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2010 Turbotax

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2010 Turbotax

2010 turbotax Publication 179 - Introductory Material Table of Contents Acontecimientos futuros Qué hay de nuevo Recordatorios Calendario Introduction Acontecimientos futuros Si desea obtener la información más reciente sobre todo acontecimiento relacionado con la Publicación 179, tal como legislación promulgada después de que ésta fue publicada, acceda a www. 2010 turbotax irs. 2010 turbotax gov/pub179. 2010 turbotax Qué hay de nuevo Contribuciones al Seguro Social y al Medicare para el 2014. 2010 turbotax  La tasa de contribución para el Seguro Social permanece en 6. 2010 turbotax 2% tanto para el empleado como para el patrono. 2010 turbotax La base límite de salario para el Seguro Social es $117,000. 2010 turbotax La tasa de la contribución al Medicare es 1. 2010 turbotax 45% tanto para la parte del empleado como la del patrono, la misma tasa que correspondió para el año 2013. 2010 turbotax No hay límite sobre la cantidad de salarios sujetos a la contribución al Medicare. 2010 turbotax Las contribuciones al Seguro Social y al Medicare se aplican a los salarios de empleados domésticos a quienes usted les paga $1,900 o más en efectivo o de una forma equivalente de remuneración. 2010 turbotax Las contribuciones al Seguro Social y al Medicare se aplican a los trabajadores electorales a quienes se les paga $1,600 o más en efectivo o una remuneración equivalente. 2010 turbotax Cambio de parte responsable. 2010 turbotax  Comenzando el 1 de enero del 2014, toda entidad jurídica que tiene asignado un número patronal tiene que presentar el Formulario 8822-B Change of Address or Responsible Party—Business (Cambio de dirección o Parte Responsable— de negocios), en inglés, para informar si ha cambiado la parte responsable del negocio. 2010 turbotax El Formulario 8822-B tiene que presentarse dentro de los 60 días que cambió la parte responsable. 2010 turbotax Si el cambio de la parte responsable ocurrió antes del año 2014 y no se ha notificado el cambio anteriormente al IRS presente el Formulario 8822-B antes del 1 de marzo del 2014 e informe solamente el cambio más reciente. 2010 turbotax Para la definición de “parte reponsable” vea las Instrucciones del Formulario SS-4PR Solicitud de Número de Identificación Patronal (EIN). 2010 turbotax Matrimonio entre personas del mismo sexo. 2010 turbotax . 2010 turbotax  Para propósitos de las contribuciones federales, las personas del mismo sexo se consideran casados legalmente ​​si se casaron en un estado (o país extranjero) cuyas leyes autorizan el matrimonio de personas del mismo sexo, aunque el estado (o país extranjero) en el que ahora viven no reconozca el matrimonio entre personas del mismo sexo. 2010 turbotax Para obtener más información, consulte el Revenue Ruling 2013-17 (Reglamento de Rentas Internas 2013–17) disponible en www. 2010 turbotax irs. 2010 turbotax gov/irb/2013-38_IRB/ar07. 2010 turbotax html. 2010 turbotax El Notice 2013-61 (Aviso 2013-61) establece los procedimientos administrativos especiales para los patronos hacer reclamaciones para el reembolso o los ajustes de los pagos en exceso al Seguro Social y al Medicare con respecto a ciertos beneficios entre cónyuges del mismo sexo antes de la expiración del periodo de prescripción. 2010 turbotax El Aviso 2013-61 que aparece en la página 432 del Internal Revenue Bulletin (Boletín de Rentas Internas 2013-44), en inglés, está disponible en www. 2010 turbotax irs. 2010 turbotax gov/irb/2013-44_IRB/ar10. 2010 turbotax html. 2010 turbotax Recordatorios Retención de la Contribución Adicional al Medicare. 2010 turbotax  Además de la retención de la contribución Medicare de 1. 2010 turbotax 45%, usted tiene que retener la Contribución Adicional al Medicare de 0. 2010 turbotax 9% de los salarios en exceso de $200,000 que le paga a un empleado en un año natural. 2010 turbotax Se le requiere a usted que comience a retener la Contribución Adicional al Medicare en el período de paga en el cual usted le paga salarios en exceso de $200,000 a un empleado. 2010 turbotax Continúe reteniendo esta Contribución Adicional al Medicare en todo período de paga hasta que finalice el año natural. 2010 turbotax La Contribución Adicional al Medicare sólo se le impone al empleado. 2010 turbotax No hay una porción correspondiente al patrono de la Contribución Adicional al Medicare. 2010 turbotax Todos los salarios que están sujetos a la contribución Medicare, están sujetos a la retención de la Contribución Adicional al Medicare si éstos exceden el límite de $200,000. 2010 turbotax Si desea más información sobre cuáles salarios están sujetos a la Contribución Adicional al Medicare, vea la tabla Reglas especiales para varias clases de servicios y de pagos , en el apartado 15 de esta publicación. 2010 turbotax Para más información, sobre la Contribución Adicional al Medicare visite IRS. 2010 turbotax gov y escriba “ Additional Medicare Tax ” en inglés, en la casilla Search (Buscar). 2010 turbotax La información está disponible en inglés. 2010 turbotax El crédito contributivo por oportunidad de trabajo para organizaciones calificadas exentas de contribución que contratan a veteranos calificados ha sido extendido. 2010 turbotax . 2010 turbotax  El crédito contributivo por oportunidad de trabajo está disponible para veteranos desempleados que reúnan los requisitos que comiencen a trabajar antes del 1 de enero de 2014. 2010 turbotax Anteriormente, el crédito estaba disponible para veteranos desempleados quienes comenzaron a trabajar a partir del 22 de noviembre de 2011, y antes del 1 de enero de 2013. 2010 turbotax Las organizaciones exentas de contribuciones calificadas que contratan veteranos desempleados que reúnan los requisitos pueden reclamar el crédito contributivo por oportunidad de trabajo contra su contribución sobre la nómina utilizando el Formulario 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans (Crédito por oportunidad de trabajo para organizaciones exentas de contribuciones calificadas que contratan a veteranos calificados), en inglés. 2010 turbotax Si desea más información, visite IRS. 2010 turbotax gov y escriba “work opportunity tax credit” (crédito contributivo por oportunidad de trabajo), en inglés, en la casilla Search (Buscar). 