Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Irs Gove

1040nr Ez 2013How To File Tax ReturnState Ms Income Tax Form 2005Filing 2011 Tax ReturnMontana State Tax Form 2011How Can I File My 2009 Taxes Online For FreeAmending Your Tax ReturnForm 1040x 2011Ez Form 2014Taxslayer Free For MilitaryTax Software ComparisonWww 1040 ComH And R Block 1040x1040ez Form Booklet2013 1040ezEz Tax Forms2012 Tax Software Downloads2008 1040xH&r Online1040x Amended Return FormIrs Tax Form 1120 For 2012H&r Block Advantage E FileH&r Block Free File Tax Return1040ez 2014 FormHow To File An Amended Tax Return OnlineAmmending TaxesH&r Block Onlinetaxes Hrblock ComAmended Tax Return For 2012Amended Tax ReturnFile Tax Extension OnlineH&r Block File 2012 TaxesWww Irs GovFree Online Tax 2010E File A 1040xTurbotax 2011 SoftwareFile Taxes OnlineHow To File 2011 Taxes OnlineIrs Forms 1040 2011Free Income Tax FilingIrs Forms For 2011

Irs Gove

Irs gove 23. Irs gove   Interest Expense Table of Contents Introduction Useful Items - You may want to see: Home Mortgage InterestAmount Deductible Points Mortgage Insurance Premiums Form 1098, Mortgage Interest Statement Investment InterestInvestment Property Allocation of Interest Expense Limit on Deduction Items You Cannot DeductPersonal Interest Allocation of Interest How To ReportMore than one borrower. Irs gove Mortgage proceeds used for business or investment. Irs gove Introduction This chapter discusses what interest expenses you can deduct. Irs gove Interest is the amount you pay for the use of borrowed money. Irs gove The following are types of interest you can deduct as itemized deductions on Schedule A (Form 1040). Irs gove Home mortgage interest, including certain points and mortgage insurance premiums. Irs gove Investment interest. Irs gove This chapter explains these deductions. Irs gove It also explains where to deduct other types of interest and lists some types of interest you cannot deduct. Irs gove Use Table 23-1 to find out where to get more information on various types of interest, including investment interest. Irs gove Useful Items - You may want to see: Publication 936 Home Mortgage Interest Deduction 550 Investment Income and Expenses Home Mortgage Interest Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). Irs gove The loan may be a mortgage to buy your home, a second mortgage, a line of credit, or a home equity loan. Irs gove You can deduct home mortgage interest if all the following conditions are met. Irs gove You file Form 1040 and itemize deductions on Schedule A (Form 1040). Irs gove The mortgage is a secured debt on a qualified home in which you have an ownership interest. Irs gove (Generally, your mortgage is a secured debt if you put your home up as collateral to protect the interest of the lender. Irs gove The term “qualified home” means your main home or second home. Irs gove For details, see Publication 936. Irs gove )  Both you and the lender must intend that the loan be repaid. Irs gove Amount Deductible In most cases, you can deduct all of your home mortgage interest. Irs gove How much you can deduct depends on the date of the mortgage, the amount of the mortgage, and how you use the mortgage proceeds. Irs gove Fully deductible interest. Irs gove   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. Irs gove (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. Irs gove )   The three categories are as follows: Mortgages you took out on or before October 13, 1987 (called grandfathered debt). Irs gove 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). Irs gove 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). Irs gove The dollar limits for the second and third categories apply to the combined mortgages on your main home and second home. Irs gove   See Part II of Publication 936 for more detailed definitions of grandfathered, home acquisition, and home equity debt. Irs gove    You can use Figure 23-A to check whether your home mortgage interest is fully deductible. Irs gove Figure 23-A. Irs gove Is My Home Mortgage Interest Fully Deductible? Please click here for the text description of the image. Irs gove Figure 23-A. Irs gove Is My Interest Fully Deductible? Limits on deduction. Irs gove   You cannot fully deduct interest on a mortgage that does not fit into any of the three categories listed earlier. Irs gove If this applies to you, see Part II of Publication 936 to figure the amount of interest you can deduct. Irs gove Special Situations This section describes certain items that can be included as home mortgage interest and others that cannot. Irs gove It also describes certain special situations that may affect your deduction. Irs gove Late payment charge on mortgage payment. Irs gove   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. Irs gove Mortgage prepayment penalty. Irs gove   If you pay off your home mortgage early, you may have to pay a penalty. Irs gove 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. Irs gove Sale of home. Irs gove   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 sale. Irs gove Example. Irs gove John and Peggy Harris sold their home on May 7. Irs gove Through April 30, they made home mortgage interest payments of $1,220. Irs gove 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. Irs gove Their mortgage interest deduction is $1,270 ($1,220 + $50). Irs gove Prepaid interest. Irs gove   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. Irs gove You can deduct in each year only the interest that qualifies as home mortgage interest for that year. Irs gove However, there is an exception that applies to points, discussed later. Irs gove Mortgage interest credit. Irs gove   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. Irs gove Figure the credit on Form 8396, Mortgage Interest Credit. Irs gove If you take this credit, you must reduce your mortgage interest deduction by the amount of the credit. Irs gove   For more information on the credit, see chapter 37. Irs gove Ministers' and military housing allowance. Irs gove   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. Irs gove Hardest Hit Fund and Emergency Homeowners' Loan Programs. Irs gove   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. Irs gove 