File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

File 2012 Taxes For Free

2011 Tax Forms And Instructions 1040Hr Block Free Tax FilingIrs Gov FormsH And R Block LoginFree State Filing TurbotaxE File 1040ezTax Amend Form1040x Tax Form 2011File 2010 Income TaxDownload 1040x FormDownload 1040ez Federal Tax FormFile Taxes For 2011Turbotax 2012File 2007 Fed Income Tax2011 E File1090 EzIrs Amended Return2012 Tax Return Forms1040ez 2012 Fillable Form1040 2010How Do I Complete A 1040x FormsFree Taxes OnlineAmending Taxes OnlineH R Block Tax Preparation2010 Tax FormsTax Forms 1040ezTax Extension Online Free2012 Tax Return FilingWhere Can I File 2011 Taxes For FreeTurbotax040ez2010 Federal Tax FormsTax Forms Federal And StateI Need To File 2011 Tax Return2011 Tax Form 1040ezWww Irs Gov 2012 Tax FormsTaxact 2008 Free EfileDownload Irs Form 1040xHrblockfreetaxFederal Income Tax Forms

File 2012 Taxes For Free

File 2012 taxes for free Tax Changes for Individuals Table of Contents 2001 ChangesNew 5-Year Carryback Rule for Net Operating Losses (NOLs) Wash Sale Rules Do Not Apply to Section 1256 Contracts Other 2001 Changes 2002 ChangesDeduction for Educator Expenses Personal Credits Still Allowed Against Alternative Minimum Tax Later ChangeChild and Dependent Care Expenses 2001 Changes New 5-Year Carryback Rule for Net Operating Losses (NOLs) If you have an NOL from a tax year ending during 2001 or 2002, you must generally carry back the entire amount of the NOL to the 5 tax years before the NOL year (the carryback period). File 2012 taxes for free However, you can still choose to use the previous carryback period. File 2012 taxes for free You also can choose not to carry back an NOL and only carry it forward. File 2012 taxes for free Individuals, estates, and trusts can file Form 1045, Application for Tentative Refund. File 2012 taxes for free The instructions for this form will be revised to reflect the new law. File 2012 taxes for free Wash Sale Rules Do Not Apply to Section 1256 Contracts The wash sale rules that generally apply to losses from the sale of stock or securities, do not apply to any loss arising from a section 1256 contract. File 2012 taxes for free A section 1256 contract is any: Regulated futures contract, Foreign currency contract, Nonequity option, Dealer equity option, or Dealer securities futures contract. File 2012 taxes for free Wash sales and section 1256 contracts are explained in detail in Publication 550, Investment Income and Expenses. File 2012 taxes for free Other 2001 Changes Other changes are discussed in the following chapters. File 2012 taxes for free Chapter 4 Car Expenses Chapter 5 Depreciation 2002 Changes Deduction for Educator Expenses If you are an eligible educator, you can deduct as an adjustment to income up to $250 in qualified expenses. File 2012 taxes for free You can deduct these expenses even if you do not itemize deductions on Schedule A (Form 1040). File 2012 taxes for free This adjustment to income is for expenses paid or incurred in tax years beginning during 2002 or 2003. File 2012 taxes for free Previously, these expenses were deductible only as a miscellaneous itemized deduction subject to the 2% of adjusted gross income limit. File 2012 taxes for free Eligible educator. File 2012 taxes for free   You are an eligible educator if, for the tax year, you meet the following requirements. File 2012 taxes for free You are a kindergarten through grade 12: Teacher, Instructor, Counselor, Principal, or Aide. File 2012 taxes for free You work at least 900 hours during a school year in a school that provides elementary or secondary education, as determined under state law. File 2012 taxes for free Qualified expenses. File 2012 taxes for free   These are unreimbursed expenses you paid or incurred for books, supplies, computer equipment (including related software and services), other equipment, and supplementary materials that you use in the classroom. File 2012 taxes for free For courses in health and physical education, expenses for supplies are qualified expenses only if they are related to athletics. File 2012 taxes for free   To be deductible as an adjustment to income, the qualified expenses must be more than the following amounts for the tax year. File 2012 taxes for free The interest on qualified U. File 2012 taxes for free S. File 2012 taxes for free savings bonds that you excluded from income because you paid qualified higher education expenses, Any distribution from a qualified tuition program that you excluded from income, or Any tax-free withdrawals from your Coverdell education savings account. File 2012 taxes for free Personal Credits Still Allowed Against Alternative Minimum Tax The provision that allowed certain nonrefundable personal credits to reduce both your regular tax and any alternative minimum tax (AMT) has been extended and will be in effect for 2002 and 2003. File 2012 taxes for free This provision, as it applies to the AMT, was originally scheduled to expire after 2001. File 2012 taxes for free Without the extension, these credits could not have been used to reduce any AMT in 2002 or 2003. File 2012 taxes for free Later Change Child and Dependent Care Expenses For the purpose of figuring the child and dependent care credit, your spouse is treated as having at least a minimum amount of earned income for any month that he or she is a full-time student or not able to care for himself or herself. File 2012 taxes for free Beginning in 2003, this amount is increased to $250 a month if there is one qualifying person and to $500 a month if there are two or more qualifying persons. File 2012 taxes for free Before 2003, the amounts were $200 and $400. File 2012 taxes for free The same rule applies for the exclusion of employer-provided dependent care benefits. File 2012 taxes for free For more information about the credit and exclusion, see Publication 503, Child and Dependent Care Expenses. File 2012 taxes for free Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Tax Relief for Victims of Flooding in Alaska

AK-2013-10, June 28, 2013

ANCHORAGE — Victims of flooding that began on May 17, 2013 in parts of Alaska may qualify for tax relief from the Internal Revenue Service.

