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H&r Block Military Tax

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H&r Block Military Tax

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

H&r block military tax Index A Abortion, Abortion Acupuncture, Acupuncture Adopted child's medical expenses, Adopted child. H&r block military tax AGI limitation, Introduction, Community property states. H&r block military tax Alcoholism, Alcoholism Ambulances, Ambulance Archer MSAs Health coverage tax credit, How To Take the Credit Medical expenses paid for decedent from, Decedent Artificial limbs, Artificial Limb Artificial teeth, Artificial Teeth Aspirin, Nonprescription Drugs and Medicines Assistance (see Tax help) Assisted living homes, Nursing Home Athletic club dues, Health Club Dues Automobiles (see Cars) B Baby sitting, Baby Sitting, Childcare, and Nursing Services for a Normal, Healthy Baby Bandages, Bandages Basis Medical equipment or property (Worksheet D), Worksheet D. H&r block military tax Adjusted Basis of Medical Equipment or Property Sold Birth control pills, Birth Control Pills Body scan, Body Scan Braille books and magazines, Braille Books and Magazines Breast pumps and supplies, Breast Pumps and Supplies Breast reconstruction surgery, Breast Reconstruction Surgery C Calculation of deduction, What If You Are Reimbursed for Medical Expenses You Did Not Deduct? Capital expenses, Capital Expenses Improvements to rented property, Improvements to property rented by a person with a disability. H&r block military tax Operation and upkeep, Operation and upkeep. H&r block military tax Worksheet A, Capital expense worksheet. H&r block military tax Cars, Car Out-of-pocket expenses, Car expenses. H&r block military tax Standard medical mileage rates, Car expenses. H&r block military tax Child care, Baby Sitting, Childcare, and Nursing Services for a Normal, Healthy Baby Children's medical expenses Adopted child, Adopted child. H&r block military tax Dependents, Dependent Chiropractor, Chiropractor Christian Scientist practitioner, Christian Science Practitioner Chronically ill persons, Chronically ill individual. H&r block military tax COBRA assistance Recapture of COBRA premium assistance, Worksheet F. H&r block military tax Recapture of COBRA Premium Assistance for Higher Income Taxpayers COBRA premium assistance, COBRA Premium Assistance Community property states, Community property states. H&r block military tax Computer banks to track medical information, Medical Information Plan Contact lenses, Contact Lenses Controlled substances, Controlled Substances Cosmetic surgery, Cosmetic Surgery Credit (see Health coverage tax credit) Crutches, Crutches D Dancing lessons, Dancing Lessons Decedent's medical expenses, Decedent, What if you pay medical expenses of a deceased spouse or dependent? Deductible amount, How Much of the Expenses Can You Deduct? Deductible expenses, Whose Medical Expenses Can You Include?, X-ray Definition of medical expenses Doctor, What Are Medical Expenses? Physician, What Are Medical Expenses? Dental treatment, Dental Treatment Artificial teeth, Artificial Teeth Teeth whitening, Teeth Whitening Dentures, Artificial Teeth Dependent's medical expenses Adopted child, Adopted child. H&r block military tax Multiple support agreement, Support claimed under a multiple support agreement. H&r block military tax Qualifying child, Dependent Qualifying relative, Dependent Dependents Disabled dependent care, Disabled Dependent Care Expenses, Dependents with disabilities. H&r block military tax Diagnostic devices, Diagnostic Devices Diaper services, Diaper Service Disabilities, persons with Dependent care expenses, Disabled Dependent Care Expenses, Dependents with disabilities. H&r block military tax Improvements to rented property, Improvements to property rented by a person with a disability. H&r block military tax Special education, Special Education Divorced taxpayers Medical expenses of child, Child of divorced or separated parents. H&r block military tax Drug addiction, Drug Addiction Drugs (see Medicines) Dues Health club, Health Club Dues E Education, special, Special Education Electrolysis, Cosmetic Surgery Employer-sponsored health insurance plans, Employer-Sponsored Health Insurance Plan Employment taxes, Employment taxes. H&r block military tax Excluded expenses Insurance premiums, Insurance Premiums You Cannot Include Eye surgery, Eye Surgery Eyeglasses, Eyeglasses F Fertility enhancement Eggs, temporary storage of, Fertility Enhancement Fertility, Fertility Enhancement In vitro fertilization, Fertility Enhancement Figuring the deduction, How Do You Figure and Report the Deduction on