incurred to buy, build, or substantially improve your home, to the extent it is more than the home acquisition debt limit (discussed earlier), may qualify as home equity debt. Free 2011 tax return Home equity debt is a mortgage you took out after October 13, 1987, that: Does not qualify as home acquisition debt or as grandfathered debt, and Is secured by your qualified home. Free 2011 tax return Example. Free 2011 tax return You bought your home for cash 10 years ago. Free 2011 tax return You did not have a mortgage on your home until last year, when you took out a $50,000 loan, secured by your home, to pay for your daughter's college tuition and your father's medical bills. Free 2011 tax return This loan is home equity debt. Free 2011 tax return Home equity debt limit. Free 2011 tax return   There is a limit on the amount of debt that can be treated as home equity debt. Free 2011 tax return The total home equity debt on your main home and second home is limited to the smaller of: $100,000 ($50,000 if married filing separately), or The total of each home's fair market value (FMV) reduced (but not below zero) by the amount of its home acquisition debt and grandfathered debt. Free 2011 tax return Determine the FMV and the outstanding home acquisition and grandfathered debt for each home on the date that the last debt was secured by the home. Free 2011 tax return Example. Free 2011 tax return You own one home that you bought in 2000. Free 2011 tax return Its FMV now is $110,000, and the current balance on your original mortgage (home acquisition debt) is $95,000. Free 2011 tax return Bank M offers you a home mortgage loan of 125% of the FMV of the home less any outstanding mortgages or other liens. Free 2011 tax return To consolidate some of your other debts, you take out a $42,500 home mortgage loan [(125% × $110,000) − $95,000] with Bank M. Free 2011 tax return Your home equity debt is limited to $15,000. Free 2011 tax return This is the smaller of: $100,000, the maximum limit, or $15,000, the amount that the FMV of $110,000 exceeds the amount of home acquisition debt of $95,000. Free 2011 tax return Debt higher than limit. Free 2011 tax return   Interest on amounts over the home equity debt limit (such as the interest on $27,500 [$42,500 − $15,000] in the preceding example) generally is treated as personal interest and is not deductible. Free 2011 tax return But if the proceeds of the loan were used for investment, business, or other deductible purposes, the interest may be deductible. Free 2011 tax return If it is, see the Table 1 Instructions for line 13 for an explanation of how to allocate the excess interest. Free 2011 tax return Part of home not a qualified home. Free 2011 tax return   To figure the limit on your home equity debt, you must divide the FMV of your home between the part that is a qualified home and any part that is not a qualified home. Free 2011 tax return See Divided use of your home under Qualified Home in Part I. Free 2011 tax return Fair market value (FMV). Free 2011 tax return    This is the price at which the home would change hands between you and a buyer, neither having to sell or buy, and both having reasonable knowledge of all relevant facts. Free 2011 tax return Sales of similar homes in your area, on about the same date your last debt was secured by the home, may be helpful in figuring the FMV. Free 2011 tax return Grandfathered Debt If you took out a mortgage on your home before October 14, 1987, or you refinanced such a mortgage, it may qualify as grandfathered debt. Free 2011 tax return To qualify, it must have been secured by your qualified home on October 13, 1987, and at all times after that date. Free 2011 tax return How you used the proceeds does not matter. Free 2011 tax return Grandfathered debt is not limited. Free 2011 tax return All of the interest you paid on grandfathered debt is fully deductible home mortgage interest. Free 2011 tax return However, the amount of your grandfathered debt reduces the $1 million limit for home acquisition debt and the limit based on your home's fair market value for home equity debt. Free 2011 tax return Refinanced grandfathered debt. Free 2011 tax return   If you refinanced grandfathered debt after October 13, 1987, for an amount that was not more than the mortgage principal left on the debt, then you still treat it as grandfathered debt. Free 2011 tax return To the extent the new debt is more than that mortgage principal, it is treated as home acquisition or home equity debt, and the mortgage is a mixed-use mortgage (discussed later under Average Mortgage Balance in the Table 1 instructions). Free 2011 tax return The debt must be secured by the qualified home. Free 2011 tax return   You treat grandfathered debt that was refinanced after October 13, 1987, as grandfathered debt only for the term left on the debt that was refinanced. Free 2011 tax return After that, you treat it as home acquisition debt or home equity debt, depending on how you used the proceeds. Free 2011 tax return Exception. Free 2011 tax return   If the debt before refinancing was like a balloon note (the principal on the debt was not amortized over the term of the debt), then you treat the refinanced debt as grandfathered debt for the term of the first refinancing. Free 2011 tax return This term cannot be more than 30 years. Free 2011 tax return Example. Free 2011 tax return Chester took out a $200,000 first mortgage on his home in 1986. Free 2011 tax return The mortgage was a five-year balloon note and the entire balance on the note was due in 1991. Free 2011 tax return Chester refinanced the debt in 1991 with a new 20-year mortgage. Free 2011 tax return The refinanced debt is treated as grandfathered debt for its entire term (20 years). Free 2011 tax return Line-of-credit mortgage. Free 2011 tax return    If you had a line-of-credit mortgage on October 13, 1987, and borrowed additional amounts against it after that date, then the additional amounts are either home acquisition debt or home equity debt depending on how you used the proceeds. Free 2011 tax return The balance on the mortgage before you borrowed the additional amounts is grandfathered debt. Free 2011 tax return The newly borrowed amounts are not grandfathered debt because the funds were borrowed after October 13, 1987. Free 2011 tax return See Average Mortgage Balance in the Table 1 Instructions