2010 turbotax La información está disponible en inglés. 2010 turbotax Externalización de las obligaciones de la nómina. 2010 turbotax . 2010 turbotax  Los patronos son responsables de asegurar que las planillas de contribución se radiquen y que los depósitos y pagos se hagan, aun si el patrono contrata los servicios de un tercero para hacerlo. 2010 turbotax El patrono sigue siendo el responsable aun si el tercero no cumple con la acción requerida. 2010 turbotax Si opta por externalizar cualquier parte de su nómina y las obligaciones relacionadas con las contribuciones (es decir, retención, declarar y pagar las contribuciones al Seguro Social, al Medicare y FUTA) a un tercero pagador, tal como un proveedor de servicios de nómina o agente de reportación, visite el sitio web IRS. 2010 turbotax gov y escriba “outsourcing payroll duties” (externalización de las obligaciones de nómina) en la casilla “Search” (Buscar), para información útil sobre este tema. 2010 turbotax Dicha información está disponible en inglés. 2010 turbotax El crédito de asistencia para las primas COBRA. 2010 turbotax  El crédito por asistencia en los pagos de las primas COBRA se aplica a las primas pagadas por un máximo de 15 meses para los empleados que fueron despedidos entre el 1 de septiembre de 2008 y el 31 de mayo de 2010. 2010 turbotax Vea COBRA premium assistance credit (Crédito de asistencia para las primas COBRA) en inglés, en la Publicación 15. 2010 turbotax Vea la sección Crédito de asistencia para las primas de COBRA para detalles sobre el crédito. 2010 turbotax El Formulario 944-PR está descontinuado. 2010 turbotax  El Formulario 944-PR, Planilla para la Declaración Federal ANUAL del Patrono, ya no estará disponible después de 2011. 2010 turbotax A partir del año contributivo 2012, los patronos que anteriormente presentaban el Formulario 944-PR presentarán anualmente el Formulario 944(SP), Declaración Federal ANUAL de Impuestos del Patrono o Empleador. 2010 turbotax Por otra parte, los contribuyentes pueden solicitar que se les permita la radicación trimestral con el Formulario 941-PR, Planilla para la Declaración Federal TRIMESTRAL del Patrono, en vez del Formulario 944(SP) (o el Formulario 944, en inglés). 2010 turbotax Para más información, consulte las Instrucciones para el Formulario 944(SP). 2010 turbotax Para solicitar que se le permita radicar los formularios trimestrales 941-PR para informar sus contribuciones al Seguro Social y Medicare del año 2014, debe llamar al IRS al 1-800-829-4933 o al 267-941-1000 (llamada con cargos) a más tardar el 1 de abril de 2014. 2010 turbotax O, puede enviar una solicitud por escrito (el matasellos debe estar fechado en o antes del 15 de marzo de 2014). 2010 turbotax Después de comunicarse con el IRS, el IRS le enviará una notificación por escrito indicándole que su requisito de presentación ha cambiado. 2010 turbotax Si usted no recibe este aviso, debe presentar el Formulario 944(SP) para el año natural 2014. 2010 turbotax Para más información, consulte ¿Qué ocurre si quiere presentar Formularios 941, 941-SS o 941-PR en lugar del Formulario 944 (en inglés) o 944(SP)?, en las Instrucciones para el Formulario 944(SP) de 2013. 2010 turbotax Usted tiene que recibir un aviso escrito del IRS para poder radicar el Formulario 944(SP). 2010 turbotax  Si usted ha estado radicando los Formularios 941-PR y cree que sus contribuciones sobre la nómina para el año natural serán $1,000 o menos y desea radicar el Formulario 944(SP) (o el Formulario 944, en inglés) en vez de los Formularios 941-PR, tiene que comunicarse con el IRS para solicitar el permiso para poder radicar el Formulario 944(SP). 2010 turbotax Antes de que pueda radicar este formulario, tiene que recibir un aviso escrito de parte del IRS que le otorgue el permiso para poder radicar el Formulario 944(SP) en vez de los Formularios 941-PR. 2010 turbotax Si desea más información sobre cómo solicitar el permiso para radicar el Formulario 944(SP) o el Formulario 944, en vez de los Formularios 941-PR, vea el tema titulado ¿Qué ocurre si quiere presentar Formularios 941, 941-SS o 941-PR en lugar del Formulario 944 (en inglés) o 944(SP)?, en las Instrucciones para el Formulario 944(SP). 2010 turbotax Cambio de dirección. 2010 turbotax . 2010 turbotax  Utilice el Formulario 8822-B, Change of Address or Responsible Party-Business (Cambio de dirección— o Parte Responsable— de negocios), en inglés, para notificarle al IRS sobre un cambio a su dirección. 2010 turbotax No envíe el Formulario 8822-B junto con su planilla de contribuciones sobre la nómina. 2010 turbotax Los depósitos de las contribuciones federales tienen que llevarse a cabo mediante transferencia electrónica de fondos. 2010 turbotax  Usted tiene que depositar toda contribución mediante transferencia electrónica de fondos. 2010 turbotax Generalmente, la transferencia electrónica de fondos se lleva a cabo usando el Electronic Federal Tax Payment System (Sistema electrónico de pagos de la contribución federal o EFTPS, por sus siglas en inglés). 2010 turbotax Si no desea utilizar el EFTPS, puede hacer los arreglos para que su preparador, institución financiera, servicio de nómina u otro tercero de su confianza efectúe depósitos electrónicos en nombre suyo. 2010 turbotax El EFTPS es un servicio gratuito provisto por el Departamento del Tesoro. 2010 turbotax Los servicios provistos por su preparador profesional, institución financiera, servicio de nómina u otro tercero podría conllevar en un cargo. 2010 turbotax Si desea más información sobre cómo efectuar depósitos de la contribución federal, vea Cómo hacer los depósitos , en el apartado 11. 2010 turbotax Si desea más información sobre EFTPS o si desea inscribirse, visite el sitio web de EFTPS en www. 2010 turbotax eftps. 2010 turbotax gov o llame al 1-800-244-4829 (1-800-733-4829, si es usuario de equipo TDD). 2010 turbotax Puede encontrar información adicional sobre EFTPS en la Publicación 966 (SP), Sistema de Pago Electrónico del Impuesto Federal: La Manera Segura de pagar los Impuestos Federales. 2010 turbotax Radicación y pago por medios electrónicos. 2010 turbotax  El uso de las opciones electrónicas puede hacer más fácil la radicación de una planilla y el pago de la contribución federal. 