The President has declared the Alaskan Gateway Regional Education Attendance Area (REAA), Lower Yukon REAA, Yukon Flats REAA and Yukon Koyukuk REAA a federal disaster area. Individuals who reside or have a business in these areas may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after May 17, and on or before July 16, have been postponed to July 16, 2013. This includes the June 17 deadline for second quarter estimated tax payments.

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after May 17, and on or before June 3, as long as the deposits are made by June 3, 2013.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 866-562-5227 to request this tax relief.

Covered Disaster Area

The areas listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until July 16 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after May 17 and on or before July 16.

The IRS also gives affected taxpayers until July 16 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after May 17 and on or before July 16.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after May 17 and on or before June 3 provided the taxpayer makes these deposits by June 3.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “Alaska/Flooding” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 800-TAX-FORM (800-829-3676). The IRS toll-free number for general tax questions is 800-829-1040.

Related Information

Disaster Assistance and Emergency Relief for Individuals and Businesses

Recent IRS Disaster Relief Announcements

Page Last Reviewed or Updated: 28-Jun-2013

The File 2012 Taxes For Free

File 2012 taxes for free 23. File 2012 taxes for free   Interest Expense Table of Contents Introduction Useful Items - You may want to see: Home Mortgage InterestAmount Deductible Points Mortgage Insurance Premiums Form 1098, Mortgage Interest Statement Investment InterestInvestment Property Allocation of Interest Expense Limit on Deduction Items You Cannot DeductPersonal Interest Allocation of Interest How To ReportMore than one borrower. File 2012 taxes for free Mortgage proceeds used for business or investment. File 2012 taxes for free Introduction This chapter discusses what interest expenses you can deduct. File 2012 taxes for free Interest is the amount you pay for the use of borrowed money. File 2012 taxes for free The following are types of interest you can deduct as itemized deductions on Schedule A (Form 1040). File 2012 taxes for free Home mortgage interest, including certain points and mortgage insurance premiums. File 2012 taxes for free Investment interest. File 2012 taxes for free This chapter explains these deductions. File 2012 taxes for free It also explains where to deduct other types of interest and lists some types of interest you cannot deduct. File 2012 taxes for free Use Table 23-1 to find out where to get more information on various types of interest, including investment interest. File 2012 taxes for free Useful Items - You may want to see: Publication 936 Home Mortgage Interest Deduction 550 Investment Income and Expenses Home Mortgage Interest Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). File 2012 taxes for free The loan may be a mortgage to buy your home, a second mortgage, a line of credit, or a home equity loan. File 2012 taxes for free You can deduct home mortgage interest if all the following conditions are met. File 2012 taxes for free You file Form 1040 and itemize deductions on Schedule A (Form 1040). File 2012 taxes for free The mortgage is a secured debt on a qualified home in which you have an ownership interest. File 2012 taxes for free (Generally, your mortgage is a secured debt if you put your home up as collateral to protect the interest of the lender. File 2012 taxes for free The term “qualified home” means your main home or second home. File 2012 taxes for free For details, see Publication 936. File 2012 taxes for free )  Both you and the lender must intend that the loan be repaid. File 2012 taxes for free Amount Deductible In most cases, you can deduct all of your home mortgage interest. File 2012 taxes for free How much you can deduct depends on the date of the mortgage, the amount of the mortgage, and how you use the mortgage proceeds. File 2012 taxes for free Fully deductible interest. File 2012 taxes for free   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. File 2012 taxes for free (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. File 2012 taxes for free )   The three categories are as follows: Mortgages you took out on or before October 13, 1987 (called grandfathered debt). File 2012 taxes for free 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). File 2012 taxes for free 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). File 2012 taxes for free The dollar limits for the second and third categories apply to the combined mortgages on your main home and second home. File 2012 taxes for free   See Part II of Publication 936 for more detailed definitions of grandfathered, home acquisition, and home equity debt. File 2012 taxes for free    You can use Figure 23-A to check whether your home mortgage interest is fully deductible. File 2012 taxes for free Figure 23-A. File 2012 taxes for free Is My Home Mortgage Interest Fully Deductible? Please click here for the text description of the image. File 2012 taxes for free Figure 23-A. File 2012 taxes for free Is My Interest Fully Deductible? Limits on deduction. File 2012 taxes for free   You cannot fully deduct interest on a mortgage that does not fit into any of the three categories listed earlier. File 2012 taxes for free If this applies to you, see Part II of Publication 936 to figure the amount of interest you can deduct. File 2012 taxes for free Special Situations This section describes certain items that can be included as home mortgage interest and others that cannot. File 2012 taxes for free It also describes certain special situations that may affect your deduction. File 2012 taxes for free Late payment charge on mortgage payment. File 2012 taxes for free   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. File 2012 taxes for free Mortgage prepayment penalty. File 2012 taxes for free   If you pay off your home mortgage early, you may have to pay a penalty. File 2012 taxes for free 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. File 2012 taxes for free Sale of home. File 2012 taxes for free   If you sell your home, you can deduct your home mortgage interest (subject to any limits that apply) paid