that follow. Free 2011 tax return Table 1 Instructions Unless you are subject to the overall limit on itemized deductions, you can deduct all of the interest you paid during the year on mortgages secured by your main home or second home in either of the following two situations. Free 2011 tax return All the mortgages are grandfathered debt. Free 2011 tax return The total of the mortgage balances for the entire year is within the limits discussed earlier under Home Acquisition Debt and Home Equity Debt . Free 2011 tax return In either of those cases, you do not need Table 1. Free 2011 tax return Otherwise, you can use Table 1 to determine your qualified loan limit and deductible home mortgage interest. Free 2011 tax return Fill out only one Table 1 for both your main and second home regardless of how many mortgages you have. Free 2011 tax return Table 1. Free 2011 tax return Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Free 2011 tax return Part I Qualified Loan Limit 1. Free 2011 tax return Enter the average balance of all your grandfathered debt. Free 2011 tax return See line 1 instructions 1. Free 2011 tax return   2. Free 2011 tax return Enter the average balance of all your home acquisition debt. Free 2011 tax return See line 2 instructions 2. Free 2011 tax return   3. Free 2011 tax return Enter $1,000,000 ($500,000 if married filing separately) 3. Free 2011 tax return   4. Free 2011 tax return Enter the larger of the amount on line 1 or the amount on line 3 4. Free 2011 tax return   5. Free 2011 tax return Add the amounts on lines 1 and 2. Free 2011 tax return Enter the total here 5. Free 2011 tax return   6. Free 2011 tax return Enter the smaller of the amount on line 4 or the amount on line 5 6. Free 2011 tax return   7. Free 2011 tax return If you have home equity debt, enter the smaller of $100,000 ($50,000 if married filing separately) or your limited amount. Free 2011 tax return See the line 7 instructions for the limit which may apply to you. Free 2011 tax return 7. Free 2011 tax return   8. Free 2011 tax return Add the amounts on lines 6 and 7. Free 2011 tax return Enter the total. Free 2011 tax return This is your qualified loan limit. Free 2011 tax return 8. Free 2011 tax return   Part II Deductible Home Mortgage Interest 9. Free 2011 tax return Enter the total of the average balances of all mortgages on all qualified homes. Free 2011 tax return  See line 9 instructions 9. Free 2011 tax return     If line 8 is less than line 9, go on to line 10. Free 2011 tax return If line 8 is equal to or more than line 9, stop here. Free 2011 tax return All of your interest on all the mortgages included on line 9 is deductible as home mortgage interest on Schedule A (Form 1040). Free 2011 tax return     10. Free 2011 tax return Enter the total amount of interest that you paid. Free 2011 tax return See line 10 instructions 10. Free 2011 tax return   11. Free 2011 tax return Divide the amount on line 8 by the amount on line 9. Free 2011 tax return Enter the result as a decimal amount (rounded to three places) 11. Free 2011 tax return × . Free 2011 tax return 12. Free 2011 tax return Multiply the amount on line 10 by the decimal amount on line 11. Free 2011 tax return Enter the result. Free 2011 tax return This is your deductible home mortgage interest. Free 2011 tax return Enter this amount on Schedule A (Form 1040) 12. Free 2011 tax return   13. Free 2011 tax return Subtract the amount on line 12 from the amount on line 10. Free 2011 tax return Enter the result. Free 2011 tax return This is not home mortgage interest. Free 2011 tax return See line 13 instructions 13. Free 2011 tax return   Home equity debt only. Free 2011 tax return   If all of your mortgages are home equity debt, do not fill in lines 1 through 5. Free 2011 tax return Enter zero on line 6 and complete the rest of Table 1. Free 2011 tax return Average Mortgage Balance You have to figure the average balance of each mortgage to determine your qualified loan limit. Free 2011 tax return You need these amounts to complete lines 1, 2, and 9 of Table 1. Free 2011 tax return You can use the highest mortgage balances during the year, but you may benefit most by using the average balances. Free 2011 tax return The following are methods you can use to figure your average mortgage balances. Free 2011 tax return However, if a mortgage has more than one category of debt, see Mixed-use mortgages , later, in this section. Free 2011 tax return Average of first and last balance method. Free 2011 tax return   You can use this method if all the following apply. Free 2011 tax return You did not borrow any new amounts on the mortgage during the year. Free 2011 tax return (This does not include borrowing the original mortgage amount. Free 2011 tax return ) You did not prepay more than one month's principal during the year. Free 2011 tax return (This includes prepayment by refinancing your home or by applying proceeds from its sale. Free 2011 tax return ) You had to make level payments at fixed equal intervals on at least a semi-annual basis. Free 2011 tax return You treat your payments as level even if they were adjusted from time to time because of changes in the interest rate. Free 2011 tax return    To figure your average balance, complete the following worksheet. Free 2011 tax return    1. Free 2011 tax return Enter the balance as of the first day of the year that the mortgage was secured by your qualified home during the year (generally January 1)   2. Free 2011 tax return Enter the balance as of the last day of the year that the mortgage was secured by your qualified home during the year (generally December 31)   3. Free 2011 tax return Add amounts on lines 1 and 2   4. Free 2011 tax return Divide the amount on line 3 by 2. Free 2011 tax return Enter the result   Interest paid divided by interest rate method. Free 2011 tax return   You can use this method if at all times in 2013 the mortgage was secured by your qualified home and the interest was paid at least monthly. Free 2011 tax return    Complete the following worksheet to figure your average balance. Free 2011 tax return    1. Free 2011 tax return Enter the interest paid in 2013. Free 2011 tax return Do not include points, mortgage insurance premiums, or any interest paid in 2013 that is for a year after 2013. Free 2011 tax return However, do include interest that is for 2013 but was paid in an earlier