Your Tax Return? Final return for decedent Medical expenses paid, Decedent Flexible spending account, Flexible Spending Account Food (see Weight-loss programs) Form 1040 Health coverage tax credit, How To Take the Credit Self-employed persons, health insurance costs, Health Insurance Costs for Self-Employed Persons Form 1040, Schedule A Impairment-related work expenses, Where to report. H&r block military tax Medical and dental expenses, Introduction, What Tax Form Do You Use? Self-employed persons, health insurance costs, Health Insurance Costs for Self-Employed Persons Form 1040, Schedule C Impairment-related work expenses, Where to report. H&r block military tax Form 1040, Schedule C-EZ Impairment-related work expenses, Where to report. H&r block military tax Form 1040, Schedule E Impairment-related work expenses, Where to report. H&r block military tax Form 1040, Schedule F Impairment-related work expenses, Where to report. H&r block military tax Form 1040NR Health coverage tax credit, How To Take the Credit Form 1040X Amended return, What Expenses Can You Include This Year? Deceased taxpayer, What if the decedent's return had been filed and the medical expenses were not included? Form 1099-H Self-employed persons, health insurance costs, Health Insurance Costs for Self-Employed Persons Form 2106 Impairment-related work expenses, Where to report. H&r block military tax Form 2106-EZ Impairment-related work expenses, Where to report. H&r block military tax Form 2555 Self-employed persons, health insurance costs, Health Insurance Costs for Self-Employed Persons Form 2555-EZ Self-employed persons, health insurance costs, Health Insurance Costs for Self-Employed Persons Form 8453 Health coverage tax credit, How To Take the Credit Form 8885 Health coverage tax credit, How To Take the Credit Self-employed persons, health insurance costs, Health Insurance Costs for Self-Employed Persons Founder's fee (see Lifetime care, advance payments) Free tax services, Free help with your tax return. H&r block military tax Funeral expenses, Funeral Expenses Future medical care, Payments for future medical care. H&r block military tax , Future Medical Care G Glasses, Eyeglasses Guide dog or other animal, Guide Dog or Other Service Animal H Hair Removal, Cosmetic Surgery Transplants, Cosmetic Surgery Wigs, Wig Health club dues, Health Club Dues Health coverage tax credit, Health Coverage Tax Credit Advanced payments, Monthly HCTC Alternative TAA recipient, Health Coverage Tax Credit Archer MSAs, How To Take the Credit Both spouses eligible, Qualifying Family Member Children of divorced parents, Health Coverage Tax Credit, Qualifying Family Member Eligible coverage month, Eligible Coverage Month Insurance that covers other individuals, Insurance that covers other individuals. H&r block military tax Legally separated, Legally separated. H&r block military tax Married persons filing separate returns, Qualifying Family Member Monthly HCTC, Monthly HCTC Nonqualified health insurance, Nonqualified Health Insurance Other specified coverage Benefits from the Veterans Administration, Other Specified Coverage Pension Benefit Guaranty Corporation (PBGC) recipient, Health Coverage Tax Credit Qualified health insurance, Qualified Health Insurance Qualifying family member, Qualifying Family Member Reimbursement credit, Monthly HCTC Reporting, How To Take the Credit State-qualified health insurance, State-qualified health insurance. H&r block military tax TAA recipient, Health Coverage Tax Credit Yearly HCTC, Yearly HCTC Health Coverage Tax Credit Alternative TAA recipient, Who Can Take This Credit? PBGC pension payee, Who Can Take This Credit? TAA recipient, Who Can Take This Credit? Health institutes, Health Institute Health insurance Credit (see Health coverage tax credit) Employer-sponsored plan, Employer-Sponsored Health Insurance Plan Premiums Deductible, Insurance Premiums Nondeductible, Insurance Premiums You Cannot Include Paid by employer, Premiums paid by your employer. H&r block military tax Paid by employer and you, Premiums paid by you and your employer. H&r block military tax Paid by you, Premiums paid by you. H&r block military tax Prepaid, Prepaid Insurance Premiums Unused sick leave used to pay, Unused Sick Leave Used To Pay Premiums Reimbursements (see Reimbursements) Self-employed persons, Health Insurance Costs for Self-Employed Persons Health maintenance organizations (HMOs), Health Maintenance Organization (HMO) Health reimbursement arrangements (HRAs), Health reimbursement arrangement (HRA). H&r block military tax Health savings accounts (HSAs) Payments from, Health Savings Accounts Hearing aids, Hearing Aids Hearing-impaired