up to, but not including, the date of sale. File 2012 taxes for free Example. File 2012 taxes for free John and Peggy Harris sold their home on May 7. File 2012 taxes for free Through April 30, they made home mortgage interest payments of $1,220. File 2012 taxes for free 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. File 2012 taxes for free Their mortgage interest deduction is $1,270 ($1,220 + $50). File 2012 taxes for free Prepaid interest. File 2012 taxes for free   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. File 2012 taxes for free You can deduct in each year only the interest that qualifies as home mortgage interest for that year. File 2012 taxes for free However, there is an exception that applies to points, discussed later. File 2012 taxes for free Mortgage interest credit. File 2012 taxes for free   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. File 2012 taxes for free Figure the credit on Form 8396, Mortgage Interest Credit. File 2012 taxes for free If you take this credit, you must reduce your mortgage interest deduction by the amount of the credit. File 2012 taxes for free   For more information on the credit, see chapter 37. File 2012 taxes for free Ministers' and military housing allowance. File 2012 taxes for free   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. File 2012 taxes for free Hardest Hit Fund and Emergency Homeowners' Loan Programs. File 2012 taxes for free   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. File 2012 taxes for free 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. File 2012 taxes for free 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. File 2012 taxes for free If you meet these tests, then you can deduct all of the payments you actually made during the year to your mortgage servicer, the State HFA, or HUD on the home mortgage (including the amount shown on box 3 of Form 1098-MA, Mortgage Assistance Payments), but not more than the sum of the amounts shown on Form 1098, Mortgage Interest Statement, in box 1 (mortgage interest received from payer(s) / borrower(s)), box 4 (mortgage insurance premiums) and box 5 (real property taxes). File 2012 taxes for free 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. File 2012 taxes for free Mortgage assistance payments under section 235 of the National Housing Act. File 2012 taxes for free   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. File 2012 taxes for free You cannot deduct the interest that is paid for you. File 2012 taxes for free No other effect on taxes. File 2012 taxes for free   Do not include these mortgage assistance payments in your income. File 2012 taxes for free Also, do not use these payments to reduce other deductions, such as real estate taxes. File 2012 taxes for free Divorced or separated individuals. File 2012 taxes for free   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. File 2012 taxes for free See the discussion of Payments for jointly-owned home in chapter 18. File 2012 taxes for free Redeemable ground rents. File 2012 taxes for free   If you make annual or periodic rental payments on a redeemable ground rent, you can deduct them as mortgage interest. File 2012 taxes for free   Payments made to end the lease and to buy the lessor's entire interest in the land are not deductible as mortgage interest. File 2012 taxes for free For more information, see Publication 936. File 2012 taxes for free Nonredeemable ground rents. File 2012 taxes for free   Payments on a nonredeemable ground rent are not mortgage interest. File 2012 taxes for free You can deduct them as rent if they are a business expense or if they are for rental property. File 2012 taxes for free Reverse mortgages. File 2012 taxes for free   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. File 2012 taxes for free With a reverse mortgage, you retain title to your home. File 2012 taxes for free 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. File 2012 taxes for free Because reverse mortgages are considered loan advances and not income, the amount you receive is not taxable. File 2012 taxes for free Any interest (including original issue discount) accrued on a reverse mortgage is not deductible until the loan is paid in full. File 2012 taxes for free Your deduction may be limited because a reverse mortgage loan generally is subject to the limit on Home Equity Debt discussed in Publication 936. File 2012 taxes for free Rental payments. File 2012 taxes for free   If you live in a house before final settlement on the purchase, any payments you make for that period are rent and not interest. File 2012 taxes for free This is true even if the settlement papers call them interest. File 2012 taxes for free You cannot deduct these payments as home mortgage interest. File 2012 taxes for free Mortgage proceeds invested in tax-exempt securities. File 2012 taxes for free   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. File 2012 taxes for free “Grandfathered debt” and “home equity debt” are defined earlier under Amount Deductible. File 2012 taxes for free Refunds of interest. File 2012 taxes for free   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. File 2012 taxes for free 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. File 2012 taxes for free However, you need to include it only up to the amount of the deduction that reduced your tax in the earlier year. File 2012 taxes for free This is true whether the interest overcharge was refunded to you or was used to reduce the outstanding principal on your mortgage. File 2012 taxes for free    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. File 2012 taxes for free For information about Form 1098, see Form 1098, Mortgage Interest Statement , later. File 2012 taxes for free   For more information on how to treat refunds of interest deducted in earlier years, see Recoveries in chapter 12. File 2012 taxes for free Points The term “points” is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. File 2012 taxes for free Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points. File 2012 taxes for free A borrower is treated as paying any points that a home seller pays for the borrower's mortgage. File 2012 taxes for free See Points paid by the seller , later. File 2012 taxes for free General Rule You generally cannot deduct the full amount of points in the year paid. File 2012 taxes for free Because they are prepaid interest, you generally deduct them ratably over the life (term) of the mortgage. File 