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. Irs gove 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. Irs gove 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 (real property taxes). Irs gove 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. Irs gove Mortgage assistance payments under section 235 of the National Housing Act. Irs gove   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. Irs gove You cannot deduct the interest that is paid for you. Irs gove No other effect on taxes. Irs gove   Do not include these mortgage assistance payments in your income. Irs gove Also, do not use these payments to reduce other deductions, such as real estate taxes. Irs gove Divorced or separated individuals. Irs gove   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. Irs gove See the discussion of Payments for jointly-owned home in chapter 18. Irs gove Redeemable ground rents. Irs gove   If you make annual or periodic rental payments on a redeemable ground rent, you can deduct them as mortgage interest. Irs gove   Payments made to end the lease and to buy the lessor's entire interest in the land are not deductible as mortgage interest. Irs gove For more information, see Publication 936. Irs gove Nonredeemable ground rents. Irs gove   Payments on a nonredeemable ground rent are not mortgage interest. Irs gove You can deduct them as rent if they are a business expense or if they are for rental property. Irs gove Reverse mortgages. Irs gove   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. Irs gove With a reverse mortgage, you retain title to your home. Irs gove 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. Irs gove Because reverse mortgages are considered loan advances and not income, the amount you receive is not taxable. Irs gove Any interest (including original issue discount) accrued on a reverse mortgage is not deductible until the loan is paid in full. Irs gove Your deduction may be limited because a reverse mortgage loan generally is subject to the limit on Home Equity Debt discussed in Publication 936. Irs gove Rental payments. Irs gove   If you live in a house before final settlement on the purchase, any payments you make for that period are rent and not interest. Irs gove This is true even if the settlement papers call them interest. Irs gove You cannot deduct these payments as home mortgage interest. Irs gove Mortgage proceeds invested in tax-exempt securities. Irs gove   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. Irs gove “Grandfathered debt” and “home equity debt” are defined earlier under Amount Deductible. Irs gove Refunds of interest. Irs gove   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. Irs gove 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. Irs gove However, you need to include it only up to the amount of the deduction that reduced your tax in the earlier year. Irs gove This is true whether the interest overcharge was refunded to you or was used to reduce the outstanding principal on your mortgage. Irs gove    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. Irs gove For information about Form 1098, see Form 1098, Mortgage Interest Statement , later. Irs gove   For more information on how to treat refunds of interest deducted in earlier years, see Recoveries in chapter 12. Irs gove Points The term “points” is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Irs gove Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points. Irs gove A borrower is treated as paying any points that a home seller pays for the borrower's mortgage. Irs gove See Points paid by the seller , later. Irs gove General Rule You generally cannot deduct the full amount of points in the year paid. Irs gove Because they are prepaid interest, you generally deduct them ratably over the life (term) of the mortgage. Irs gove See Deduction Allowed Ratably , next. Irs gove For exceptions to the general rule, see Deduction Allowed in Year Paid , later. Irs gove 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. Irs gove You use the cash method of accounting. Irs gove This means you report income in the year you receive it and deduct expenses in the year you pay them. Irs gove Most individuals use this method. Irs gove Your loan is secured by a home. Irs gove (The home does not need to be your main home. Irs gove ) Your loan period is not more than 30 years. Irs gove 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. Irs gove 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. Irs gove Deduction Allowed in Year Paid You can fully deduct points in the year paid if you meet all the following tests. Irs gove (You can use Figure 23-B as a quick guide to see whether your points are fully deductible in the year paid. Irs gove ) Your loan is secured by your main home. Irs gove (Your main home is the one you ordinarily live in most of the time. Irs gove ) Paying points is an established business practice in the area where the loan was made. Irs gove The points paid were not more than the points generally charged in that area. Irs gove You use the cash method of accounting. Irs gove This means you report income in the year you receive it and deduct expenses in the year you pay them. Irs gove (If you want more information about this method, see Accounting Methods in chapter 1. Irs gove ) 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. Irs gove The funds you provided at or before closing, plus any points the seller paid, were at least as much as the points charged. Irs gove The funds you provided are not required to have been applied to the points. Irs gove They can include a down payment, an escrow deposit, earnest money, and other funds you paid at or before closing for any purpose. Irs gove You cannot have borrowed these funds from your lender or mortgage broker. Irs gove You use your loan to buy or build your main home. Irs gove The points were computed as a percentage of the principal amount of the mortgage. Irs gove The amount is clearly shown on the settlement statement (such as the Settlement Statement, Form HUD-1) as points charged for the mortgage. Irs gove The points may be shown as paid from either your funds or the seller's. Irs gove Figure 23-B. Irs gove Are My Points Fully Deductible