persons Guide dog or other animal for, Guide Dog or Other Service Animal Help (see Tax help) HMOs (Health maintenance organizations), Health Maintenance Organization (HMO) Home care (see Nursing services) Home improvements (see Capital expenses:) Hospital services, Hospital Services Hotels, Lodging Household help, Household Help HRAs (Health reimbursement arrangements), Health reimbursement arrangement (HRA). H&r block military tax I Illegal operations and treatments, Illegal Operations and Treatments Illegal substances, Controlled Substances Impairment-related work expenses, Workers' compensation. H&r block military tax , Impairment-related expenses defined. H&r block military tax Reporting of, Where to report. H&r block military tax Insulin, Nonprescription Drugs and Medicines Insurance (see Health insurance) Intellectually and developmentally disabled persons Mentally retarded, Intellectually and Developmentally Disabled, Special Home for Special homes for, Intellectually and Developmentally Disabled, Special Home for L Laboratory fees, Laboratory Fees Lactation expenses (see Breast pumps and supplies) Laser eye surgery, Eye Surgery Lead-based paint removal, Lead-Based Paint Removal Learning disabilities, Special Education Legal fees, Legal Fees Lessons, dancing and swimming, Dancing Lessons Lifetime care Advance payments for, Lifetime Care—Advance Payments Lodging, Lodging, Trips (see also Trips) Long-term care, Long-Term Care Chronically ill individuals, Chronically ill individual. H&r block military tax Maintenance and personal care services, Maintenance and personal care services. H&r block military tax Qualified insurance contracts, Qualified Long-Term Care Insurance Contracts Qualified services, Qualified Long-Term Care Services M Maintenance and personal care services, Maintenance and personal care services. H&r block military tax Maternity clothes, Maternity Clothes Meals, Meals, Weight-Loss Program (see also Weight-loss programs) Medical conferences, Medical Conferences Medical equipment or property Adjusted basis (Worksheet D), Worksheet D. H&r block military tax Adjusted Basis of Medical Equipment or Property Sold Medical expense records, What Tax Form Do You Use? Medical information plans, Medical Information Plan Medical savings accounts (MSAs), Medical Savings Account (MSA) Medicare Medicare A, deductible expense, Medicare A Medicare B, deductible expense, Medicare B Medicare D, deductible expense, Medicare D Medicines, Medicines Imported, Imported medicines and drugs. H&r block military tax , Medicines and Drugs From Other Countries Nonprescription drugs and medicines, Nonprescription Drugs and Medicines Missing children, photographs of in IRS publications, Reminders Multiple support agreement, Support claimed under a multiple support agreement. H&r block military tax N Nondeductible expenses, What Expenses Are Not Includible?, Weight-Loss Program Nonprescription drugs and medicines, Nonprescription Drugs and Medicines Nursing homes, Nursing Home Nursing services, Nursing Services, Baby Sitting, Childcare, and Nursing Services for a Normal, Healthy Baby Chronically ill individuals, Chronically ill individual. H&r block military tax Nutritional supplements Natural medicines, Nutritional Supplements O Operations, Operations Cosmetic surgery, Cosmetic Surgery Eye surgery, Eye Surgery Illegal operations and treatments, Illegal Operations and Treatments Optometrist, Optometrist Optometrist services, Eyeglasses Organ donors, Transplants Osteopath, Osteopath Oxygen, Oxygen P Paint removal, for lead-based, Lead-Based Paint Removal Parking fees and tolls, Car expenses. H&r block military tax Personal injury damages, Damages for Personal Injuries Personal use items, Personal Use Items Photographs of missing children in IRS publications, Reminders Physical examination, Physical Examination Physical therapy, Therapy Plastic surgery, Cosmetic Surgery Pregnancy test kit, Pregnancy Test Kit Premiums (see Health insurance) Prepaid insurance premiums, Prepaid Insurance Premiums Prosthesis, Artificial Limb Psychiatric care, Psychiatric Care Psychoanalysis, Psychoanalysis Psychologists, Psychologist Publications (see Tax help) R Radial keratotomy, Eye Surgery Recordkeeping, What Tax Form Do You Use? Rehabilitation facilities, Nursing Home Reimbursements, How Do You Treat Reimbursements?, What If You Are Reimbursed for Medical Expenses You Did Not Deduct? Excess includible in income More than one policy (Worksheet C), More than one policy. H&r block military tax One policy (Worksheet B), Worksheet B. H&r block military tax Excess Reimbursement Includible in Income When You Have Only One Policy Excess may be taxable (Figure 