2012 taxes for free See Deduction Allowed Ratably , next. File 2012 taxes for free For exceptions to the general rule, see Deduction Allowed in Year Paid , later. File 2012 taxes for free 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. File 2012 taxes for free You use the cash method of accounting. File 2012 taxes for free This means you report income in the year you receive it and deduct expenses in the year you pay them. File 2012 taxes for free Most individuals use this method. File 2012 taxes for free Your loan is secured by a home. File 2012 taxes for free (The home does not need to be your main home. File 2012 taxes for free ) Your loan period is not more than 30 years. File 2012 taxes for free 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. File 2012 taxes for free 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. File 2012 taxes for free Deduction Allowed in Year Paid You can fully deduct points in the year paid if you meet all the following tests. File 2012 taxes for free (You can use Figure 23-B as a quick guide to see whether your points are fully deductible in the year paid. File 2012 taxes for free ) Your loan is secured by your main home. File 2012 taxes for free (Your main home is the one you ordinarily live in most of the time. File 2012 taxes for free ) Paying points is an established business practice in the area where the loan was made. File 2012 taxes for free The points paid were not more than the points generally charged in that area. File 2012 taxes for free You use the cash method of accounting. File 2012 taxes for free This means you report income in the year you receive it and deduct expenses in the year you pay them. File 2012 taxes for free (If you want more information about this method, see Accounting Methods in chapter 1. File 2012 taxes for free ) 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. File 2012 taxes for free The funds you provided at or before closing, plus any points the seller paid, were at least as much as the points charged. File 2012 taxes for free The funds you provided are not required to have been applied to the points. File 2012 taxes for free They can include a down payment, an escrow deposit, earnest money, and other funds you paid at or before closing for any purpose. File 2012 taxes for free You cannot have borrowed these funds from your lender or mortgage broker. File 2012 taxes for free You use your loan to buy or build your main home. File 2012 taxes for free The points were computed as a percentage of the principal amount of the mortgage. File 2012 taxes for free The amount is clearly shown on the settlement statement (such as the Settlement Statement, Form HUD-1) as points charged for the mortgage. File 2012 taxes for free The points may be shown as paid from either your funds or the seller's. File 2012 taxes for free Figure 23-B. File 2012 taxes for free Are My Points Fully Deductible This Year? Please click here for the text description of the image. File 2012 taxes for free Figure 23-B. File 2012 taxes for free Are My Points Fully Deductible This Year? Note. File 2012 taxes for free 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. File 2012 taxes for free Home improvement loan. File 2012 taxes for free   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. File 2012 taxes for free Second home. File 2012 taxes for free You cannot fully deduct in the year paid points you pay on loans secured by your second home. File 2012 taxes for free You can deduct these points only over the life of the loan. File 2012 taxes for free Refinancing. File 2012 taxes for free   Generally, points you pay to refinance a mortgage are not deductible in full in the year you pay them. File 2012 taxes for free This is true even if the new mortgage is secured by your main home. File 2012 taxes for free   However, if you use part of the refinanced mortgage proceeds to improve your main home and you meet the first 6 tests listed under Deduction Allowed in Year Paid , earlier, you can fully deduct the part of the points related to the improvement in the year you paid them with your own funds. File 2012 taxes for free You can deduct the rest of the points over the life of the loan. File 2012 taxes for free Example 1. File 2012 taxes for free In 1998, Bill Fields got a mortgage to buy a home. File 2012 taxes for free In 2013, Bill refinanced that mortgage with a 15-year $100,000 mortgage loan. File 2012 taxes for free The mortgage is secured by his home. File 2012 taxes for free To get the new loan, he had to pay three points ($3,000). File 2012 taxes for free 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. File 2012 taxes for free Bill paid the points out of his private funds, rather than out of the proceeds of the new loan. File 2012 taxes for free The payment of points is an established practice in the area, and the points charged are not more than the amount generally charged there. File 2012 taxes for free Bill's first payment on the new loan was due July 1. File 2012 taxes for free He made six payments on the loan in 2013 and is a cash basis taxpayer. File 2012 taxes for free Bill used the funds from the new mortgage to repay his existing mortgage. File 2012 taxes for free 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. File 2012 taxes for free He cannot deduct all of the points in 2013. File 2012 taxes for free He can deduct two points ($2,000) ratably over the life of the loan. File 2012 taxes for free He deducts $67 [($2,000 ÷ 180 months) × 6 payments] of the points in 2013. File 2012 taxes for free The other point ($1,000) was a fee for services and is not deductible. File 2012 taxes for free Example 2. File 2012 taxes for free 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. File 2012 taxes for free Bill deducts 25% ($25,000 ÷ $100,000) of the points ($2,000) in 2013. File 2012 taxes for free His deduction is $500 ($2,000 × 25%). File 2012 taxes for free Bill also deducts the ratable part of the remaining $1,500 ($2,000 − $500) that must be spread over the life of the loan. File 2012 taxes for free This is $50 [($1,500 ÷ 180 months) × 6 payments] in 2013. File 2012 taxes for free The total amount Bill deducts in 2013 is $550 ($500 + $50). File 2012 taxes for free Special Situations This section describes certain special situations that may affect your deduction of points. File 2012 taxes for free Original issue discount. File 2012 taxes for free   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. File 