This Year? Please click here for the text description of the image. Irs gove Figure 23-B. Irs gove Are My Points Fully Deductible This Year? Note. Irs gove 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. Irs gove Home improvement loan. Irs gove   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. Irs gove Second home. Irs gove You cannot fully deduct in the year paid points you pay on loans secured by your second home. Irs gove You can deduct these points only over the life of the loan. Irs gove Refinancing. Irs gove   Generally, points you pay to refinance a mortgage are not deductible in full in the year you pay them. Irs gove This is true even if the new mortgage is secured by your main home. Irs gove   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 , earlier, you can fully deduct the part of the points related to the improvement in the year you paid them with your own funds. Irs gove You can deduct the rest of the points over the life of the loan. Irs gove Example 1. Irs gove In 1998, Bill Fields got a mortgage to buy a home. Irs gove In 2013, Bill refinanced that mortgage with a 15-year $100,000 mortgage loan. Irs gove The mortgage is secured by his home. Irs gove To get the new loan, he had to pay three points ($3,000). Irs gove 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. Irs gove Bill paid the points out of his private funds, rather than out of the proceeds of the new loan. Irs gove The payment of points is an established practice in the area, and the points charged are not more than the amount generally charged there. Irs gove Bill's first payment on the new loan was due July 1. Irs gove He made six payments on the loan in 2013 and is a cash basis taxpayer. Irs gove Bill used the funds from the new mortgage to repay his existing mortgage. Irs gove 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. Irs gove He cannot deduct all of the points in 2013. Irs gove He can deduct two points ($2,000) ratably over the life of the loan. Irs gove He deducts $67 [($2,000 ÷ 180 months) × 6 payments] of the points in 2013. Irs gove The other point ($1,000) was a fee for services and is not deductible. Irs gove Example 2. Irs gove 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. Irs gove Bill deducts 25% ($25,000 ÷ $100,000) of the points ($2,000) in 2013. Irs gove His deduction is $500 ($2,000 × 25%). Irs gove Bill also deducts the ratable part of the remaining $1,500 ($2,000 − $500) that must be spread over the life of the loan. Irs gove This is $50 [($1,500 ÷ 180 months) × 6 payments] in 2013. Irs gove The total amount Bill deducts in 2013 is $550 ($500 + $50). Irs gove Special Situations This section describes certain special situations that may affect your deduction of points. Irs gove Original issue discount. Irs gove   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. Irs gove This reduction results in original issue discount, which is discussed in chapter 4 of Publication 535. Irs gove Amounts charged for services. Irs gove   Amounts charged by the lender for specific services connected to the loan are not interest. Irs gove Examples of these charges are: Appraisal fees, Notary fees, and Preparation costs for the mortgage note or deed of trust. Irs gove You cannot deduct these amounts as points either in the year paid or over the life of the mortgage. Irs gove Points paid by the seller. Irs gove   The term “points” includes loan placement fees that the seller pays to the lender to arrange financing for the buyer. Irs gove Treatment by seller. Irs gove   The seller cannot deduct these fees as interest. Irs gove But they are a selling expense that reduces the amount realized by the seller. Irs gove See chapter 15 for information on selling your home. Irs gove Treatment by buyer. Irs gove    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. Irs gove If all the tests under Deduction Allowed in Year Paid , earlier, are met, the buyer can deduct the points in the year paid. Irs gove If any of those tests are not met, the buyer deducts the points over the life of the loan. Irs gove   For information about basis, see chapter 13. Irs gove Funds provided are less than points. Irs gove   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. Irs gove In addition, you can deduct any points paid by the seller. Irs gove Example 1. Irs gove When you took out a $100,000 mortgage loan to buy your home in December, you were charged one point ($1,000). Irs gove You meet all the tests for deducting points in the year paid, except the only funds you provided were a $750 down payment. Irs gove Of the $1,000 charged for points, you can deduct $750 in the year paid. Irs gove You spread the remaining $250 over the life of the mortgage. Irs gove Example 2. Irs gove 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. Irs gove In the year paid, you can deduct $1,750 ($750 of the amount you were charged plus the $1,000 paid by the seller). Irs gove You spread the remaining $250 over the life of the mortgage. Irs gove You must reduce the basis of your home by the $1,000 paid by the seller. Irs gove Excess points. Irs gove   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. Irs gove You must spread any additional points over the life of the mortgage. Irs gove Mortgage ending early. Irs gove   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. Irs gove However, if you refinance the mortgage with the same lender, you cannot deduct any remaining balance of spread points. Irs gove Instead, deduct the remaining balance over the term of the new loan. Irs gove    A mortgage may end early due to a prepayment, refinancing, foreclosure, or similar event. Irs gove Example. Irs gove Dan paid $3,000 in points in 2002 that he had to spread out over the 15-year life of the mortgage. Irs gove He deducts $200 points per year. Irs gove Through 2012, Dan has deducted $2,200 of the points. Irs gove Dan prepaid his mortgage in full in 2013. Irs gove He can deduct the remaining $800 of points in 2013. Irs gove Limits on deduction. Irs gove   You cannot fully deduct points paid on a mortgage unless the mortgage fits into one of the categories listed earlier under Fully deductible interest . Irs gove See Publication 936 for details. Irs gove Mortgage