2010 turbotax Utilice el EFTPS para efectuar depósitos o pagar la contribución en su totalidad, independientemente de si utiliza a un preparador o si prepara sus propias planillas. 2010 turbotax Puede usar el sistema electrónico e-file del IRS para radicar ciertas planillas. 2010 turbotax Si hay una suma por pagar en la planilla, puede radicarla con el sistema e-file y pagar electrónicamente (e-pay) en un solo paso al autorizar un retiro electrónico de fondos de su cuenta bancaria mientras está radicando electrónicamente. 2010 turbotax No utilice el retiro electrónico de fondos para pagar contribuciones que se requiere que se depositen. 2010 turbotax Visite el sitio web del IRS www. 2010 turbotax irs. 2010 turbotax gov/efile , en inglés, para más información sobre cómo radicar una planilla electrónicamente. 2010 turbotax Si desea más información sobre cómo pagar sus contribuciones utilizando el retiro electrónico de fondos, visite la página del IRS en www. 2010 turbotax irs. 2010 turbotax gov/e-pay. 2010 turbotax Se le podría cobrar un cargo por radicar electrónicamente. 2010 turbotax Para EFTPS, visite www. 2010 turbotax eftps. 2010 turbotax gov o llame a la línea de servicio al cliente de EFTPS al 1-800-244-4829 o 1-800-733-4829, si es usuario de equipo TDD. 2010 turbotax Para la radicación electrónica de los Formularios 499R-2/W-2PR y 499R-2/W-2cPR ante la Administración del Seguro Social, visite la página web www. 2010 turbotax hacienda. 2010 turbotax gobierno. 2010 turbotax pr. 2010 turbotax Si usted está radicando su planilla de contribuciones o si está pagando sus contribuciones federales electrónicamente, se necesita que provea un EIN válido. 2010 turbotax Si no provee un EIN válido, la planilla o pago no se tramitará. 2010 turbotax Esto podría resultarle en multas y demoras en la tramitación de su planilla o pago. 2010 turbotax Pagos con tarjeta de crédito o débito. 2010 turbotax  Para mayor información sobre cómo se pagan las contribuciones con tarjetas de crédito o débito, visite el sitio web del IRS, www. 2010 turbotax irs. 2010 turbotax gov/e-pay. 2010 turbotax No obstante, no use una tarjeta de crédito o débito para pagar contribuciones que deben ser depositadas. 2010 turbotax Contratación de empleados nuevos. 2010 turbotax  Mantenga un registro con el nombre y número de cada uno de sus empleados nuevos según aparece en su tarjeta de Seguro Social. 2010 turbotax Todo empleado que no tenga una tarjeta de Seguro Social deberá solicitarla usando el Formulario SS-5-SP, Solicitud para una Tarjeta de Seguro Social, en español. 2010 turbotax Vea el apartado 4 . 2010 turbotax Cómo informar las discrepancias entre los Formularios 941-PR (o 944(SP)) y los Formularios 499R-2/W-2PR. 2010 turbotax . 2010 turbotax  Utilice el Anexo D (Formulario 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations (Informe de discrepancias causadas por adquisiciones, fusiones o consolidaciones), en inglés. 2010 turbotax En este anexo se explicarán las discrepancias en los salarios, contribuciones y pagos que han surgido entre los Formularios 941-PR (o el Formulario 944(SP)) debido a adquisiciones, fusiones o consolidaciones. 2010 turbotax Si desea más información, vea las Instrucciones para el Anexo D (Formulario 941), disponibles en inglés. 2010 turbotax Solicitud de un número de identificación patronal en línea (EIN). 2010 turbotax  Usted puede solicitar un número de identificación patronal (EIN, por sus siglas en inglés) en línea al visitar el sitio web IRS. 2010 turbotax gov, en inglés, y pulsar sobre el enlace “Apply for an EIN Online” (Solicitud de un número de identificación patronal en línea (EIN)), que se encuentra bajo Tools (Herramientas). 2010 turbotax La información está provista en inglés. 2010 turbotax Pagos rechazados. 2010 turbotax  Cualquier forma de pago que ha sido rechazado y es devuelto por la institución financiera está sujeto a una penalidad. 2010 turbotax Esta penalidad es $25 o el 2% de la cantidad del pago, lo mayor entre ambos. 2010 turbotax Sin embargo, la penalidad en pagos rechazados de $24. 2010 turbotax 99 o menos es igual a la cantidad del pago. 2010 turbotax Por ejemplo, un pago por $18 que fue rechazado, la penalidad es $18 (la cantidad rechazada). 2010 turbotax Remuneración pagada a trabajadores agrícolas con visa H-2A. 2010 turbotax  La remuneración que le paga a trabajadores agrícolas por trabajo realizado con una visa H-2A no está sujeta a las contribuciones al Seguro Social, al Medicare o la Contribución Adicional al Medicare. 2010 turbotax Por lo tanto, no debe informarla como remuneración sujeta a dichas contribuciones. 2010 turbotax Verifique con las agencias del gobierno de Puerto Rico para verificar si tiene algún requisito estatal. 2010 turbotax Servicios de entrega privados. 2010 turbotax  Puede usar ciertos servicios de entrega privados designados por el IRS para enviar sus planillas o pagos de la contribución. 2010 turbotax La lista incluye sólo los servicios siguientes: DHL Express (DHL): DHL Same Day Service. 2010 turbotax Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority y FedEx International First. 2010 turbotax United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. 2010 turbotax M. 2010 turbotax , UPS Worldwide Express Plus y UPS Worldwide Express. 2010 turbotax Si desea obtener la dirección a dónde enviar la planilla o pago si utilizara un servicio de entrega privado, acceda a IRS. 2010 turbotax gov y escriba “private delivery service” en la casilla Search (Buscar). 2010 turbotax La información está disponible en inglés. 2010 turbotax El proveedor de servicio de entrega privado que escoja puede informarle de cómo se obtiene verificación por escrito de la fecha de envío. 2010 turbotax Los servicios de entrega privados no pueden entregar artículos de correo a los apartados postales. 2010 turbotax Usted tiene que utilizar el Servicio Postal de los EE. 2010 turbotax UU. 2010 turbotax para enviar todo artículo de correo a una dirección que incluya un apartado postal del IRS. 2010 turbotax Mantenimiento de récords. 2010 turbotax  Conserve todos los récords de sus contribuciones sobre la nómina durante 4 años. 2010 turbotax Los mismos deben estar disponibles para ser inspeccionados por funcionarios del IRS. 2010 turbotax No se ha establecido ninguna manera especial de llevar estos récords. 