2012 taxes for free This reduction results in original issue discount, which is discussed in chapter 4 of Publication 535. File 2012 taxes for free Amounts charged for services. File 2012 taxes for free   Amounts charged by the lender for specific services connected to the loan are not interest. File 2012 taxes for free Examples of these charges are: Appraisal fees, Notary fees, and Preparation costs for the mortgage note or deed of trust. File 2012 taxes for free You cannot deduct these amounts as points either in the year paid or over the life of the mortgage. File 2012 taxes for free Points paid by the seller. File 2012 taxes for free   The term “points” includes loan placement fees that the seller pays to the lender to arrange financing for the buyer. File 2012 taxes for free Treatment by seller. File 2012 taxes for free   The seller cannot deduct these fees as interest. File 2012 taxes for free But they are a selling expense that reduces the amount realized by the seller. File 2012 taxes for free See chapter 15 for information on selling your home. File 2012 taxes for free Treatment by buyer. File 2012 taxes for free    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. File 2012 taxes for free If all the tests under Deduction Allowed in Year Paid , earlier, are met, the buyer can deduct the points in the year paid. File 2012 taxes for free If any of those tests are not met, the buyer deducts the points over the life of the loan. File 2012 taxes for free   For information about basis, see chapter 13. File 2012 taxes for free Funds provided are less than points. File 2012 taxes for free   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. File 2012 taxes for free In addition, you can deduct any points paid by the seller. File 2012 taxes for free Example 1. File 2012 taxes for free When you took out a $100,000 mortgage loan to buy your home in December, you were charged one point ($1,000). File 2012 taxes for free You meet all the tests for deducting points in the year paid, except the only funds you provided were a $750 down payment. File 2012 taxes for free Of the $1,000 charged for points, you can deduct $750 in the year paid. File 2012 taxes for free You spread the remaining $250 over the life of the mortgage. File 2012 taxes for free Example 2. File 2012 taxes for free 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. File 2012 taxes for free In the year paid, you can deduct $1,750 ($750 of the amount you were charged plus the $1,000 paid by the seller). File 2012 taxes for free You spread the remaining $250 over the life of the mortgage. File 2012 taxes for free You must reduce the basis of your home by the $1,000 paid by the seller. File 2012 taxes for free Excess points. File 2012 taxes for free   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. File 2012 taxes for free You must spread any additional points over the life of the mortgage. File 2012 taxes for free Mortgage ending early. File 2012 taxes for free   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. File 2012 taxes for free However, if you refinance the mortgage with the same lender, you cannot deduct any remaining balance of spread points. File 2012 taxes for free Instead, deduct the remaining balance over the term of the new loan. File 2012 taxes for free    A mortgage may end early due to a prepayment, refinancing, foreclosure, or similar event. File 2012 taxes for free Example. File 2012 taxes for free Dan paid $3,000 in points in 2002 that he had to spread out over the 15-year life of the mortgage. File 2012 taxes for free He deducts $200 points per year. File 2012 taxes for free Through 2012, Dan has deducted $2,200 of the points. File 2012 taxes for free Dan prepaid his mortgage in full in 2013. File 2012 taxes for free He can deduct the remaining $800 of points in 2013. File 2012 taxes for free Limits on deduction. File 2012 taxes for free   You cannot fully deduct points paid on a mortgage unless the mortgage fits into one of the categories listed earlier under Fully deductible interest . File 2012 taxes for free See Publication 936 for details. File 2012 taxes for free Mortgage Insurance Premiums You can treat amounts you paid during 2013 for qualified mortgage insurance as home mortgage interest. File 2012 taxes for free The insurance must be in connection with home acquisition debt and the insurance contract must have been issued after 2006. File 2012 taxes for free Qualified mortgage insurance. File 2012 taxes for free   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). File 2012 taxes for free   Mortgage insurance provided by the Department of Veterans Affairs is commonly known as a funding fee. File 2012 taxes for free If provided by the Rural Housing Service, it is commonly known as a guarantee fee. File 2012 taxes for free These fees can be deducted fully in 2013 if the mortgage insurance contract was issued in 2013. File 2012 taxes for free Contact the mortgage insurance issuer to determine the deductible amount if it is not reported in box 4 of Form 1098. File 2012 taxes for free Special rules for prepaid mortgage insurance. File 2012 taxes for free   Generally, if you paid premiums for qualified mortgage insurance that are allocable to periods after the close of the tax year, such premiums are treated as paid in the period to which they are allocated. File 2012 taxes for free 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. File 2012 taxes for free No deduction is allowed for the unamortized balance if the mortgage is satisfied before its term. File 2012 taxes for free This paragraph does not apply to qualified mortgage insurance provided by the Department of Veterans Affairs or the Rural Housing Service. File 2012 taxes for free See the Example below. File 2012 taxes for free Example. File 2012 taxes for free Ryan purchased a home in May of 2012 and financed the home with a 15-year mortgage. File 2012 taxes for free Ryan also prepaid all of the $9,240 in private mortgage insurance required at the time of closing in May. File 2012 taxes for free 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. File 2012 taxes for free Ryan's adjusted gross income (AGI) for 2012 is $76,000. File 2012 taxes for free Ryan can deduct $880 ($9,240 ÷ 84 × 8 months) for qualified mortgage insurance premiums in 2012. File 2012 taxes for free For 2013, Ryan can deduct $1,320 ($9,240 ÷ 84 × 12 months) if his AGI is $100,000 or less. File 2012 taxes for free 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). File 