year   2. Free 2011 tax return Enter the annual interest rate on the mortgage. Free 2011 tax return If the interest rate varied in 2013, use the lowest rate for the year   3. Free 2011 tax return Divide the amount on line 1 by the amount on line 2. Free 2011 tax return Enter the result   Example. Free 2011 tax return Mr. Free 2011 tax return Blue had a line of credit secured by his main home all year. Free 2011 tax return He paid interest of $2,500 on this loan. Free 2011 tax return The interest rate on the loan was 9% (. Free 2011 tax return 09) all year. Free 2011 tax return His average balance using this method is $27,778, figured as follows. Free 2011 tax return 1. Free 2011 tax return Enter the interest paid in 2013. Free 2011 tax return Do not include points, mortgage insurance premiums, or any interest paid in 2013 that is for a year after 2013. Free 2011 tax return However, do include interest that is for 2013 but was paid in an earlier year $2,500 2. Free 2011 tax return Enter the annual interest rate on the mortgage. Free 2011 tax return If the interest rate varied in 2013, use the lowest rate for the year . Free 2011 tax return 09 3. Free 2011 tax return Divide the amount on line 1 by the amount on line 2. Free 2011 tax return Enter the result $27,778 Statements provided by your lender. Free 2011 tax return   If you receive monthly statements showing the closing balance or the average balance for the month, you can use either to figure your average balance for the year. Free 2011 tax return You can treat the balance as zero for any month the mortgage was not secured by your qualified home. Free 2011 tax return   For each mortgage, figure your average balance by adding your monthly closing or average balances and dividing that total by the number of months the home secured by that mortgage was a qualified home during the year. Free 2011 tax return   If your lender can give you your average balance for the year, you can use that amount. Free 2011 tax return Example. Free 2011 tax return Ms. Free 2011 tax return Brown had a home equity loan secured by her main home all year. Free 2011 tax return She received monthly statements showing her average balance for each month. Free 2011 tax return She can figure her average balance for the year by adding her monthly average balances and dividing the total by 12. Free 2011 tax return Mixed-use mortgages. Free 2011 tax return   A mixed-use mortgage is a loan that consists of more than one of the three categories of debt (grandfathered debt, home acquisition debt, and home equity debt). Free 2011 tax return For example, a mortgage you took out during the year is a mixed-use mortgage if you used its proceeds partly to refinance a mortgage that you took out in an earlier year to buy your home (home acquisition debt) and partly to buy a car (home equity debt). Free 2011 tax return   Complete lines 1 and 2 of Table 1 by including the separate average balances of any grandfathered debt and home acquisition debt in your mixed-use mortgage. Free 2011 tax return Do not use the methods described earlier in this section to figure the average balance of either category. Free 2011 tax return Instead, for each category, use the following method. Free 2011 tax return Figure the balance of that category of debt for each month. Free 2011 tax return This is the amount of the loan proceeds allocated to that category, reduced by your principal payments on the mortgage previously applied to that category. Free 2011 tax return Principal payments on a mixed-use mortgage are applied in full to each category of debt, until its balance is zero, in the following order: First, any home equity debt, Next, any grandfathered debt, and Finally, any home acquisition debt. Free 2011 tax return Add together the monthly balances figured in (1). Free 2011 tax return Divide the result in (2) by 12. Free 2011 tax return   Complete line 9 of Table 1 by including the average balance of the entire mixed-use mortgage, figured under one of the methods described earlier in this section. Free 2011 tax return Example 1. Free 2011 tax return In 1986, Sharon took out a $1,400,000 mortgage to buy her main home (grandfathered debt). Free 2011 tax return On March 2, 2013, when the home had a fair market value of $1,700,000 and she owed $1,100,000 on the mortgage, Sharon took out a second mortgage for $200,000. Free 2011 tax return She used $180,000 of the proceeds to make substantial improvements to her home (home acquisition debt) and the remaining $20,000 to buy a car (home equity debt). Free 2011 tax return Under the loan agreement, Sharon must make principal payments of $1,000 at the end of each month. Free 2011 tax return During 2013, her principal payments on the second mortgage totaled $10,000. Free 2011 tax return To complete Table 1, line 2, Sharon must figure a separate average balance for the part of her second mortgage that is home acquisition debt. Free 2011 tax return The January and February balances were zero. Free 2011 tax return The March through December balances were all $180,000, because none of her principal payments are applied to the home acquisition debt. Free 2011 tax return (They are all applied to the home equity debt, reducing it to $10,000 [$20,000 − $10,000]. Free 2011 tax return ) The monthly balances of the home acquisition debt total $1,800,000 ($180,000 × 10). Free 2011 tax return Therefore, the average balance of the home acquisition debt for 2013 was $150,000 ($1,800,000 ÷ 12). Free 2011 tax return Example 2. Free 2011 tax return The facts are the same as in Example 1. Free 2011 tax return In 2014, Sharon's January through October principal payments on her second mortgage are applied to the home equity debt, reducing it to zero. Free 2011 tax return The balance of the home acquisition debt remains $180,000 for each of those months. Free 2011 tax return Because her November and December principal payments are applied to the home acquisition debt, the November balance is $179,000 ($180,000 − $1,000) and the December balance is $178,000 ($180,000 − $2,000). Free 2011 tax return The monthly balances total $2,157,000 [($180,000 × 10) + $179,000 + $178,000]. Free 2011 tax return Therefore, the average balance of the home acquisition debt for 2014 is $179,750 ($2,157,000 ÷ 12). Free 2011 tax return L
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Managing Household Records