2010 turbotax Sin embargo, los mismos deberán incluir su EIN, las cantidades y fechas de todos los pagos de salarios (incluyendo beneficios marginales) y las propinas declaradas, así como los nombres, direcciones y ocupaciones de todos los empleados que reciban tales pagos, las fechas de empleo, además de los números de Seguro Social y los duplicados de las planillas de contribución radicadas anteriormente, incluyendo las fechas y cantidades de depósitos hechos según se explica en el apartado 11 . 2010 turbotax Todo patrono agrícola tiene que llevar un registro en el cual consten el nombre, dirección permanente y el EIN de cada líder de cuadrilla. 2010 turbotax Vea Líder de cuadrilla, en el apartado 1 . 2010 turbotax Comentarios y sugerencias. 2010 turbotax  Le agradecemos sus comentarios sobre esta publicación y sugerencias para ediciones futuras de la misma. 2010 turbotax Puede escribirnos a la siguiente dirección: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 2010 turbotax NW, IR-6526 Washington, DC 20224 Nosotros contestamos muchas cartas a través de llamadas telefónicas. 2010 turbotax Por lo tanto, sería de ayuda si en su correspondencia incluye su número telefónico, junto con el código de área telefónico, en donde nos podamos comunicar con usted durante el día. 2010 turbotax También, puede enviarnos comentarios a través de la página www. 2010 turbotax irs. 2010 turbotax gov/formspubs. 2010 turbotax Pulse sobre el enlace titulado More Information (Más información) y luego pulse sobre el enlace titulado “Give us Feedback” (Proveer comentarios), en inglés. 2010 turbotax Aunque no podemos contestar a cada comentario que recibimos, sí agradecemos sus sugerencias y las consideraremos al revisar nuestros productos contributivos. 2010 turbotax Fotografías de niños desaparecidos. 2010 turbotax  El Servicio de Rentas Internas siente orgullo en colaborar con el National Center for Missing and Exploited Children (Centro Nacional de Niños Desaparecidos y Explotados). 2010 turbotax Las fotografías de niños desaparecidos que han sido seleccionadas por el Centro pueden aparecer en esta publicación en páginas que de otra manera estarían en blanco. 2010 turbotax Usted puede ayudar a que estos niños regresen a sus hogares si al mirar sus fotografías los puede identificar y entonces llama libre de cargos al 1-800-THE-LOST (1-800-843-5678). 2010 turbotax Calendario   Si alguna fecha indicada a continuación es un sábado, domingo o día festivo oficial, la fecha de vencimiento para radicar la planilla, presentar un formulario o depositar su contribución es el próximo día laborable. 2010 turbotax Un día festivo oficial en Puerto Rico o en un estado posterga una fecha de vencimiento únicamente si la oficina del IRS donde usted tiene que radicar su planilla de contribución está localizada en tal estado o territorio. 2010 turbotax Para propósitos de la fecha de vencimiento, se cumplen los requisitos para radicar la planilla si la misma se encuentra en un sobre que esté dirigido apropiadamente, que tenga suficiente franqueo y que el matasellos esté fechado a más tardar en la fecha de vencimiento. 2010 turbotax Si se envía mediante un servicio de entrega privado aprobado por el IRS, la misma se tiene que enviar a más tardar en la fecha de vencimiento. 2010 turbotax Vea el tema Servicios de entrega privados en Recordatorios. 2010 turbotax A continuación encontrará una lista de las fechas y responsabilidades más importantes para usted. 2010 turbotax Además, vea la Publicación 509, Tax Calendars (Calendarios contributivos), en inglés, para más información. 2010 turbotax Para el 31 de enero:  Entregue a los empleados sus comprobantes de retención. 2010 turbotax Entréguele a cada empleado un Formulario 499R-2/W-2PR, Comprobante de Retención, debidamente completado. 2010 turbotax Vea el apartado 13 . 2010 turbotax Radique el Formulario 943-PR, Planilla para la Declaración ANUAL de la Contribución Federal del Patrono de Empleados Agrícolas, ante el IRS. 2010 turbotax Si depositó a tiempo la contribución correspondiente al Formulario 943-PR en su totalidad, tendrá hasta 10 días naturales adicionales a partir de la fecha de vencimiento indicada anteriormente para radicar su Formulario 943-PR. 2010 turbotax Radique el Formulario 940-PR, Planilla para la Declaración Federal ANUAL del Patrono de la Contribución Federal para el Desempleo (FUTA), ante el IRS. 2010 turbotax Pague o deposite todo saldo adeudado (si es más de $500). 2010 turbotax Si depositó el total de las contribuciones adeudadas a su debido tiempo, tendrá hasta 10 días naturales adicionales a partir de la fecha de vencimiento indicada anteriormente para radicar el Formulario 940-PR. 2010 turbotax Si antes radicaba el Formulario 944-PR, radique ahora el Formulario 944(SP), Declaración Federal ANUAL de Impuestos del Patrono o Empleador (o el Formulario 944, en inglés), ante el IRS si el mismo le notificó que debe radicar el Formulario 944(SP) en lugar de los Formularios 941-PR trimestrales. 2010 turbotax Si depositó la cantidad total de contribuciones conforme a la fecha de vencimiento de éstas, tendrá 10 días naturales adicionales a partir de la fecha de vencimiento indicada anteriormente para radicar el Formulario 944(SP). 2010 turbotax Para el 28 de febrero. 2010 turbotax   Radique los comprobantes de retención ante la Administración del Seguro Social (SSA, por sus siglas en inglés). 2010 turbotax Radique el Original del Formulario 499R-2/W-2PR, junto con el Formulario W-3PR, Informe de Comprobantes de Retención, ante la SSA. 2010 turbotax Para las planillas radicadas por vías electrónicas, vea el siguiente tema. 2010 turbotax Para el 31 de marzo. 2010 turbotax  Radique el Formulario 499R-2/W-2PR por vías electrónicas (y no por medios magnéticos o en papel) ante la SSA. 2010 turbotax Sin embargo, puede transmitir un archivo electrónico por medio de Internet. 2010 turbotax Vea Employer W-2 Filing Instructions & Information (Instrucciones e información para patronos sobre la radicación de Formularios W-2), en inglés, en el sitio web www. 2010 turbotax socialsecurity. 2010 turbotax gov/employer de la SSA para más información. 2010 turbotax Para el 30 de abril, 31 de julio, 31 de octubre y 31 de enero. 