Insurance Premiums You can treat amounts you paid during 2013 for qualified mortgage insurance as home mortgage interest. Irs gove The insurance must be in connection with home acquisition debt and the insurance contract must have been issued after 2006. Irs gove Qualified mortgage insurance. Irs gove   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). Irs gove   Mortgage insurance provided by the Department of Veterans Affairs is commonly known as a funding fee. Irs gove If provided by the Rural Housing Service, it is commonly known as a guarantee fee. Irs gove These fees can be deducted fully in 2013 if the mortgage insurance contract was issued in 2013. Irs gove Contact the mortgage insurance issuer to determine the deductible amount if it is not reported in box 4 of Form 1098. Irs gove Special rules for prepaid mortgage insurance. Irs gove   Generally, if you paid premiums for qualified mortgage insurance that are allocable to periods after the close of the tax year, such premiums are treated as paid in the period to which they are allocated. Irs gove 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. Irs gove No deduction is allowed for the unamortized balance if the mortgage is satisfied before its term. Irs gove This paragraph does not apply to qualified mortgage insurance provided by the Department of Veterans Affairs or the Rural Housing Service. Irs gove See the Example below. Irs gove Example. Irs gove Ryan purchased a home in May of 2012 and financed the home with a 15-year mortgage. Irs gove Ryan also prepaid all of the $9,240 in private mortgage insurance required at the time of closing in May. Irs gove 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. Irs gove Ryan's adjusted gross income (AGI) for 2012 is $76,000. Irs gove Ryan can deduct $880 ($9,240 ÷ 84 × 8 months) for qualified mortgage insurance premiums in 2012. Irs gove For 2013, Ryan can deduct $1,320 ($9,240 ÷ 84 × 12 months) if his AGI is $100,000 or less. Irs gove 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). Irs gove Limit on deduction. Irs gove   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. Irs gove 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. Irs gove If your adjusted gross income is more than $109,000 ($54,500 if married filing separately), you cannot deduct your mortgage insurance premiums. Irs gove 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. Irs gove You will receive the statement if you pay interest to a person (including a financial institution or a cooperative housing corporation) in the course of that person's trade or business. Irs gove A governmental unit is a person for purposes of furnishing the statement. Irs gove The statement for each year should be sent to you by January 31 of the following year. Irs gove A copy of this form will also be sent to the IRS. Irs gove 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. Irs gove However, it should not show any interest that was paid for you by a government agency. Irs gove As a general rule, Form 1098 will include only points that you can fully deduct in the year paid. Irs gove However, certain points not included on Form 1098 also may be deductible, either in the year paid or over the life of the loan. Irs gove See Points , earlier, to determine whether you can deduct points not shown on Form 1098. Irs gove Prepaid interest on Form 1098. Irs gove   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. Irs gove However, you cannot deduct the prepaid amount for January 2014 in 2013. Irs gove (See Prepaid interest , earlier. Irs gove ) You will have to figure the interest that accrued for 2014 and subtract it from the amount in box 1. Irs gove You will include the interest for January 2014 with the other interest you pay for 2014. Irs gove See How To Report , later. Irs gove Refunded interest. Irs gove   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. Irs gove See Refunds of interest , earlier. Irs gove Mortgage insurance premiums. Irs gove   The amount of mortgage insurance premiums you paid during 2013 may be shown in box 4 of Form 1098. Irs gove See Mortgage Insurance Premiums, earlier. Irs gove Investment Interest This section discusses interest expenses you may be able to deduct as an investor. Irs gove If you borrow money to buy property you hold for investment, the interest you pay is investment interest. Irs gove You can deduct investment interest subject to the limit discussed later. Irs gove However, you cannot deduct interest you incurred to produce tax-exempt income. Irs gove Nor can you deduct interest expenses on straddles. Irs gove Investment interest does not include any qualified home mortgage interest or any interest taken into account in computing income or loss from a passive activity. Irs gove Investment Property Property held for investment includes property that produces interest, dividends, annuities, or royalties not derived in the ordinary course of a trade or business. Irs gove It also includes property that produces gain or loss (not derived in the ordinary course of a trade or business) from the sale or trade of property producing these types of income or held for investment (other than an interest in a passive activity). Irs gove Investment property also includes an interest in a trade or business activity in which you did not materially participate (other than a passive activity). Irs gove Partners, shareholders, and beneficiaries. Irs gove   To determine your investment interest, combine your share of investment interest from a partnership, S corporation, estate, or trust with your other investment interest. Irs gove Allocation of Interest Expense If you borrow money for business or personal purposes as well as for investment, you must allocate the debt among those purposes. Irs gove Only the interest expense on the part of the debt used for investment purposes is treated as investment interest. Irs gove The allocation is not affected by the use of property that secures the debt. Irs gove Limit on Deduction Generally, your deduction for investment interest expense is limited to the amount of your net investment income. Irs gove You can carry over the amount of investment interest that you could not deduct because of