When was the last time you couldn't find an important paper you knew you had carefully put away? How do people decide where to store and keep such records? And how do they know what to keep, what to throw away, and when? Do you have a simple system or roadmap for important papers (PDF |download Adobe Reader) to which you or a loved one can refer to in case of an emergency?

Every household must work out its own records management system, but some general guidelines can help. A good system will provide an overview of what happens to property after a major life event occurs.

Active File

First, gather your important papers and important documents from throughout your home. Put these documents into three piles: an active file, dead storage, and items to discard or shred. The active file should include documents and financial records you deal with on a regular basis and need to refer to. Keep these readily accessible at home:

  • Appliance manuals, warranties and service contracts
  • Bank statements
  • Bill payment receipts
  • Bills awaiting payment
  • Credit card information
  • Education records, diploma, transcripts, etc.
  • Employment records
  • Family health records, including vaccination histories
  • Health benefit information
  • Household inventory
  • Income tax working papers
  • Insurance policies
  • Loan statements and payment books
  • Password list
  • Receipts for items under warranty
  • Safe deposit box inventory (and key)
  • Tax receipts, such as those received for charitable deductions


Dead Storage

All active file papers over 3-years-old are considered dead storage. This may not necessarily apply to everything—for example, appliance manuals that you use frequently should stay in the active file.

Items to Discard

  • Cancelled checks for cash or nondeductible expenses
  • Expired warranties
  • Pay stubs, after reconciling with W-2
  • Other records no longer needed, such as those that were replaced by newer versions, manuals of appliances that you've replaced, etc.
How Long to Keep Documents
Document How Long to Keep It
Bank statements 1 year, unless needed to support tax filings
Birth certificates, marriage licenses, divorce decrees, passports, education records, military service records Forever
Contracts Until updated
Credit card records Until paid, unless needed to support tax filings
Home purchase and improvement records As long as you own the property
Household inventory Forever; update as needed
Insurance, life Forever
Insurance, car, home, etc. Until you renew the policy
Investment statements Shred your monthly statements; keep annual statements until you sell the investments
Investment certificates Until you cash or sell the item
Loan documents Until you sell the item the loan was for
Real estate deeds As long as you own the property
Receipts for large purchases Until you sell or discard the item
Service contracts and warranties Until you sell or discard the item
Social Security card Forever
Social Security statement When you get your new statement online, shred the old one
Tax records 7 years from the filing date
Vehicle titles Until you sell or dispose of the car
Will Until updated

Create Your Filing System

Generally, your home file should include all the items you refer to frequently including bills, warranties, bank statements, etc. You’ll also need a secondary storage location for your more important, difficult to replace papers, such as passports, vehicle titles, birth certificates, etc. A fireproof/waterproof safe may be one possibility, but it's better to store those records in a location away from home, such as a bank safe deposit box.

Organize your home filing system (PDF | download Adobe Reader) in a way that you can understand and manage. Choose one member of your household as file manager who will take responsibility for keeping the filing up-to-date and consistent. However, in case of an emergency, everyone in the household needs to be familiar with the system, including children old enough to understand how to use it. Develop and stick to a regular filing and paperwork schedule to avoid having to deal with backlogged papers. A few minutes once or twice a week should be sufficient.

Consider scanning and storing some documents electronically since it's best to save your important documents and files in a way that can easily be carried away and accessed later. Scanning will give you easy access to your documents and allow you to transfer them via e-mail and easily make back-up copies. Investing in an external hard drive for your computer and regularly backing up important documents will allow you to carry away the external hard drive at a moment's notice.

If you don’t have the time or the desire to take these steps, or have realized that the task is too much to handle, consider asking a friend or family member to help you focus and give a fresh perspective. Or, you may want to consider hiring a professional organizer to provide structure, solutions, and systems, and help you gain a sense of control.

