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Irs Gov Forms

How To File Tax ExtensionHow Do You Amend A Tax ReturnInstructions For Form 1040ezAmended Tax ReturnsFile Taxes 20082012 Irs Form 1040 EzH & R Block Free Tax FilingNeed To Do 2011 Taxes2010 Income Tax Forms 1040ezFile 2007 Federal Taxes FreeAmendment FormFree Income Tax Filing1040ez Tax Booklet1040vIrs Income Tax Forms 2010Free 2012 E FileHow To File 1040nr EzHandr BlockIrs Tax Form 1040xE File State Tax1040nr FormFree State Tax E FileIrs File 1040ezHow Do I File An Amended Tax ReturnWhat Can I Write Off On My Taxes As A StudentHow To File Taxes On UnemploymentFreetaxusa 2012Irs Gov Free File Federal And State Taxes2007 Taxes OnlineFile 1040ez1040 Ez Instructions1040a 2012 Tax FormFree E File Federal And State Tax ReturnFiling Taxes 2010 Online1040x Amended Tax FormAmend State Tax ReturnH&r Block Basic2012 Federal And State Tax Forms2010 Tax Forms 1040aFree Turbo Tax 2008

Irs Gov Forms

Irs gov forms Publication 597 - Introductory Material Table of Contents Introduction Introduction This publication provides information on the income tax treaty between the United States and Canada. Irs gov forms It discusses a number of treaty provisions that often apply to U. Irs gov forms S. Irs gov forms citizens or residents who may be liable for Canadian tax. Irs gov forms Treaty provisions are generally reciprocal (the same rules apply to both treaty countries). Irs gov forms Therefore, a Canadian resident who receives income from the United States may refer to this publication to see if a treaty provision may affect the tax to be paid to the United States. Irs gov forms This publication does not deal with Canadian income tax laws; nor does it provide Canada's interpretation of treaty articles, definitions, or specific terms not defined in the treaty itself. Irs gov forms The United States—Canada income tax treaty was signed on September 26, 1980. Irs gov forms It has been amended by five protocols, the most recent of which generally became effective January 1, 2009. Irs gov forms In this publication, the term “article” refers to the particular article of the treaty, as amended. Irs gov forms Prev  Up  Next   Home   More Online Publications
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Contact My Local Office in Illinois

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City Street Address Days/Hours of Service Telephone*
Bloomington 301 S. Prospect Rd.
Bloomington, IL 61704

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:30 a.m.-12:30 p.m.)

 

Services Provided

(309) 661-0032
Champaign 310 W. Church St.
Champaign, IL 61820

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:30 a.m.-12:30 p.m.)

 

Services Provided

(217) 398-5210
Chicago 230 S. Dearborn St.
Chicago, IL 60604

Monday-Friday - 8:30 a.m.-4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**


Services Provided

(312) 292-4912
Decatur 306 W. Eldorado
Decatur, IL 62522

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:30 a.m.-12:30 p.m.)
 

Services Provided

(217) 862-6015
Downers Grove 2001 Butterfield Rd.
Downers Grove, IL 60515

Monday-Friday - 8:30 a.m.-4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(630) 493-5291
Fairview Heights 380 Fountain Office Court
Fairview Heights, IL 62208

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:30 a.m.-12:30 p.m.)

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(618) 632-2567
Galesburg 2066 Windish Dr.
Galesburg, IL 61401 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:30 a.m.-12:30 p.m.)

 

Services Provided

(309) 345-4158 
Mt. Vernon  105 S. Sixth St.
Mt. Vernon, IL 62864 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:30 a.m.-12:30 p.m.) 

 

**This office will be closed on 3/31**

 

Services Provided

(618) 632-2567 
Orland Park  14479 John Humphrey Drive,
Orland Park, IL 60462 

Monday-Friday - 8:30 a.m. - 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(708) 873-8310 
Peoria  2415 West Cornerstone Ct.
Peoria, IL 61614 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:30 a.m.-12:30 p.m.)

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(309) 671-7264 
Quincy  3701 East Lake Centre Drive,
Quincy, IL 62305 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 11:30 a.m.-12:30 p.m.) 

 

Services Provided

(217) 224-8208 
Rockford  211 S. Court St.
Rockford, IL 61101 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:00 noon - 1:00 p.m.) 

 

Services Provided

(815) 334-7026 
Schiller Park  5100 River Road
Schiller Park, IL 60176 

Monday-Friday - 8:30 a.m.-4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**
 

Services Provided

(847) 671-7541 
Springfield  3101 Constitution Drive
Springfield, IL 62704 

Monday-Friday - 8:30 a.m.-4:30 p.m. 
 

Services Provided

(217) 862-6015 

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call 312-292-3800 in Chicago or (217) 862-6382 in Springfield, or 1-877-777-4778 elsewhere, or see Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see  Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
230 S. Dearborn St.
Room 2400, Stop 6604-CHI
Chicago, IL 60604

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The Irs Gov Forms

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