this limit to the next tax year. Irs gove The interest carried over is treated as investment interest paid or accrued in that next year. Irs gove You can carry over disallowed investment interest to the next tax year even if it is more than your taxable income in the year the interest was paid or accrued. Irs gove Net Investment Income Determine the amount of your net investment income by subtracting your investment expenses (other than interest expense) from your investment income. Irs gove Investment income. Irs gove    This generally includes your gross income from property held for investment (such as interest, dividends, annuities, and royalties). Irs gove Investment income does not include Alaska Permanent Fund dividends. Irs gove It also does not include qualified dividends or net capital gain unless you choose to include them. Irs gove Choosing to include qualified dividends. Irs gove   Investment income generally does not include qualified dividends, discussed in chapter 8. Irs gove However, you can choose to include all or part of your qualified dividends in investment income. Irs gove   You make this choice by completing Form 4952, line 4g, according to its instructions. Irs gove   If you choose to include any amount of your qualified dividends in investment income, you must reduce your qualified dividends that are eligible for the lower capital gains tax rates by the same amount. Irs gove Choosing to include net capital gain. Irs gove   Investment income generally does not include net capital gain from disposing of investment property (including capital gain distributions from mutual funds). Irs gove However, you can choose to include all or part of your net capital gain in investment income. Irs gove    You make this choice by completing Form 4952, line 4g, according to its instructions. Irs gove   If you choose to include any amount of your net capital gain in investment income, you must reduce your net capital gain that is eligible for the lower capital gains tax rates by the same amount. Irs gove    Before making either choice, consider the overall effect on your tax liability. Irs gove Compare your tax if you make one or both of these choices with your tax if you do not. Irs gove Investment income of child reported on parent's return. Irs gove    Investment income includes the part of your child's interest and dividend income that you choose to report on your return. Irs gove If the child does not have qualified dividends, Alaska Permanent Fund dividends, or capital gain distributions, this is the amount on line 6 of Form 8814, Parents' Election To Report Child's Interest and Dividends. Irs gove Child's qualified dividends. Irs gove   If part of the amount you report is your child's qualified dividends, that part (which is reported on Form 1040, line 9b) generally does not count as investment income. Irs gove However, you can choose to include all or part of it in investment income, as explained under Choosing to include qualified dividends , earlier. Irs gove   Your investment income also includes the amount on Form 8814, line 12 (or, if applicable, the reduced amount figured next under Child's Alaska Permanent Fund dividends). Irs gove Child's Alaska Permanent Fund dividends. Irs gove   If part of the amount you report is your child's Alaska Permanent Fund dividends, that part does not count as investment income. Irs gove To figure the amount of your child's income that you can consider your investment income, start with the amount on Form 8814, line 6. Irs gove Multiply that amount by a percentage that is equal to the Alaska Permanent Fund dividends divided by the total amount on Form 8814, line 4. Irs gove Subtract the result from the amount on Form 8814, line 12. Irs gove Child's capital gain distributions. Irs gove    If part of the amount you report is your child's capital gain distributions, that part (which is reported on Schedule D, line 13, or Form 1040, line 13) generally does not count as investment income. Irs gove However, you can choose to include all or part of it in investment income, as explained in Choosing to include net capital gain , earlier. Irs gove   Your investment income also includes the amount on Form 8814, line 12 (or, if applicable, the reduced amount figured under Child's Alaska Permanent Fund dividends , earlier). Irs gove Investment expenses. Irs gove   Investment expenses are your allowed deductions (other than interest expense) directly connected with the production of investment income. Irs gove Investment expenses that are included as a miscellaneous itemized deduction on Schedule A (Form 1040) are allowable deductions after applying the 2% limit that applies to miscellaneous itemized deductions. Irs gove Use the smaller of: The investment expenses included on Schedule A (Form 1040), line 23, or The amount on Schedule A, line 27. Irs gove Losses from passive activities. Irs gove   Income or expenses that you used in computing income or loss from a passive activity are not included in determining your investment income or investment expenses (including investment interest expense). Irs gove See Publication 925, Passive Activity and At-Risk Rules, for information about passive activities. Irs gove Form 4952 Use Form 4952, Investment Interest Expense Deduction, to figure your deduction for investment interest. Irs gove Exception to use of Form 4952. Irs gove   You do not have to complete Form 4952 or attach it to your return if you meet all of the following tests. Irs gove Your investment interest expense is not more than your investment income from interest and ordinary dividends minus any qualified dividends. Irs gove You do not have any other deductible investment expenses. Irs gove You have no carryover of investment interest expense from 2012. Irs gove If you meet all of these tests, you can deduct all of your investment interest. Irs gove More Information For more information on investment interest, see Interest Expenses in chapter 3 of Publication 550. Irs gove Items You Cannot Deduct Some interest payments are not deductible. Irs gove Certain expenses similar to interest also are not deductible. Irs gove Nondeductible expenses include the following items. Irs gove Personal interest (discussed