2010 turbotax  Radique el Formulario 941-PR trimestralmente ante el IRS. 2010 turbotax Si depositó el total de las contribuciones adeudadas a su debido tiempo, tendrá hasta 10 días naturales adicionales a partir de las fechas de vencimiento indicadas anteriormente para radicar el Formulario 941-PR. 2010 turbotax No radique los Formularios 941-PR para dichos trimestres si el IRS le ha informado que debe radicar el Formulario 944(SP). 2010 turbotax Deposite la contribución FUTA para el trimestre (incluyendo toda cantidad trasladada de un trimestre anterior) si la cantidad adeudada es más de $500. 2010 turbotax Si es de $500 o menos, traspásela al trimestre siguiente. 2010 turbotax Vea el apartado 10 , para más información. 2010 turbotax Introduction Esta publicación deberá ser usada por patronos cuyo negocio principal está ubicado en Puerto Rico o que tienen empleados cuyos ingresos están sujetos a retención de la contribución estatal sobre los ingresos de Puerto Rico. 2010 turbotax Generalmente, tanto los patronos como los empleados en Puerto Rico están sujetos a las contribuciones al Seguro Social y al seguro Medicare, conforme a la Federal Insurance Contributions Act (Ley de Contribuciones Federales al Seguro Social o FICA, por sus siglas en inglés). 2010 turbotax Esta publicación resume las responsabilidades que tiene el patrono en cuanto al cobro, pago y declaración de dichas contribuciones. 2010 turbotax Dondequiera que en esta publicación se use el término “Estados Unidos”, el mismo incluye a Puerto Rico, las Islas Vírgenes y los territorios autónomos y territorios no autónomos de los Estados Unidos. 2010 turbotax Las secciones a las cuales se hace referencia en esta publicación corresponden al Código Federal de Rentas Internas, a menos que se indique lo contrario. 2010 turbotax Esta publicación también proporciona a dichos patronos un resumen de sus responsabilidades en relación con las contribuciones bajo la Federal Unemployment Tax Act (Ley Federal de Contribución para el Desempleo o FUTA, por sus siglas en inglés). 2010 turbotax Vea los apartados 9 y 10 . 2010 turbotax Excepto por lo indicado en las tablas que se hallan en el apartado 15 , esas contribuciones corresponden a todo patrono que pague salarios tributables a empleados o que tenga empleados que declaran propinas. 2010 turbotax En esta publicación no se incluye información relacionada con las contribuciones del trabajo por cuenta propia (Seguro Social y Medicare para personas que trabajan por cuenta propia). 2010 turbotax Si necesita información sobre estas contribuciones, comuníquese con la oficina del IRS en Guaynabo o vea la Publicación 570, Tax Guide for Individuals With Income From U. 2010 turbotax S. 2010 turbotax Possessions (Guía tributaria para individuos con ingresos de fuentes en los territorios estadounidenses), en inglés. 2010 turbotax Contribuciones sobre los ingresos de Puerto Rico. 2010 turbotax   Esta publicación no incluye información relacionada con la retención de contribuciones federales sobre los ingresos. 2010 turbotax Ésta sólo trata las contribuciones sobre la nómina para patronos que están en Puerto Rico. 2010 turbotax   Si desea obtener información acerca de la contribución sobre ingresos de Puerto Rico, consulte con el Departamento de Hacienda de Puerto Rico. 2010 turbotax Las personas que trabajan amparadas bajo el programa del Seguro Social elijen un plan de protección para sus familias y para sí mismas. 2010 turbotax Entidades no consideradas como separadas de sus dueños y compañías subsidarias calificadas conforme al subcapítulo S (QSubs). 2010 turbotax   Las entidades no consideradas como separadas de sus dueños (disregarded entities) que tienen un solo dueño y que cumplen los requisitos y las compañías subsidiarias calificadas conforme al subcapítulo S (QSubs, por sus siglas en inglés), son tratadas como si fueran entidades separadas de su dueño para propósitos de las contribuciones sobre la nómina. 2010 turbotax Las entidades no consideradas como separadas de sus dueños que tienen un solo dueño y que cumplen los requisitos y no han optado por ser tratadas como corporación, tiene que declarar y pagar la contribución sobre la nómina correspondiente a los salarios de los empleados utilizando el nombre y EIN de dicha entidad. 2010 turbotax Vea la sección 1. 2010 turbotax 1361-4(a)(7) y la sección 301. 2010 turbotax 7701-2(c)(2)(iv) de los Reglamentos, en inglés. 2010 turbotax Crédito de asistencia para las primas de COBRA. 2010 turbotax   La Consolidated Omnibus Budget Reconciliation Act of 1985 (Ley de Conciliación de Asignaciones del Presupuesto de 1985 o COBRA, por sus siglas en inglés) les provee a ciertos ex empleados, jubilados, cónyuges, ex cónyuges e hijos dependientes el derecho a recibir temporalmente cobertura de salud a tarifas especiales para grupos. 2010 turbotax La ley COBRA, por lo general, cubre los planes de salud que incluyen a múltiples patronos y planes de salud que son mantenidos por patronos de la empresa privada (que no son iglesias) que tengan 20 o más empleados a tiempo completo o parcial. 2010 turbotax A dichos planes les corresponden ciertos requisitos conforme a la Employee Retirement Income Security Act of 1974 (Ley para la Protección de los Ingresos de Jubilación para los Empleados de 1974 o ERISA, por sus siglas en inglés). 2010 turbotax Conforme a la Public Health Service Act (Ley sobre el Servicio de Salud Pública), los requisitos del programa COBRA también le corresponden a los planes de salud que cubren a los empleados gubernamentales estatales y municipales. 2010 turbotax Requisitos similares corresponden conforme al Federal Employees Health Benefits Program (Programa de Seguro Médico para los Empleados Federales (FEHBP, por sus siglas en inglés)) y ciertas leyes estatales. 2010 turbotax Para tratar a la asistencia (o subsidio) para las primas de COBRA que se explican a continuación, a todos estos requisitos se les refiere como “requisitos de COBRA ”. 2010 turbotax   La ley American Recovery and Reinvestment Act of 2009 (Ley de Recuperación y Reinversión Económica Estadounidense de 2009 o ARRA, por sus siglas en inglés) permite un crédito contra las contribuciones sobre la paga (dichas contribuciones se denominan “contribuciones sobre la nómina” en esta publicación), para proveer asistencia para las primas de COBRA a individuos que cumplen con los requisitos para recibir dicha asistencia. 