Safe Deposit Box

Once you have organized your documents, you’ll want to consider getting an off-site storage location, such as a safe deposit box. Use the safe deposit box for originals, but remember, you'll still need copies at home if something tragic should happen to you and your safe deposit box gets sealed. Always seal documents stored in a safe deposit box in airtight waterproof containers (like Ziploc bags) to ensure they don’t get damaged. If you'd rather keep your records at home, then get a fireproof/waterproof safe. A good rule of thumb is: Put documents in the box if you can't easily replace them or if you don't know what might happen if you don't have them.

If applicable, you should have official or certified copies of documents for your safe deposit box. "Official" means an original copy with all required signatures. Select documents, such as birth certificates, must also be certified or notarized to be considered valid. You can get most government records for free or at low cost from a government office or online at a government agency's website. If you are unsure whether you need a certified copy, or want more information about which local government office can give you originals of these documents, contact your local consumer protection office. Consult your attorney before you put an original copy of your will in a safe deposit box—some states don’t permit access after a person dies.

If you need to obtain documents regarding birth, death, marriage, or divorce, check out Where to Write for Vital Records for guidance. Be wary of companies that offer to sell you copies of official papers; you should check with the appropriate government agency to see if they will provide the same information free or at a lower price.

Consider keeping copies of the following documents in a safe deposit box or locked in a fireproof/waterproof safe in your home:

  • Adoption papers
  • Advance directives*
  • Birth and death certificates
  • Citizenship papers
  • Contracts of importance
  • Deeds and property titles
  • Household inventory
  • Life insurance policies
  • Marriage licenses and divorce decrees
  • Military discharge papers
  • Passports
  • Powers of attorney*
  • Social Security cards
  • Stock and bond certificates
  • Wills*

*Since the safe deposit box will be sealed at your death, keep a copy of your will somewhere accessible. The same goes for the advance directive and powers of attorney since you may not be able to give others access to the safe deposit box.

Grab and Go Kit for Emergencies

Disasters like floods, fires, earthquakes, and tornadoes strike without warning and can affect anyone. Your number one priority in these situations is making sure your family is safe—not finding your most recent copies of insurance policies or bank statements. An easy-to-grab emergency financial records kit (PDF | download Adobe Reader) will make sure you have access to important documents in case the unexpected happens to you.

What Documents Should You Have Ready?

Store the documents in an accordion file and keep it in your emergency supply kit so that everything you need is together. Items you should put in the kit include originals or copies of:

  • Birth and marriage certificates, divorce decrees
  • Social Security cards of household members
  • Driver's license and other wallet cards
  • Will and/or trust documents; powers of attorney
  • Recent income tax return
  • Passports and/or other identity documents
  • Military discharge papers
  • A list of your prescriptions: name of medication, dosage, pharmacy

Other important papers include:

  • Contacts for family members, employer, financial advisors, attorney, accountant, and banker
  • Insurance policy information
  • Bank, credit union, and credit card account list
  • Summary of personal, financial, property, and other vital information

Other items to consider including:

  • Safe deposit box keys and/or safe combination
  • Computer user names and passwords; CD with relevant personal, financial, legal files
  • Some emergency cash

Remember that these documents contain personal information like social security numbers and bank account information that could be used against you if it fell into the wrong hands. Be sure your emergency financial records kit is stored in a secure location in your home so it is easy for you to carry away in a disaster not for a thief to carry away in a robbery.