later). Irs gove Service charges (however, see Other Expenses (Line 23) in chapter 28). Irs gove Annual fees for credit cards. Irs gove Loan fees. Irs gove Credit investigation fees. Irs gove Interest to purchase or carry tax-exempt securities. Irs gove Penalties. Irs gove   You cannot deduct fines and penalties paid to a government for violations of law, regardless of their nature. Irs gove Personal Interest Personal interest is not deductible. Irs gove Personal interest is any interest that is not home mortgage interest, investment interest, business interest, or other deductible interest. Irs gove It includes the following items. Irs gove Interest on car loans (unless you use the car for business). Irs gove Interest on federal, state, or local income tax. Irs gove Finance charges on credit cards, retail installment contracts, and revolving charge accounts incurred for personal expenses. Irs gove Late payment charges by a public utility. Irs gove You may be able to deduct interest you pay on a qualified student loan. Irs gove For details, see Publication 970, Tax Benefits for Education. Irs gove Allocation of Interest If you use the proceeds of a loan for more than one purpose (for example, personal and business), you must allocate the interest on the loan to each use. Irs gove However, you do not have to allocate home mortgage interest if it is fully deductible, regardless of how the funds are used. Irs gove You allocate interest (other than fully deductible home mortgage interest) on a loan in the same way as the loan itself is allocated. Irs gove You do this by tracing disbursements of the debt proceeds to specific uses. Irs gove For details on how to do this, see chapter 4 of Publication 535. Irs gove How To Report You must file Form 1040 to deduct any home mortgage interest expense on your tax return. Irs gove Where you deduct your interest expense generally depends on how you use the loan proceeds. Irs gove See Table 23-1 for a summary of where to deduct your interest expense. Irs gove Home mortgage interest and points. Irs gove   Deduct the home mortgage interest and points reported to you on Form 1098 on Schedule A (Form 1040), line 10. Irs gove 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. Irs gove Attach a statement explaining the difference and print “See attached” next to line 10. Irs gove    Deduct home mortgage interest that was not reported to you on Form 1098 on Schedule A (Form 1040), line 11. Irs gove 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. Irs gove The seller must give you this number and you must give the seller your TIN. Irs gove A Form W-9, Request for Taxpayer Identification Number and Certification, can be used for this purpose. Irs gove Failure to meet any of these requirements may result in a $50 penalty for each failure. Irs gove 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. Irs gove See Social Security Number (SSN) in chapter 1 for more information about TINs. Irs gove    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. Irs gove   Deduct mortgage insurance premiums on Schedule A (Form 1040), line 13. Irs gove More than one borrower. Irs gove   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. Irs gove Show how much of the interest each of you paid, and give the name and address of the person who received the form. Irs gove Deduct your share of the interest on Schedule A (Form 1040), line 11, and print “See attached” next to the line. Irs gove Also, deduct your share of any qualified mortgage insurance premiums on Schedule A (Form 1040), line 13. Irs gove   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. Irs gove You should let each of the other borrowers know what his or her share is. Irs gove Mortgage proceeds used for business or investment. Irs gove    If your home mortgage interest deduction is limited, but all or part of the mortgage proceeds were used for business, investment, or other deductible activities, see Table 23-1. Irs gove It shows where to deduct the part of your excess interest that is for those activities. Irs gove Investment interest. Irs gove    Deduct investment interest, subject to certain limits discussed in Publication 550, on Schedule A (Form 1040), line 14. Irs gove Amortization of bond premium. Irs gove   There are various ways to treat the premium you pay to buy taxable bonds. Irs gove See Bond Premium Amortization in Publication 550. Irs gove Income-producing rental or royalty interest. Irs gove   Deduct interest on a loan for income-producing rental or royalty property that is not used in your business in Part I of Schedule E (Form 1040). Irs gove Example. Irs gove You rent out part of your home and borrow money to make repairs. Irs gove You can deduct only the interest payment for the rented part in Part I of Schedule E (Form 1040). Irs gove Deduct the rest of the interest payment on Schedule A (Form 1040) if it is deductible home mortgage interest. Irs gove Table 23-1. Irs gove Where To Deduct Your Interest Expense IF you have . Irs gove . Irs gove . Irs gove THEN deduct it on . Irs gove . Irs gove . Irs gove AND for more information go to . Irs gove . Irs gove . Irs gove deductible student loan interest Form 1040, line 33, or Form 1040A, line 18 Publication 970. Irs gove deductible home mortgage interest and points reported on Form 1098 Schedule A (Form 1040), line 10 Publication 936. Irs gove deductible home mortgage interest not reported on Form 1098 Schedule A (Form 1040), line 11 Publication 936. Irs gove deductible points not reported on Form 1098 Schedule A (Form 1040), line 12 Publication 936. Irs gove deductible mortgage insurance premiums Schedule A (Form 1040), line 13 Publication 936. Irs gove deductible investment interest (other than incurred to produce rents or royalties) Schedule A (Form 1040), line 14 Publication 550. Irs gove deductible business interest (non-farm) Schedule C or C-EZ (Form 1040) Publication 535. Irs gove deductible farm business interest Schedule F (Form 1040) Publications 225 and 535. Irs gove deductible interest incurred to produce rents or royalties Schedule E (Form 1040) Publications 527 and 535. Irs gove personal interest not deductible. Irs gove Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