2012 taxes for free Limit on deduction. File 2012 taxes for free   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. File 2012 taxes for free 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. File 2012 taxes for free If your adjusted gross income is more than $109,000 ($54,500 if married filing separately), you cannot deduct your mortgage insurance premiums. File 2012 taxes for free 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. File 2012 taxes for free You will receive the statement if you pay interest to a person (including a financial institution or a cooperative housing corporation) in the course of that person's trade or business. File 2012 taxes for free A governmental unit is a person for purposes of furnishing the statement. File 2012 taxes for free The statement for each year should be sent to you by January 31 of the following year. File 2012 taxes for free A copy of this form will also be sent to the IRS. File 2012 taxes for free 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. File 2012 taxes for free However, it should not show any interest that was paid for you by a government agency. File 2012 taxes for free As a general rule, Form 1098 will include only points that you can fully deduct in the year paid. File 2012 taxes for free However, certain points not included on Form 1098 also may be deductible, either in the year paid or over the life of the loan. File 2012 taxes for free See Points , earlier, to determine whether you can deduct points not shown on Form 1098. File 2012 taxes for free Prepaid interest on Form 1098. File 2012 taxes for free   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. File 2012 taxes for free However, you cannot deduct the prepaid amount for January 2014 in 2013. File 2012 taxes for free (See Prepaid interest , earlier. File 2012 taxes for free ) You will have to figure the interest that accrued for 2014 and subtract it from the amount in box 1. File 2012 taxes for free You will include the interest for January 2014 with the other interest you pay for 2014. File 2012 taxes for free See How To Report , later. File 2012 taxes for free Refunded interest. File 2012 taxes for free   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. File 2012 taxes for free See Refunds of interest , earlier. File 2012 taxes for free Mortgage insurance premiums. File 2012 taxes for free   The amount of mortgage insurance premiums you paid during 2013 may be shown in box 4 of Form 1098. File 2012 taxes for free See Mortgage Insurance Premiums, earlier. File 2012 taxes for free Investment Interest This section discusses interest expenses you may be able to deduct as an investor. File 2012 taxes for free If you borrow money to buy property you hold for investment, the interest you pay is investment interest. File 2012 taxes for free You can deduct investment interest subject to the limit discussed later. File 2012 taxes for free However, you cannot deduct interest you incurred to produce tax-exempt income. File 2012 taxes for free Nor can you deduct interest expenses on straddles. File 2012 taxes for free Investment interest does not include any qualified home mortgage interest or any interest taken into account in computing income or loss from a passive activity. File 2012 taxes for free Investment Property Property held for investment includes property that produces interest, dividends, annuities, or royalties not derived in the ordinary course of a trade or business. File 2012 taxes for free It also includes property that produces gain or loss (not derived in the ordinary course of a trade or business) from the sale or trade of property producing these types of income or held for investment (other than an interest in a passive activity). File 2012 taxes for free Investment property also includes an interest in a trade or business activity in which you did not materially participate (other than a passive activity). File 2012 taxes for free Partners, shareholders, and beneficiaries. File 2012 taxes for free   To determine your investment interest, combine your share of investment interest from a partnership, S corporation, estate, or trust with your other investment interest. File 2012 taxes for free Allocation of Interest Expense If you borrow money for business or personal purposes as well as for investment, you must allocate the debt among those purposes. File 2012 taxes for free Only the interest expense on the part of the debt used for investment purposes is treated as investment interest. File 2012 taxes for free The allocation is not affected by the use of property that secures the debt. File 2012 taxes for free Limit on Deduction Generally, your deduction for investment interest expense is limited to the amount of your net investment income. File 2012 taxes for free You can carry over the amount of investment interest that you could not deduct because of this limit to the next tax year. File 2012 taxes for free The interest carried over is treated as investment interest paid or accrued in that next year. File 2012 taxes for free You can carry over disallowed investment interest to the next tax year even if it is more than your taxable income in the year the interest was paid or accrued. File 2012 taxes for free Net Investment Income Determine the amount of your net investment income by subtracting your investment expenses (other than interest expense) from your investment income. File 2012 taxes for free Investment income. File 2012 taxes for free    This generally includes your gross income from property held for investment (such as interest, dividends, annuities, and royalties). File 2012 taxes for free Investment income does not include Alaska Permanent Fund dividends. File 2012 taxes for free It also does not include qualified dividends or net capital gain unless you choose to include them. File 2012 taxes for free Choosing to include qualified dividends. File 2012 taxes for free   Investment income generally does not include qualified dividends, discussed in chapter 8. File 2012 taxes for free However, you can choose to include all or part of your qualified dividends in investment income. File 2012 taxes for free   You make this choice by completing Form 4952, line 4g, according to its instructions. File 2012 taxes for free   If you choose to include any amount of your qualified dividends in investment income, you must reduce your qualified dividends that are eligible for the lower capital gains tax rates by the same