The Free 2011 Tax Return

Free 2011 tax return Publication 509 - Main Content Table of Contents General Tax CalendarFirst Quarter Second Quarter Third Quarter Fourth Quarter Fiscal-Year Taxpayers Employer's Tax CalendarFirst Quarter Second Quarter Third Quarter Fourth Quarter Excise Tax CalendarFirst Quarter Second Quarter Third Quarter Fourth Quarter How To Get Tax Help General Tax Calendar This tax calendar has the due dates for 2014 that most taxpayers will need. Free 2011 tax return Employers and persons who pay excise taxes also should use the Employer's Tax Calendar and the Excise Tax Calendar . Free 2011 tax return Fiscal-year taxpayers. Free 2011 tax return   If you file your income tax return for a fiscal year rather than the calendar year, you must change some of the dates in this calendar. Free 2011 tax return These changes are described under Fiscal-Year Taxpayers at the end of this calendar. Free 2011 tax return First Quarter The first quarter of a calendar year is made up of January, February, and March. Free 2011 tax return Second Quarter The second quarter of a calendar year is made up of April, May, and June. Free 2011 tax return Third Quarter The third quarter of a calendar year is made up of July, August, and September. Free 2011 tax return Fourth Quarter The fourth quarter of a calendar year is made up of October, November, and December. Free 2011 tax return Fiscal-Year Taxpayers If you use a fiscal year (rather than the calendar year) as your tax year, you should change some of the dates in this calendar. Free 2011 tax return Use the following general guidelines to make these changes. Free 2011 tax return The 3 months that make up each quarter of a fiscal year may be different from those of each calendar quarter, depending on when the fiscal year begins. Free 2011 tax return Also see Saturday, Sunday, or legal holiday, earlier. Free 2011 tax return Individuals Form 1040. Free 2011 tax return    This form is due on the 15th day of the 4th month after the end of your tax year. Free 2011 tax return Form 4868 is used to request an extension of time to file Form 1040. Free 2011 tax return Estimated tax payments (Form 1040-ES). Free 2011 tax return   Payments are due on the 15th day of the 4th, 6th, and 9th months of your tax year and on the 15th day of the 1st month after your tax year ends. Free 2011 tax return Partnerships Form 1065. Free 2011 tax return   This form is due on the 15th day of the 4th month after the end of the partnership's tax year. Free 2011 tax return Provide each partner with a copy of Schedule K-1 (Form 1065) or a substitute Schedule K-1. Free 2011 tax return Form 1065-B (electing large partnerships). Free 2011 tax return   This form is due on the 15th day of the 4th month after the end of the partnership's tax year. Free 2011 tax return Provide each partner with a copy of Schedule K-1 (Form 1065-B) or a substitute Schedule K-1 by the first March 15 following the close of the partnership's tax year. Free 2011 tax return Corporations and S Corporations Form 1120 and Form 1120S (or Form 7004). Free 2011 tax return   These forms are due on the 15th day of the 3rd month after the end of the corporation's tax year. Free 2011 tax return S corporations must provide each shareholder with a copy of Schedule K-1 (Form 1120S) or a substitute Schedule K-1. Free 2011 tax return Form 7004 is used to request an extension of time to file Form 1120 or Form 1120S. Free 2011 tax return Estimated tax payments. Free 2011 tax return   Payments are due on the 15th day of the 4th, 6th, 9th, and 12th months of the corporation's tax year. Free 2011 tax return Form 2553. Free 2011 tax return   This form is used to choose S corporation treatment. Free 2011 tax return It is due no more than two months and 15 days after the beginning of the tax year the election is to take effect or at any time during the preceding tax year. Free 2011 tax return Employer's Tax Calendar This tax calendar covers various due dates of interest to employers. Free 2011 tax return Principally, it covers the following federal taxes. Free 2011 tax return Income tax you withhold from your employees' wages or from nonpayroll amounts you pay out. Free 2011 tax return Social security and Medicare taxes (FICA taxes) you withhold from your employees' wages and the social security and Medicare taxes you must pay as an employer. Free 2011 tax return Federal unemployment (FUTA) tax you must pay as an employer. Free 2011 tax return The calendar lists due dates for filing returns and for making deposits of these three taxes throughout the year. Free 2011 tax return Use this calendar with Publication 15 (Circular E), which gives the deposit rules. Free 2011 tax return Forms you may need. Free 2011 tax return   The following is a list and description of the primary employment tax forms you may need. Free 2011 tax return Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Free 2011 tax return This form is due the last day of the first calendar month after the calendar year ends. Free 2011 tax return Use it to report the FUTA tax on wages you paid. Free 2011 tax return Form 941, Employer's QUARTERLY Federal Tax Return. Free 2011 tax return This form is due the last day of the first calendar month after the calendar quarter ends. Free 2011 tax return Use it to report social security and Medicare taxes and withheld income taxes on wages if your employees are not farm workers or household employees. Free 2011 tax return Form 943, Employer's Annual Federal Tax Return for Agricultural Employees. Free 2011 tax return This form is due the last day of the first calendar month after the calendar year ends. Free 2011 tax return Use it to report social security and Medicare taxes and withheld income taxes on wages if your employees are farm workers. Free 2011 tax return Form 944, Employer's ANNUAL Federal Tax Return. Free 2011 tax return This form is due the last day of the first calendar month after the calendar year ends. Free 2011 tax return Certain small employers use it instead of Form 941 to report social security and Medicare taxes and withheld income tax. Free 2011 tax return Form 945, Annual Return of Withheld Federal Income Tax. Free 2011 tax return This form is due the last day of the first calendar month after the calendar year ends. Free 2011 tax return Use it to report income tax withheld on all nonpayroll items. Free 2011 tax return Nonpayroll items include the following. Free 2011 tax return Backup withholding. Free 2011 tax return Withholding on pensions, annuities, IRAs, and gambling winnings. Free 2011 tax return Payments of Indian gaming profits to tribal members. Free 2011 tax return Fiscal-year taxpayers. Free 2011 tax return   The dates in this calendar apply whether you use a fiscal year or the calendar year as your tax year. Free 2011 tax return The only exception is the date for filing Forms 5500, Annual Return/Report of Employee Benefit Plan, and 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan. Free 2011 tax return These employee