2010 turbotax Para los períodos de continuidad de cobertura COBRA que comienzan después del 16 de febrero de 2009, un plan de salud colectivo tiene que tratar a un individuo que reúne los requisitos para la asistencia como si hubiese pagado la prima de COBRA para la continuidad de cobertura requerida si el individuo optó por la cobertura COBRA y paga el 35% de la cantidad de la prima. 2010 turbotax   Un individuo que reúne los requisitos para la asistencia es un beneficiario calificado que cumple con los requisitos para la continuidad de la cobertura COBRA durante el período que comienza el 1 de septiembre de 2008, y que termina el 31 de mayo de 2010, debido al cese involuntario de empleo de un empleado amparado por la cobertura durante el período y que opta por la continuidad de la cobertura de COBRA. 2010 turbotax La asistencia para mantener la cobertura puede durar hasta 15 meses. 2010 turbotax   Los empleados que fueron despedidos durante el período que comienza el 1 septiembre de 2008 y que termina el 31 de mayo de 2010, y recibieron ofertas de indemnización que retrasaron el inicio de la continuación de cobertura COBRA, pueden ser elegibles para recibir asistencia con las primas para la continuación de cobertura COBRA. 2010 turbotax Para más información, vea Notice 2009-27 (Avisio 2009-27) que aparece en la página 838 del Internal Revenue Bulletin (Boletín de Rentas Internas 2009-16), en inglés, disponible en www. 2010 turbotax irs. 2010 turbotax gov/irb/2009-16_irb/ar09. 2010 turbotax html. 2010 turbotax   Los administradores de planes de salud colectivos (u otras entidades) que proveen o administran la continuación de la cobertura COBRA, tienen que notificarle a los individuos que cumplen con los requisitos para la asistencia de las primas de COBRA de que tienen derecho a dicha cobertura. 2010 turbotax   El 65% de la prima que no es pagada por las personas que reúnen los requisitos para la asistencia se le reembolsa a los patronos que mantienen el plan de salud colectivo. 2010 turbotax El reembolso se hace por medio de un crédito que se le aplica a las obligaciones de las contribuciones sobre la nómina del patrono. 2010 turbotax Para obtener información sobre cómo reclamar el crédito, vea las Instrucciones para el Formulario 941-PR o las Instrucciones para el Formulario 944(SP). 2010 turbotax El crédito se le trata como un depósito hecho en el primer día del período de la planilla (trimestre o año). 2010 turbotax En el caso de un plan que cubre a múltiples patronos, el crédito es reclamado por el plan, en vez del patrono. 2010 turbotax En el caso de un plan asegurado que está sujeto a los requisitos estatales para la continuidad de cobertura, el crédito es reclamado por la compañía de seguros, en vez del patrono. 2010 turbotax   Todo individuo o entidad que reclama el crédito por los pagos para la asistencia COBRA tiene que conservar la siguiente información para comprobar su reclamación: Información sobre el recibo, incluyendo fechas y cantidades, de la parte del 35% de la prima que le corresponde a la persona que reúne los requisitos para la asistencia. 2010 turbotax En el caso de un plan de seguro, una copia de la factura u otro documento comprobante emitido por la compañía aseguradora y prueba del pago a tiempo de la prima completa hecho a la compañía aseguradora que se requiere conforme los requisitos para la cobertura COBRA. 2010 turbotax En el caso de un plan autoasegurado, documentos que comprueban la cantidad de la prima y la cobertura provista a las personas que reúnen los requisitos para la asistencia. 2010 turbotax Atestiguación del cese involuntario, incluyendo la fecha de cesación (despido) involuntario para cada empleado amparado por la cobertura cuyo despido involuntario es la base para el derecho al subsidio. 2010 turbotax Prueba de que cada persona reúne los requisitos para la asistencia de la cobertura COBRA y de que ha optado por dicha cobertura. 2010 turbotax Un registro que tenga los números de Seguro Social de todos los empleados con cobertura, la cantidad del subsidio reembolsado con respecto a cada empleado con cobertura y que indique si el subsidio se debe a una persona o a dos o más personas. 2010 turbotax   Para más información, visite IRS. 2010 turbotax gov y escriba “COBRA” en la casilla Search (Buscar). 2010 turbotax La información está disponible en inglés. 2010 turbotax Ayuda para radicar documentos ante la SSA. 2010 turbotax   Si necesita ayuda en español para radicar sus formularios contributivos ante la SSA (esto incluye la solicitud de un número de identificación personal (PIN, por sus siglas en inglés)), llame a la SSA al 1-800-772-6270. 2010 turbotax Elegibilidad para empleo. 2010 turbotax   Usted tiene que verificar que cada empleado nuevo tenga derecho a trabajar legalmente en los Estados Unidos. 2010 turbotax Esto incluye completar el Formulario I-9, Employment Eligibility Verification (Verificación de elegibilidad para empleo), disponible en español, del Servicio de Ciudadanía e Inmigración de Estados Unidos (USCIS, por sus siglas en inglés). 2010 turbotax Puede obtener el formulario llamando al USCIS al 1-800-870-3676. 2010 turbotax Si desea más información, comuníquese con el USCIS al 1-800-375-5283 o visite la página web de USCIS en www. 2010 turbotax uscis. 2010 turbotax gov/espanol. 2010 turbotax Prev  Up  Next   Home   More Online Publications
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2012 Offshore Voluntary Disclosure Program


Update Jan. 24, 2014 — Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, is now obsolete. After June 30, 2013, the FBAR must be filed electronically with FinCEN

The IRS began an open-ended offshore voluntary disclosure program (OVDP) in January 2012 on the heels of strong interest in the 2011 and 2009 programs. The IRS may end the 2012 program at any time in the future. The IRS is offering people with undisclosed income from offshore accounts another opportunity to get current with their tax returns. The 2012 OVDP has a higher penalty rate than the previous program but offers clear benefits to encourage taxpayers to disclose foreign accounts now rather than risk detection by the IRS and possible criminal prosecution.