amount. File 2012 taxes for free Choosing to include net capital gain. File 2012 taxes for free   Investment income generally does not include net capital gain from disposing of investment property (including capital gain distributions from mutual funds). File 2012 taxes for free However, you can choose to include all or part of your net capital gain in investment income. File 2012 taxes for free    You make this choice by completing Form 4952, line 4g, according to its instructions. File 2012 taxes for free   If you choose to include any amount of your net capital gain in investment income, you must reduce your net capital gain that is eligible for the lower capital gains tax rates by the same amount. File 2012 taxes for free    Before making either choice, consider the overall effect on your tax liability. File 2012 taxes for free Compare your tax if you make one or both of these choices with your tax if you do not. File 2012 taxes for free Investment income of child reported on parent's return. File 2012 taxes for free    Investment income includes the part of your child's interest and dividend income that you choose to report on your return. File 2012 taxes for free If the child does not have qualified dividends, Alaska Permanent Fund dividends, or capital gain distributions, this is the amount on line 6 of Form 8814, Parents' Election To Report Child's Interest and Dividends. File 2012 taxes for free Child's qualified dividends. File 2012 taxes for free   If part of the amount you report is your child's qualified dividends, that part (which is reported on Form 1040, line 9b) generally does not count as investment income. File 2012 taxes for free However, you can choose to include all or part of it in investment income, as explained under Choosing to include qualified dividends , earlier. File 2012 taxes for free   Your investment income also includes the amount on Form 8814, line 12 (or, if applicable, the reduced amount figured next under Child's Alaska Permanent Fund dividends). File 2012 taxes for free Child's Alaska Permanent Fund dividends. File 2012 taxes for free   If part of the amount you report is your child's Alaska Permanent Fund dividends, that part does not count as investment income. File 2012 taxes for free To figure the amount of your child's income that you can consider your investment income, start with the amount on Form 8814, line 6. File 2012 taxes for free Multiply that amount by a percentage that is equal to the Alaska Permanent Fund dividends divided by the total amount on Form 8814, line 4. File 2012 taxes for free Subtract the result from the amount on Form 8814, line 12. File 2012 taxes for free Child's capital gain distributions. File 2012 taxes for free    If part of the amount you report is your child's capital gain distributions, that part (which is reported on Schedule D, line 13, or Form 1040, line 13) generally does not count as investment income. File 2012 taxes for free However, you can choose to include all or part of it in investment income, as explained in Choosing to include net capital gain , earlier. File 2012 taxes for free   Your investment income also includes the amount on Form 8814, line 12 (or, if applicable, the reduced amount figured under Child's Alaska Permanent Fund dividends , earlier). File 2012 taxes for free Investment expenses. File 2012 taxes for free   Investment expenses are your allowed deductions (other than interest expense) directly connected with the production of investment income. File 2012 taxes for free Investment expenses that are included as a miscellaneous itemized deduction on Schedule A (Form 1040) are allowable deductions after applying the 2% limit that applies to miscellaneous itemized deductions. File 2012 taxes for free Use the smaller of: The investment expenses included on Schedule A (Form 1040), line 23, or The amount on Schedule A, line 27. File 2012 taxes for free Losses from passive activities. File 2012 taxes for free   Income or expenses that you used in computing income or loss from a passive activity are not included in determining your investment income or investment expenses (including investment interest expense). File 2012 taxes for free See Publication 925, Passive Activity and At-Risk Rules, for information about passive activities. File 2012 taxes for free Form 4952 Use Form 4952, Investment Interest Expense Deduction, to figure your deduction for investment interest. File 2012 taxes for free Exception to use of Form 4952. File 2012 taxes for free   You do not have to complete Form 4952 or attach it to your return if you meet all of the following tests. File 2012 taxes for free Your investment interest expense is not more than your investment income from interest and ordinary dividends minus any qualified dividends. File 2012 taxes for free You do not have any other deductible investment expenses. File 2012 taxes for free You have no carryover of investment interest expense from 2012. File 2012 taxes for free If you meet all of these tests, you can deduct all of your investment interest. File 2012 taxes for free More Information For more information on investment interest, see Interest Expenses in chapter 3 of Publication 550. File 2012 taxes for free Items You Cannot Deduct Some interest payments are not deductible. File 2012 taxes for free Certain expenses similar to interest also are not deductible. File 2012 taxes for free Nondeductible expenses include the following items. File 2012 taxes for free Personal interest (discussed later). File 2012 taxes for free Service charges (however, see Other Expenses (Line 23) in chapter 28). File 2012 taxes for free Annual fees for credit cards. File 2012 taxes for free Loan fees. File 2012 taxes for free Credit investigation fees. File 2012 taxes for free Interest to purchase or carry tax-exempt securities. File 2012 taxes for free Penalties. File 2012 taxes for free   You cannot deduct fines and penalties paid to a government for violations of law, regardless of their nature. File 2012 taxes for free Personal Interest Personal interest is not deductible. File 2012 taxes for free Personal interest is any interest that is not home mortgage interest, investment interest, business interest, or other deductible interest. File 2012 taxes for free It includes the following items. File 2012 taxes for free Interest on car loans (unless you use the car for business). File 2012 taxes for free Interest on federal, state, or local income tax. File 2012 taxes for free Finance charges