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Sample 1040x Filled Out

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Sample 1040x Filled Out

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

Sample 1040x filled out Publication 502 - Introductory Material Table of Contents What's New Reminders IntroductionOrdering forms and publications. Sample 1040x filled out Tax questions. Sample 1040x filled out Useful Items - You may want to see: What's New Medical and dental expenses. Sample 1040x filled out  Beginning January 1, 2013, you can deduct only the part of your medical and dental expenses that exceed 10% of your adjusted gross income (AGI) (7. Sample 1040x filled out 5% if either you or your spouse was born before January 2, 1949). Sample 1040x filled out Standard mileage rate. Sample 1040x filled out  The standard mileage rate allowed for operating expenses for a car when you use it for medical reasons is 24 cents per mile. Sample 1040x filled out See Transportation under What Medical Expenses Are Includible. Sample 1040x filled out Federal tax benefits for same-sex married couples. Sample 1040x filled out  For federal tax purposes, individuals of the same sex are considered married if they were lawfully married in a state (or foreign country) whose laws authorize the marriage of two individuals of the same sex, even if the state (or foreign country) in which they now live does not recognize same-sex marriage. Sample 1040x filled out For more information, see Publication 501, Exemptions, Standard Deduction, and Filing Information. Sample 1040x filled out Reminders Future developments. Sample 1040x filled out   For the latest information about developments related to Publication 502, such as legislation enacted after it was published, go to www. Sample 1040x filled out irs. Sample 1040x filled out gov/pub502. Sample 1040x filled out Photographs of missing children. Sample 1040x filled out  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Sample 1040x filled out Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Sample 1040x filled out You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Sample 1040x filled out Introduction This publication explains the itemized deduction for medical and dental expenses that you claim on Schedule A (Form 1040). Sample 1040x filled out It discusses what expenses, and whose expenses, you can and cannot include in figuring the deduction. Sample 1040x filled out It explains how to treat reimbursements and how to figure the deduction. Sample 1040x filled out It also tells you how to report the deduction on your tax return and what to do if you sell medical property or receive damages for a personal injury. Sample 1040x filled out Medical expenses include dental expenses, and in this publication the term “medical expenses” is often used to refer to medical and dental expenses. Sample 1040x filled out You can deduct on Schedule A (Form 1040) only the part of your medical and dental expenses that is more than 10% of your adjusted gross income (AGI). Sample 1040x filled out But if either you or your spouse was born before January 2, 1949, you can deduct the amount of your medical and dental expenses that is more than 7. Sample 1040x filled out 5% of your AGI. Sample 1040x filled out If your medical and dental expenses are not more than 10% of your AGI (7. Sample 1040x filled out 5% if either you or your spouse was born before January 2, 1949), you cannot claim a deduction. Sample 1040x filled out This publication also explains how to treat impairment-related work expenses, health insurance premiums if you are self-employed, and the health coverage tax credit that is available to certain individuals. Sample 1040x filled out Pub. Sample 1040x filled out 502 covers many common medical expenses but not every possible medical expense. Sample 1040x filled out If you cannot find the expense you are looking for, refer to the definition of medical expenses under What Are Medical Expenses . Sample 1040x filled out See How To Get Tax Help near the end of this publication for information about getting publications and forms. Sample 1040x filled out Comments and suggestions. Sample 1040x filled out   We welcome your comments about this publication and your suggestions for future editions. Sample 1040x filled out   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Sample 1040x filled out NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Sample 1040x filled out Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Sample 1040x filled out   You can send your comments from www. Sample 1040x filled out irs. Sample 1040x filled out gov/formspubs. Sample 1040x filled out Click on “More Information” and then on “Comment on Tax Forms and Publications. Sample 1040x filled out ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Sample 1040x filled out Ordering forms and publications. Sample 1040x filled out   Visit www. Sample 1040x filled out irs. Sample 1040x filled out gov/formspubs to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Sample 1040x filled out Internal Revenue Service 1201 N. Sample 1040x filled out Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Sample 1040x filled out   If you have a tax question, check the information available on IRS. Sample 1040x filled out gov or call 1-800-829-1040. Sample 1040x filled out We cannot answer tax questions sent to either of the above addresses. Sample 1040x filled out Useful Items - You may want to see: Publication 969 Health Savings Accounts and Other Tax-Favored Health Plans Forms (and Instructions) 1040 U. Sample 1040x filled out S. Sample 1040x filled out Individual Income Tax Return Schedule A (Form 1040) Itemized Deductions 8885 Health Coverage Tax Credit Prev  Up  Next   Home   More Online Publications