benefit plan forms are due by the last day of the seventh month after the plan year ends. Free 2011 tax return See July 31 , later. Free 2011 tax return Extended due dates. Free 2011 tax return   If you timely deposit in full the tax you are required to report on Form 940, 941, 943, 944, or 945, you have an additional 10 calendar days to file that form. Free 2011 tax return If you are subject to the semiweekly deposit rule, use Table 2 near the end of this publication for your deposit due dates. Free 2011 tax return However, if you accumulate $100,000 or more of taxes on any day during a deposit period, you must deposit the tax by the next business day instead of the date shown in Table 2. Free 2011 tax return First Quarter The first quarter of a calendar year is made up of January, February, and March. Free 2011 tax return Second Quarter The second quarter of a calendar year is made up of April, May, and June. Free 2011 tax return Third Quarter The third quarter of a calendar year is made up of July, August, and September. Free 2011 tax return Fourth Quarter The fourth quarter of a calendar year is made up of October, November, and December. Free 2011 tax return Excise Tax Calendar This tax calendar gives the due dates for filing returns and making deposits of excise taxes. Free 2011 tax return Use this calendar with Publication 510. Free 2011 tax return Also see the instructions for Forms 11-C, 720, 730, and 2290 for more information. Free 2011 tax return References to Form 2290 also apply to Form 2290(SP). Free 2011 tax return Forms you may need. Free 2011 tax return   The following is a list and description of the excise tax forms you may need. Free 2011 tax return Form 11-C, Occupational Tax and Registration Return for Wagering. Free 2011 tax return Use this form to register any wagering activity and to pay an occupational tax on wagering. Free 2011 tax return File Form 11-C if you are in the business of accepting wagers, including conducting a wagering pool or lottery, or are an agent of someone who accepts wagers. Free 2011 tax return You must file the form before you begin accepting wagers. Free 2011 tax return After that, file the form by July 1 of each year. Free 2011 tax return Also, see Form 730, later. Free 2011 tax return Form 720, Quarterly Federal Excise Tax Return. Free 2011 tax return File this form by the last day of the month following the calendar quarter. Free 2011 tax return Use this form to report a wide variety of excise taxes, including: Communications and air transportation taxes, Fuel taxes, Retail tax, Ship passenger tax, and Manufacturers taxes. Free 2011 tax return Form 730, Monthly Tax Return for Wagers. Free 2011 tax return Use this form to pay an excise tax on wagers you accept. Free 2011 tax return File this form for each month by the last day of the following month. Free 2011 tax return Also, see Form 11-C, earlier. Free 2011 tax return Form 2290, Heavy Highway Vehicle Use Tax Return. Free 2011 tax return Use this form to pay the federal use tax on heavy highway vehicles registered in your name. Free 2011 tax return File this form by the last day of the month following the month of the vehicle's first taxable use in the tax period. Free 2011 tax return The tax period begins on July 1 and ends the following June 30. Free 2011 tax return You must pay the full year's tax on all vehicles you have in use during the month of July. Free 2011 tax return You must also pay a partial-year tax on taxable vehicles that you put into use in a month after July. Free 2011 tax return For more information, see the Instructions for Form 2290. Free 2011 tax return Fiscal-year taxpayers. Free 2011 tax return   The dates in this calendar apply whether you use a fiscal year or the calendar year as your tax year. Free 2011 tax return Adjustments for Saturday, Sunday, or legal holidays. Free 2011 tax return   Generally, if a due date falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next day that is not a Saturday, Sunday, or legal holiday. Free 2011 tax return For excise taxes, there are two exceptions to this rule. Free 2011 tax return For deposits of regular method taxes, if the due date is a Saturday, Sunday, or legal holiday, the due date is the immediately preceding day that is not a Saturday, Sunday, or legal holiday. Free 2011 tax return Under the special September deposit rules, if the due date falls on a Saturday, the deposit is due on the preceding Friday. Free 2011 tax return If the due date falls on a Sunday, the deposit is due on the following Monday. Free 2011 tax return For more information, see the Instructions for Form 720. Free 2011 tax return The Excise Tax Calendar has been adjusted for all of these provisions. Free 2011 tax return Regular method taxes. Free 2011 tax return   These are taxes, other than alternative method taxes used for communication and air transportation taxes, reported on Form 720 for which deposits are required. Free 2011 tax return First Quarter The first quarter of a calendar year is made up of January, February, and March. Free 2011 tax return Second Quarter The second quarter of a calendar year is made up of April, May, and June. Free 2011 tax return Third Quarter The third quarter of a calendar year is made up of July, August, and September. Free 2011 tax return Fourth Quarter The fourth quarter of a calendar year is made up of October, November, and December. Free 2011 tax return How To Get Tax Help Go online, use a smart phone, call or walk in to an office near you. Free 2011 tax return Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. Free 2011 tax return Free help with your tax return. Free 2011 tax return   Free help in preparing your return is available nationwide from IRS-certified volunteers. Free 2011 tax return The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. Free 2011 tax return The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Free 2011 tax return Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Free 2011 tax return Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. Free 2011 tax return To find the nearest VITA or TCE site, visit IRS. Free 2011 tax return gov or call 1-800-906-9887. Free 2011 tax return   As part of the TCE program, AARP offers the Tax-Aide counseling program. Free 2011 tax return To find the nearest AARP Tax-Aide site, visit AARP's website at www. Free 2011 tax return aarp. Free 2011 tax return org/money/taxaide or call 1-888-227-7669. Free 2011 tax return   For more information on these programs, go to IRS. Free 2011 tax return gov and enter “VITA” in the search box. Free 2011 tax return Internet. Free 2011 tax return IRS. Free 2011 tax return gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. Free 2011 tax return Apply for an Employer Identification Number (EIN). Free 2011 tax return Go to IRS. Free 2011 tax return gov and enter Apply for an EIN in the search box. Free 2011 tax return Request an Electronic Filing PIN by going to IRS. Free 2011 tax return gov and entering Electronic Filing PIN in the search box. Free 2011 tax return Check the status of your 2013 refund with Where's My Refund? Go to IRS. Free 2011 tax return gov or the IRS2Go app, and click on Where's My Refund? You'll get a personalized refund date as soon as the IRS processes your tax return and approves your refund. Free 2011 tax return If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. 