IRS Gives Tax Relief To Oklahoma Tornado Victims; Return Filing and Tax Payment Deadlines Extended to Sept. 30

Updated 7/02/2013 to include LeFlore, Okfuskee and Okmulgee counties.
Updated 6/13/2013 to include Canadian County.

IRS YouTube Videos
Help for Disaster Victims: English | Spanish | ASL
How to Request a Copy of Your Tax Return: English | Spanish | ASL

Podcast
Disaster Assistance: English | Spanish

IR-2013-53, May 21, 2013

WASHINGTON –– After Monday’s devastating tornado in Moore and Oklahoma City,   the Internal Revenue Service today provided tax relief to individuals and businesses affected by this and other severe storms occurring in parts of Oklahoma.

Following Monday’s disaster declaration for individual assistance issued by the Federal Emergency Management Agency, the IRS announced today that affected taxpayers in Canadian, Cleveland, LeFlore, Lincoln, McClain, Okfuskee, Oklahoma, Okmulgee and Pottawatomie counties will receive special tax relief. Other locations may be added in coming days based on additional damage assessments by FEMA.

The tax relief postpones various tax filing and payment deadlines that occurred starting on May 18, 2013. As a result, affected individuals and businesses will have until Sept. 30, 2013 to file these returns and pay any taxes due. This includes the June 17 and Sept. 16 deadlines for making estimated tax payments. A variety of business tax deadlines are also affected including the July 31 deadline for second quarter payroll and excise tax returns and the Sept. 3 deadline for truckers filing highway use tax returns.

The IRS will abate any interest, late-payment or late-filing penalty that would otherwise apply. The agency automatically provides this relief to any taxpayer located in the disaster area. Taxpayers need not contact the IRS to get this relief.

Beyond the relief provided to taxpayers in the FEMA-designated counties, the IRS will work with any taxpayer who lives outside the disaster area but whose books, records or tax professional are located in the areas affected by these storms. All workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization also qualify for relief. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227.

Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either last year’s or this year’s return. Claiming these casualty loss deductions on either an original or amended 2012 return will get the taxpayer an earlier refund but waiting to claim them on a 2013 return could result in greater tax savings depending upon other income factors.

In addition, the IRS is waiving failure-to-deposit penalties for federal payroll and excise tax deposits normally due on or after May 18 and before June 3 if the deposits are made by June 3, 2013. Details on available relief can be found on the disaster relief page on IRS.gov.

The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.

The IRS is actively monitoring the situation and will provide additional relief if needed.

See also: 

Tax Relief for Victims of Severe Storms and Tornadoes in Oklahoma

Extra Time Granted for Tax-Exempt Bond Issuers Affected by Severe Storms and Tornados in Oklahoma

