Sunday Feb 19, 2017 at 4:31 AM
If you’re like millions of homeowners, you afresh accustomed an innocuous-looking certificate from your lender. It’s alleged Anatomy 1098 and it totes up how abundant absorption you paid on your mortgage aftermost year. Your lender is appropriate to ample it out and accelerate it to the IRS.
But there are key differences in this year’s form. Your lender charge now acknowledge added information, including the outstanding arch antithesis at the alpha of the year and the mortgage’s origination date.
It seems the IRS is ratcheting up its ysis of mortgage absorption deductions, one of the better write-offs in the tax code. It will bulk the government a projected $357 billion for budgetary years 2016 to 2020.
Watchdogs accept been ytical of the IRS’s blank of this area.
The abridgement of acute abstracts credibility in the antecedent 1098 anatomy fabricated it arduous for the IRS to actuate whether backdrop able for absorption deductions, or whether the claimed amounts were in accompany with appear incomes or the tax code’s banned of $1 actor in “home accretion debt” and $100,000 of “home disinterestedness debt.”
Charles Benway, an accountant with Main Street Financial in Mt. Kisco, New York, said abounding owners don’t apperceive that back they pay bottomward their aboriginal mortgage, their accretion debt declines. If they after refinance into a beyond accommodation and use the gain for purposes added than buying, architecture or convalescent their home (or additional home), a allocation of the absorption they pay may not be deductible.
It’s complicated, Benway says, and “it’s activity to hit people” already the IRS begins agriculture this year’s 1098 abstracts into its computers.
Bottom line: Just because your 1098 says you paid a assertive bulk of absorption doesn’t automatically beggarly that’s what you can deduct.
Kenneth R. Harney covers apartment issues on Capitol Hill for the Washington Post Writers Group.
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