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Free 2011 tax return Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Free 2011 tax return gov. Free 2011 tax return Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. Free 2011 tax return gov or IRS2Go. Free 2011 tax return Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. Free 2011 tax return An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. Free 2011 tax return Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. Free 2011 tax return If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. Free 2011 tax return Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Free 2011 tax return Locate the nearest volunteer help site with the VITA Locator Tool on IRS. Free 2011 tax return gov. Free 2011 tax return Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Free 2011 tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. Free 2011 tax return Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. Free 2011 tax return AARP offers the Tax-Aide counseling program as part of the TCE program. Free 2011 tax return Visit AARP's website to find the nearest Tax-Aide location. Free 2011 tax return Research your tax questions. Free 2011 tax return Search publications and instructions by topic or keyword. Free 2011 tax return Read the Internal Revenue Code, regulations, or other official guidance. Free 2011 tax return Read Internal Revenue Bulletins. Free 2011 tax return Sign up to receive local and national tax news by email. Free 2011 tax return Phone. Free 2011 tax return You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Free 2011 tax return Download the free IRS2Go mobile app from the iTunes app store or from Google Play. Free 2011 tax return Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Free 2011 tax return Call to locate the nearest volunteer help site, 1-800-906-9887. Free 2011 tax return Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Free 2011 tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. Free 2011 tax return Most VITA and TCE sites offer free electronic filing. Free 2011 tax return Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Free 2011 tax return Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Free 2011 tax return Call to check the status of your 2013 refund, 1-800-829-1954 or 1-800-829-4477. Free 2011 tax return The automated Where's My Refund? information is available 24 hours a day, 7 days a week. Free 2011 tax return If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Free 2011 tax return Before you call, have your 2013 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Free 2011 tax return Where's My Refund? can give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Free 2011 tax return Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. Free 2011 tax return Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Free 2011 tax return Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). Free 2011 tax return You should receive your order within 10 business days. Free 2011 tax return Call to order transcripts of your tax returns or tax account, 1-800-908-9946. Free 2011 tax return Follow the prompts to provide your Social Security Number or Individual Taxpayer Identification Number, date of birth, street address and ZIP code. Free 2011 tax return Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. Free 2011 tax return Call to ask tax questions, 1-800-829-1040. Free 2011 tax return Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Free 2011 tax return The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Free 2011 tax return These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. Free 2011 tax return gsa. Free 2011 tax return gov/fedrelay. Free 2011 tax return Walk-in. Free 2011 tax return You can find a selection of forms, publications and services — in-person, face-to-face. Free 2011 tax return Products. Free 2011 tax return You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Free 2011 tax return Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Free 2011 tax return Services. Free 2011 tax return You can walk in to your local TAC most business days for personal, face-to-face tax help. Free 2011 tax return An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Free 2011 tax return If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. Free 2011 tax return No appointment is necessary—just walk in. Free 2011 tax return Before visiting, check www. Free 2011 tax return irs. Free 2011 tax return gov/localcontacts for hours of operation and services provided. Free 2011 tax return Mail. Free 2011 tax return You can send your order for forms, instructions, and publications to the address below. Free 2011 tax return You should receive a response within 10 business days after your request is received. Free 2011 tax return  Internal Revenue Service 1201 N. Free 2011 tax return Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. Free 2011 tax return   The Taxpayer Advocate Service (TAS) is your voice at the IRS. Free 2011 tax return Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Free 2011 tax return What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. Free 2011 tax return We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Free 2011 tax return You face (or your business is facing) an immediate threat of adverse action. Free 2011 tax return You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Free 2011 tax return   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Free 2011 tax return Here's why we can help: TAS is an independent organization within the IRS. Free 2011 tax return Our advocates know how to work with the IRS. Free 2011 tax return Our services are free and tailored to meet your needs. Free 2011 tax return We have offices in every state, the District of Columbia, and Puerto Rico. Free 2011 tax return How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. Free 2011 tax return irs. Free 2011 tax return gov/advocate, or call us toll-free at 1-877-777-4778. Free 2011 tax return How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Free 2011 tax return If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. Free 2011 tax return irs. Free 2011 tax return gov/sams. Free 2011 tax return Low Income Taxpayer Clinics. Free 2011 tax return   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. Free 2011 tax return Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Free 2011 tax return Visit www. Free 2011 tax return TaxpayerAdvocate. Free 2011 tax return irs. Free 2011 tax return gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. Free 2011 tax return gnewbus01 Prev  Up  Next   Home   More Online Publications