Follow the IRS on New Media
Subscribe to IRS Newswire

Page Last Reviewed or Updated: 04-Sep-2013

The Irs Gove

Irs gove Index A Acknowledgment, Acknowledgment. Irs gove Adoption expenses, Personal Expenses Airplanes, donations of, Cars, Boats, and Airplanes Appraisal fees, Appraisal Fees Assistance (see Tax help) Athletic events, Athletic events. Irs gove B Bargain sales, Bargain Sales Blood donated, Value of Time or Services Boats, donations of, Cars, Boats, and Airplanes Boats, fair market value, Cars, boats, and airplanes. Irs gove C Canadian charity, Canadian charities. Irs gove Capital gain property, Capital Gain Property Car expenses, Car expenses. Irs gove , Car expenses. Irs gove Carryovers, Carryovers Cars, donations of, Cars, Boats, and Airplanes Cash contributions, records to keep, Cash Contributions Charity benefit events, Charity benefit events. Irs gove Church deacon, Church deacon. Irs gove Clothing Fair market value of, Used clothing. Irs gove Conservation contribution, Special 50% Limit for Qualified Conservation Contributions Contributions from which you benefit, Contributions From Which You Benefit, Contributions From Which You Benefit Contributions of property, Contributions of Property Contributions subject to special rules Car, boat, or airplane, 1098–C, Contributions Subject to Special Rules Clothing, Contributions Subject to Special Rules Fractional interest in tangible personal property, Contributions Subject to Special Rules Future interest in tangible personal property, Contributions Subject to Special Rules Household items, Contributions Subject to Special Rules Inventory from your business, Contributions Subject to Special Rules Partial interest in property, Contributions Subject to Special Rules Patent or other intellectual property, Contributions Subject to Special Rules Property subject to a debt, Contributions Subject to Special Rules Qualified conservation contribution, Contributions Subject to Special Rules Taxidermy property, Contributions Subject to Special Rules Contributions to nonqualified organizations Foreign organizations, Contributions to Nonqualified Organizations Contributions you can deduct, Contributions You Can Deduct Conventions of a qualified organization, Conventions. Irs gove D Daily allowance (per diem) from a charitable organization, Daily allowance (per diem). Irs gove Deduction limits, Limits on Deductions Determining fair market value, Determining Fair Market Value Disaster relief, Reminders Donor-advised funds, Contributions to Donor-Advised Funds E Easement, Building in registered historic district. Irs gove F Farmer, Qualified farmer or rancher. Irs gove Food inventory, Food Inventory Foreign organizations Canadian, Canadian charities. Irs gove Israeli, Israeli charities. Irs gove Mexican, Mexican charities. Irs gove Form 8282, Form 8282. Irs gove 8283, Total deduction over $500. Irs gove Foster parents, Foster parents. Irs gove Free tax services, Free help with your tax return. Irs gove Future interests in property, Future Interest in Tangible Personal Property H Help (see Tax help) Historic building, Building in registered historic district. Irs gove Household items Fair market value of, Household items. Irs gove How to report, How To Report Noncash contributions, Reporting expenses for student living with you. Irs gove I Introduction, Introduction Inventory, Food Inventory Israeli charity, Israeli charities. Irs gove L Legislation, influencing, Contributions From Which You Benefit Limit on itemized deductions, What's New Limits on deductions, Limits on Deductions 20% limit, 20% Limit 30% limit, 30% Limit 50% limit, 50% Limit Calculation, How To Figure Your Deduction When Limits Apply Capital gain property, Special 30% Limit for Capital Gain Property Qualified conservation contributions, Special 50% Limit for Qualified Conservation Contributions M Meals, Personal Expenses Membership fees or dues, Membership fees or dues. Irs gove Mexican charity, Mexican charities. Irs gove Motor vehicles, donations of, Cars, Boats, and Airplanes Motor vehicles, fair market value, Cars, boats, and airplanes. Irs gove N Noncash contributions, Noncash Contributions How to report, Reporting expenses for student living with you. Irs gove Records to keep, Noncash Contributions Nondeductible contributions, Contributions You Cannot Deduct O Ordinary income property, Ordinary Income Property Out-of-pocket expenses, Out-of-pocket expenses. Irs gove Out-of-pocket expenses in giving services, Out-of-Pocket Expenses in Giving Services P Payroll deductions, Payroll deductions. Irs gove , Payroll deductions. Irs gove Penalty, valuation overstatement, Penalty Personal expenses, Personal Expenses Private foundation, 50% Limit Organizations Private nonoperating foundation, Contributions to private nonoperating foundations. Irs gove , 50% Limit Organizations Private operating foundation, 50% Limit Organizations Property Bargain sales, Bargain Sales Basis, Giving Property That Has Decreased in Value Capital gain, Capital Gain Property Capital gain election, Capital gain property election. Irs gove Decreased in value, Giving Property That Has Decreased in Value Future interests, Future Interest in Tangible Personal Property Increased in value, Giving Property That Has Increased in Value Inventory, Food Inventory Ordinary income, Ordinary Income Property Unrelated use, Tangible personal property put to unrelated use. Irs gove Publications (see Tax help) Q Qualified charitable distributions, Qualified Charitable Distributions Qualified conservation contribution, Special 50% Limit for Qualified Conservation Contributions Qualified organizations Foreign qualified organizations Canadian, Organizations That Qualify To Receive Deductible Contributions Israeli, Organizations That Qualify To Receive Deductible Contributions Mexican, Organizations That Qualify To Receive Deductible Contributions Types, Organizations That Qualify To Receive Deductible Contributions R Raffle or bingo, Contributions From Which You Benefit Recapture No exempt use, Recapture if no exempt use. Irs gove Recapture of deduction of fractional interest in tangible personal property Additional tax, Recapture of deduction. Irs gove Records to keep, Records To Keep Reminders Disaster relief, Reminders Reporting, How To Report Retirement home, Contributions From Which You Benefit S Services, value of, Value of Time or Services Split-dollar insurance arrangements, Contributions From Which You Benefit Student, Mutual exchange program. Irs gove Exchange program, Mutual exchange program. Irs gove Living with you, Student living with you. Irs gove Student living with you, Expenses Paid for Student Living With You, Reporting expenses for student living with you. Irs gove T Tangible personal property Future interest in, Future Interest in Tangible Personal Property Tax help, How To Get Tax Help Time, value of, Value of Time or Services Token items, Certain membership benefits can be disregarded. Irs gove Travel expenses, Travel. Irs gove Travel expenses for charitable services, Deductible travel expenses. Irs gove Tuition, Contributions From Which You Benefit U Underprivileged youths, Underprivileged youths selected by charity. Irs gove Uniforms, Uniforms. Irs gove Unrelated use, Unrelated use. Irs gove V Volunteers, Out-of-Pocket Expenses in Giving Services W Whaling captain, Expenses of Whaling Captains When to deduct, When To Deduct Prev  Up     Home   More Online Publications