Friday, June 25, 2021

JUST CURIOUS

 


As we all know, thanks to the GOP Tax Act taxpayers can only deduct mortgage interest paid on debt used to “buy, build or substantially improve” a personal if they itemize on Schedule A.  Home equity interest is no longer deductible.
 
In addition –
 
* The home being bought, built or improved must be used as the security for the loan.
 
* If the homeowner defaults on the loan the home will be taken to “satisfy” the debt.
 
* The loan must be recorded with the appropriate agency under state law, usually at the county level.
 
We can no longer simply put the amount of mortgage interest reported in Box 1 of a Form 1098 on Line 8 of Schedule A.
 
Thankfully, also due to the GOP Tax Act, most of our clients are no longer able to itemize.  But for those who do the mortgage interest deduction is often the deciding factor.
 
It is clearly the responsibility of the taxpayer to keep separate track of acquisition debt and home equity debt, going back to the original purchase of the mortgage.  The bank or mortgage company will not do it, and it is not our responsibility.  But I do not know of a single taxpayer who actually does this.
 
I am interested in hearing how my fellow tax preparers deal with this issue.  What do you ask of your clients when it comes to mortgage interest?  And what documentation do you require from them to determine deductible mortgage interest?
 
I would also like to know if any of you have dealt with an IRS audit of mortgage interest.
 
You can respond via a comment to this post or via email to rdftaxpro@yahoo.com with THE TAX PROFESSIONAL BLOG in the Subject Line.
 
FYI, I have created a guide for DEDUCTING MORTGAGE INTEREST, with forms and specific instructions for keeping separate track of mortgage debt, to give to clients.  I am offering reprint rights to this guide that you can personalize and give to your clients for only $14.95 ($11.25 for members of the National Association of Tax Professionals – provide your membership number with your order) , sent as a word document email attachment (the signed reprint rights agreement will be sent via postal mail).  The guide also discusses in detail who can deduct mortgage interest, refinancing and points.
 
If you want to see the guide before ordering reprint rights, I will send you a copy of the public version, as a pdf email attachment, for only $2.00, which can be deducted from the cost of the reprint edition if you decide to order.
 
Send your check or money order for $14.95 or $11.25 or $2.00, payable to TAXES AND ACCOUNTING, INC, and your email address to –
 
TAXES AND ACCOUNTING, INC
DEDUCTING MORTGAGE INTEREST
POST OFFICE BOX A
HAWLEY PA 18428
 
I am looking forward to your responses.
 
TTFN











Friday, June 18, 2021

TAXPRO BUZZ

 

+ The 2021 IRS Nationwide Forum is virtual again this year.  It will be held July 20 – August 19.  A printable version of the webinar schedule is available by clicking the link in the first paragraph under the heading “Webinar Schedule Now Available!”.

+ In case you haven’t heard this yet - “IRS offers tool to register for monthly child tax credit”.

+ Russ Fox EA shared his thoughts on “The 2021 Tax Season (Part 1)” at TAXABLE TALK.  For Russ, Part 1 is the part of the season that ended on May 15th.

If you have not already seen my review of the 2021 tax filing season go here.

+ One more benefit of membership in the National Association of Tax Professionals (NATP) – “Free post-tax season webinars for all tax pros”.

+ While written for those who are considering becoming a professional tax preparer, this book offers good advice and information, and food for thought, for existing tax pros – SO YOU WANT TO BE A TAX PREPARER.   

Click here for a review of this book.  

If you have some BUZZ you want to share with fellow tax pros email me at rdftaxpro@yahoo.com with the link.  Be sure top put THE TAX PROFESSIONAL BLOG in the Subject Line.

TAFN








Friday, June 11, 2021

TAXPRO BUZZ

 The tax filing season – my 50th – is over, so I’m baaaaaaack!

+ Speaking of my milestone, I reminisce about my “50 Years of Preparing 1040s” in a series of posts at THE WANDERING TAX PRO.  Check out -

My First 1040

How It All Began

The Great Unwashed

+ My post on “The Great Unwashed” deals with clients.  Kelly Phillips Erb discusses clients in a blast from the past“ from her TAXGIRL blog – “Don't Be That Client: 8 Clients That Drive Tax Pros Crazy”. 

+ Getting back to THE WANDERING TAX PRO – have you seen my annual “That Was The Tax Season That Was 2021” review of the tax filing season yet?  Why not? 

+ And before we leave TWTP – I discuss the benefits of filing separate returns in “Joint Vs Separate – That Is The Question.” 

+ This legislation certainly makes sense to me.  The Tax Deadline Simplification Act would amend the Internal Revenue Code of 1986 to have estimated income tax installments paid on a truly quarterly basis.

+ The NATP BLOG provides us with a “Summary of the American Families Plan and other recent proposals”.

+ Kay Bell, the yellow rose of taxes, explained “Biden's first federal budget covers campaign & tax promises” at DON’T MESS WITH TAXES.

TAFN