on credit cards, retail installment contracts, and revolving charge accounts incurred for personal expenses. File 2012 taxes for free Late payment charges by a public utility. File 2012 taxes for free You may be able to deduct interest you pay on a qualified student loan. File 2012 taxes for free For details, see Publication 970, Tax Benefits for Education. File 2012 taxes for free Allocation of Interest If you use the proceeds of a loan for more than one purpose (for example, personal and business), you must allocate the interest on the loan to each use. File 2012 taxes for free However, you do not have to allocate home mortgage interest if it is fully deductible, regardless of how the funds are used. File 2012 taxes for free You allocate interest (other than fully deductible home mortgage interest) on a loan in the same way as the loan itself is allocated. File 2012 taxes for free You do this by tracing disbursements of the debt proceeds to specific uses. File 2012 taxes for free For details on how to do this, see chapter 4 of Publication 535. File 2012 taxes for free How To Report You must file Form 1040 to deduct any home mortgage interest expense on your tax return. File 2012 taxes for free Where you deduct your interest expense generally depends on how you use the loan proceeds. File 2012 taxes for free See Table 23-1 for a summary of where to deduct your interest expense. File 2012 taxes for free Home mortgage interest and points. File 2012 taxes for free   Deduct the home mortgage interest and points reported to you on Form 1098 on Schedule A (Form 1040), line 10. File 2012 taxes for free 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. File 2012 taxes for free Attach a statement explaining the difference and print “See attached” next to line 10. File 2012 taxes for free    Deduct home mortgage interest that was not reported to you on Form 1098 on Schedule A (Form 1040), line 11. File 2012 taxes for free 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. File 2012 taxes for free The seller must give you this number and you must give the seller your TIN. File 2012 taxes for free A Form W-9, Request for Taxpayer Identification Number and Certification, can be used for this purpose. File 2012 taxes for free Failure to meet any of these requirements may result in a $50 penalty for each failure. File 2012 taxes for free 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. File 2012 taxes for free See Social Security Number (SSN) in chapter 1 for more information about TINs. File 2012 taxes for free    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. File 2012 taxes for free   Deduct mortgage insurance premiums on Schedule A (Form 1040), line 13. File 2012 taxes for free More than one borrower. File 2012 taxes for free   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. File 2012 taxes for free Show how much of the interest each of you paid, and give the name and address of the person who received the form. File 2012 taxes for free Deduct your share of the interest on Schedule A (Form 1040), line 11, and print “See attached” next to the line. File 2012 taxes for free Also, deduct your share of any qualified mortgage insurance premiums on Schedule A (Form 1040), line 13. File 2012 taxes for free   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. File 2012 taxes for free You should let each of the other borrowers know what his or her share is. File 2012 taxes for free Mortgage proceeds used for business or investment. File 2012 taxes for free    If your home mortgage interest deduction is limited, but all or part of the mortgage proceeds were used for business, investment, or other deductible activities, see Table 23-1. File 2012 taxes for free It shows where to deduct the part of your excess interest that is for those activities. File 2012 taxes for free Investment interest. File 2012 taxes for free    Deduct investment interest, subject to certain limits discussed in Publication 550, on Schedule A (Form 1040), line 14. File 2012 taxes for free Amortization of bond premium. File 2012 taxes for free   There are various ways to treat the premium you pay to buy taxable bonds. File 2012 taxes for free See Bond Premium Amortization in Publication 550. File 2012 taxes for free Income-producing rental or royalty interest. File 2012 taxes for free   Deduct interest on a loan for income-producing rental or royalty property that is not used in your business in Part I of Schedule E (Form 1040). File 2012 taxes for free Example. File 2012 taxes for free You rent out part of your home and borrow money to make repairs. File 2012 taxes for free You can deduct only the interest payment for the rented part in Part I of Schedule E (Form 1040). File 2012 taxes for free Deduct the rest of the interest payment on Schedule A (Form 1040) if it is deductible home mortgage interest. File 2012 taxes for free Table 23-1. File 2012 taxes for free Where To Deduct Your Interest Expense IF you have . File 2012 taxes for free . File 2012 taxes for free . File 2012 taxes for free THEN deduct it on . File 2012 taxes for free . File 2012 taxes for free . File 2012 taxes for free AND for more information go to . File 2012 taxes for free . File 2012 taxes for free . File 2012 taxes for free deductible student loan interest Form 1040, line 33, or Form 1040A, line 18 Publication 970. File 2012 taxes for free deductible home mortgage interest and points reported on Form 1098 Schedule A (Form 1040), line 10 Publication 936. File 2012 taxes for free deductible home mortgage interest not reported on Form 1098 Schedule A (Form 1040), line 11 Publication 936. File 2012 taxes for free deductible points not reported on Form 1098 Schedule A (Form 1040), line 12 Publication 936. File 2012 taxes for free deductible mortgage insurance premiums Schedule A (Form 1040), line 13 Publication 936. File 2012 taxes for free deductible investment interest (other than incurred to produce rents or royalties) Schedule A (Form 1040), line 14 Publication 550. File 2012 taxes for free deductible business interest (non-farm) Schedule C or C-EZ (Form 1040) Publication 535. File 2012 taxes for free deductible farm business interest Schedule F (Form 1040) Publications 225 and 535. File 2012 taxes for free deductible interest incurred to produce rents or royalties Schedule E (Form 1040) Publications 527 and 535. File 2012 taxes for free personal interest not deductible. File 2012 taxes for free Prev  Up  Next   Home   More Online Publications