1), What If Your Insurance Reimbursement Is More Than Your Medical Expenses? Health Reimbursement Arrangement (HRA), Health reimbursement arrangement (HRA). H&r block military tax Insurance, Insurance Reimbursement, What If Your Insurance Reimbursement Is More Than Your Medical Expenses? Medical expenses not deducted, What If You Receive Insurance Reimbursement in a Later Year? More than one policy, More than one policy. H&r block military tax Received in later year, What If You Are Reimbursed for Medical Expenses You Did Not Deduct? Rental property Improvements to, Improvements to property rented by a person with a disability. H&r block military tax Reporting Health coverage tax credit, How To Take the Credit Impairment-related work expenses, Where to report. H&r block military tax Medical and dental expenses, What If You Are Reimbursed for Medical Expenses You Did Not Deduct? Medical deduction (see Form 1040, Schedule A) Self-employed persons, health insurance costs, Health Insurance Costs for Self-Employed Persons S Sale of medical equipment or property, Sale of Medical Equipment or Property Adjusted basis (Worksheet D), Worksheet D. H&r block military tax Adjusted Basis of Medical Equipment or Property Sold Schedules (see Form 1040) Seeing-eye dogs, Guide Dog or Other Service Animal Self-employed persons Health coverage tax credit, How To Take the Credit Health insurance costs, Health Insurance Costs for Self-Employed Persons Senior housing, Nursing Home Separate returns Community property states, Community property states. H&r block military tax Medical and dental expenses, Separate returns. H&r block military tax Separated taxpayers Health coverage tax credit, Legally separated. H&r block military tax Medical expenses of child, Child of divorced or separated parents. H&r block military tax Service animals, Guide Dog or Other Service Animal Sick leave Used to pay health insurance premiums, Unused Sick Leave Used To Pay Premiums Special education, Special Education Spouse's medical expenses, Spouse Deceased spouse, What if you pay medical expenses of a deceased spouse or dependent? Sterilization, Sterilization Stop-smoking programs, Stop-Smoking Programs Surgery (see Operations) Swimming lessons, Dancing Lessons T Tables and figures Medical equipment or property Adjusted basis (Worksheet D), Worksheet D. H&r block military tax Adjusted Basis of Medical Equipment or Property Sold Reimbursements, excess includible in income More than one policy (Worksheet C), More than one policy. H&r block military tax One policy (Worksheet B), Worksheet B. H&r block military tax Excess Reimbursement Includible in Income When You Have Only One Policy Reimbursements, excess may be taxable (Figure 1), What If Your Insurance Reimbursement Is More Than Your Medical Expenses? Tax help, How To Get Tax Help Teeth Artificial, Artificial Teeth Dental treatment, Dental Treatment Whitening, Teeth Whitening Telephone, Telephone Television, Television Therapy, Therapy Transplants, Transplants Travel and transportation expenses, Transportation Car expenses, Car expenses. H&r block military tax Includible expenses, You can include:, Transportation expenses you cannot include. H&r block military tax Parking fees and tolls, Car expenses. H&r block military tax Trips, Trips TTY/TDD information, How To Get Tax Help Tuition, Tuition V Vasectomy, Vasectomy Veterinary fees, Veterinary Fees Vision correction surgery, Eye Surgery Visually impaired persons Guide dog or other animal for, Guide Dog or Other Service Animal Vitamins or minerals, Nutritional Supplements Voluntary Employee's Beneficiary Association (VEBA) Qualified health insurance, Voluntary Employee's Beneficiary Association (VEBA) W Weight-loss programs, Weight-Loss Program, Weight-Loss Program What's new COBRA continuous coverage, What's New Health coverage tax credit, What's New Standard medical mileage rate, What's New Wheelchairs, Wheelchair Wigs, Wig Work expenses Disabled dependent care, Disabled Dependent Care Expenses Impairment-related, Impairment-Related Work Expenses Workers' compensation, Workers' compensation. H&r block military tax Worksheets Capital expenses (Worksheet A), Capital expense worksheet. H&r block military tax Medical equipment or property Adjusted basis (Worksheet D), Worksheet D. H&r block military tax Adjusted Basis of Medical Equipment or Property Sold Reimbursements, excess includible in income More than one policy (Worksheet C), More than one policy. H&r block military tax One policy (Worksheet B), Worksheet B. H&r block military tax Excess Reimbursement Includible in Income When You Have Only One Policy X X-rays, X-ray Prev  Up     Home   More Online Publications