2012 OVDP Documents and Forms

Questions and Answers

Documents

Forms

Worksheets

News Releases and Fact Sheets

  • IR-2012-64, IRS Says Offshore Effort tops $5 Billion, Announces New Details on the Voluntary Disclosure Program and Closing of Offshore Loophole
  • IR-2012-64SP, Esfuerzo Extranjero del IRS Supera $5 Mil Millones; Detalles del Programa de Divulgación Voluntaria y Cierre de Laguna Jurídica
  • IR-2012-65, IRS Announces Efforts to Help U.S. Citizens Overseas, Including Dual Citizens and Those with Foreigh Retirement Plans
  • IR-2012-65SP, IRS Anuncia Ayuda a Estadounidenses en el Extranjero, Incluyendo Aquellos con Doble Nacionalidad y Planes de Jubilación Extranjeros
  • IR-2012-5, IRS Offshore Programs Produce $4.4 Billion To Date for Nation’s Taxpayers; Offshore Voluntary Disclosure Program Reopens

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Page Last Reviewed or Updated: 24-Jan-2014

The 2010 Turbotax

2010 turbotax Publication 936 - Main Content Table of Contents Part I. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax Home Mortgage Interest This part explains what you can deduct as home mortgage interest. 2010 turbotax It includes discussions on points, mortgage insurance premiums, and how to report deductible interest on your tax return. 2010 turbotax Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). 2010 turbotax The loan may be a mortgage to buy your home, a second mortgage, a line of credit, or a home equity loan. 2010 turbotax You can deduct home mortgage interest if all the following conditions are met. 2010 turbotax You file Form 1040 and itemize deductions on Schedule A (Form 1040). 2010 turbotax The mortgage is a secured debt on a qualified home in which you have an ownership interest. 2010 turbotax Secured Debt and Qualified Home are explained later. 2010 turbotax  Both you and the lender must intend that the loan be repaid. 2010 turbotax Fully deductible interest. 2010 turbotax   In most cases, you can deduct all of your home mortgage interest. 2010 turbotax How much you can deduct depends on the date of the mortgage, the amount of the mortgage, and how you use the mortgage proceeds. 2010 turbotax   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. 2010 turbotax (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. 2010 turbotax ) 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. 2010 turbotax   The three categories are as follows. 2010 turbotax Mortgages you took out on or before October 13, 1987 (called grandfathered debt). 2010 turbotax 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). 2010 turbotax 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). 2010 turbotax The dollar limits for the second and third categories apply to the combined mortgages on your main home and second home. 2010 turbotax   See Part II for more detailed definitions of grandfathered, home acquisition, and home equity debt. 2010 turbotax    You can use Figure A to check whether your home mortgage interest is fully deductible. 2010 turbotax This image is too large to be displayed in the current screen. 2010 turbotax Please click the link to view the image. 2010 turbotax Figure A. 2010 turbotax Is My Home Mortgage Interest Fully Deductible? Secured Debt You can deduct your home mortgage interest only if your mortgage is a secured debt. 2010 turbotax 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. 2010 turbotax In other words, your mortgage is a secured debt if you put your home up as collateral to protect the interests of the lender. 2010 turbotax If you cannot pay the debt, your home can then serve as payment to the lender to satisfy (pay) the debt. 2010 turbotax In this publication, mortgage will refer to secured debt. 2010 turbotax Debt not secured by home. 2010 turbotax   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). 2010 turbotax   A debt is not secured by your home if it once was, but is no longer secured by your home. 2010 turbotax Wraparound mortgage. 2010 turbotax   This is not a secured debt unless it is recorded or otherwise perfected under state law. 2010 turbotax Example. 2010 turbotax Beth owns a home subject to a mortgage of $40,000. 2010 turbotax She sells the home for $100,000 to John, who takes it subject to the $40,000 mortgage. 2010 turbotax Beth continues to make the payments on the $40,000 note. 2010 turbotax John pays $10,000 down and gives Beth a $90,000 note secured by a wraparound mortgage on the home. 2010 turbotax Beth does not record or otherwise perfect the $90,000 mortgage under the state law that applies. 2010 turbotax Therefore, the mortgage is not a secured debt and John cannot deduct any of the interest he pays on it as home mortgage interest. 2010 turbotax Choice to treat the debt as not secured by your home. 2010 turbotax   You can choose to treat any debt secured by your qualified home as not secured by the home. 2010 turbotax This treatment begins with the tax year for which you make the choice and continues for all later tax years. 2010 turbotax You can revoke your choice only with the consent of the Internal Revenue Service (IRS). 2010 turbotax   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. 2010 turbotax 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. 2010 turbotax Cooperative apartment owner. 2010 turbotax   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. 2010 turbotax Qualified Home For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. 2010 turbotax This means your main home or your second home. 2010 turbotax A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities. 2010 turbotax 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. 2010 turbotax Otherwise, it is considered personal interest and is not deductible. 2010 turbotax Main home. 2010 turbotax   You can have only one main home at any one time. 2010 turbotax This is the home where you ordinarily live most of the time. 2010 turbotax Second home. 2010 turbotax   A second home is a home that you choose to treat as your second home. 2010 turbotax Second home not rented out. 2010 turbotax   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. 2010 turbotax You do not have to use the home during the year. 2010 turbotax Second home rented out. 2010 turbotax   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. 2010 turbotax 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. 2010 turbotax If you do not use the home long enough, it is considered rental property and not a second home. 2010 turbotax For information on residential rental property, see Publication 527. 2010 turbotax More than one second home. 2010 turbotax   If you have more than one second home, you can treat only one as the qualified second home during any year. 2010 turbotax However, you can change the home you treat as a second home during the year in the following situations. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax Divided use of your home. 2010 turbotax   The only part of your home that is considered a qualified home is the part you use for residential living. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax (See Home Acquisition Debt in Part II. 2010 turbotax ) Dividing the fair market value may affect your home equity debt limit, also explained in Part II . 2010 turbotax Renting out part of home. 2010 turbotax   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. 2010 turbotax The rented part of your home is used by the tenant primarily for residential living. 2010 turbotax The rented part of your home is not a self-contained residential unit having separate sleeping, cooking, and toilet facilities. 2010 turbotax 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. 2010 turbotax If two persons (and dependents of either) share the same sleeping quarters, they are treated as one tenant. 2010 turbotax Office in home. 2010 turbotax   If you have an office in your home that you use in your business, see Publication 587, Business Use of Your Home. 2010 turbotax It explains how to figure your deduction for the business use of your home, which includes the business part of your home mortgage interest. 2010 turbotax Home under construction. 2010 turbotax   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. 2010 turbotax   The 24-month period can start any time on or after the day construction begins. 2010 turbotax Home destroyed. 2010 turbotax   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. 2010 turbotax This means you can continue to deduct the interest you pay on your home mortgage, subject to the limits described in this publication. 2010 turbotax   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. 2010 turbotax   This rule applies to your main home and to a second home that you treat as a qualified home. 2010 turbotax Time-sharing arrangements. 2010 turbotax   You can treat a home you own under a time-sharing plan as a qualified home if it meets all the requirements. 2010 turbotax 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. 2010 turbotax Rental of time-share. 2010 turbotax   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. 2010 turbotax See Second home rented out , earlier, for the use requirement. 2010 turbotax 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. 2010 turbotax Married taxpayers. 2010 turbotax   If you are married and file a joint return, your qualified home(s) can be owned either jointly or by only one spouse. 2010 turbotax Separate returns. 2010 turbotax   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. 2010 turbotax However, if you both consent in writing, then one spouse can take both the main home and a second home into account. 2010 turbotax Special Situations This section describes certain items that can be included as home mortgage interest and others that cannot. 2010 turbotax It also describes certain special situations that may affect your deduction. 2010 turbotax Late payment charge on mortgage payment. 2010 turbotax   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. 2010 turbotax Mortgage prepayment penalty. 2010 turbotax   If you pay off your home mortgage early, you may have to pay a penalty. 2010 turbotax 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. 2010 turbotax Sale of home. 2010 turbotax   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. 2010 turbotax Example. 2010 turbotax John and Peggy Harris sold their home on May 7. 2010 turbotax Through April 30, they made home mortgage interest payments of $1,220. 2010 turbotax 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. 2010 turbotax Their mortgage interest deduction is $1,270 ($1,220 + $50). 2010 turbotax Prepaid interest. 2010 turbotax   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. 2010 turbotax You can deduct in each year only the interest that qualifies as home mortgage interest for that year. 2010 turbotax However, there is an exception that applies to points, discussed later. 2010 turbotax Mortgage interest credit. 2010 turbotax    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. 2010 turbotax Figure the credit on Form 8396, Mortgage Interest Credit. 2010 turbotax If you take this credit, you must reduce your mortgage interest deduction by the amount of the credit. 2010 turbotax   See Form 8396 and Publication 530 for more information on the mortgage interest credit. 2010 turbotax Ministers' and military housing allowance. 2010 turbotax   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. 2010 turbotax Hardest Hit Fund and Emergency Homeowners' Loan Programs. 2010 turbotax   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. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax 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). 2010 turbotax 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. 2010 turbotax Mortgage assistance payments under section 235 of the National Housing Act. 2010 turbotax   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. 2010 turbotax You cannot deduct the interest that is paid for you. 2010 turbotax No other effect on taxes. 2010 turbotax   Do not include these mortgage assistance payments in your income. 2010 turbotax Also, do not use these payments to reduce other deductions, such as real estate taxes. 2010 turbotax Divorced or separated individuals. 2010 turbotax   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. 2010 turbotax See the discussion of Payments for jointly-owned home under Alimony in Publication 504, Divorced or Separated Individuals. 2010 turbotax Redeemable ground rents. 2010 turbotax   In some states (such as Maryland), you can buy your home subject to a ground rent. 2010 turbotax A ground rent is an obligation you assume to pay a fixed amount per year on the property. 2010 turbotax Under this arrangement, you are leasing (rather than buying) the land on which your home is located. 2010 turbotax   If you make annual or periodic rental payments on a redeemable ground rent, you can deduct them as mortgage interest. 2010 turbotax   A ground rent is a redeemable ground rent if all of the following are true. 2010 turbotax Your lease, including renewal periods, is for more than 15 years. 2010 turbotax You can freely assign the lease. 2010 turbotax 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. 2010 turbotax The lessor's interest in the land is primarily a security interest to protect the rental payments to which he or she is entitled. 2010 turbotax   Payments made to end the lease and to buy the lessor's entire interest in the land are not deductible as mortgage interest. 2010 turbotax Nonredeemable ground rents. 2010 turbotax   Payments on a nonredeemable ground rent are not mortgage interest. 2010 turbotax You can deduct them as rent if they are a business expense or if they are for rental property. 2010 turbotax Reverse mortgages. 2010 turbotax   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. 2010 turbotax With a reverse mortgage, you retain title to your home. 2010 turbotax 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. 2010 turbotax Because reverse mortgages are considered loan advances and not income, the amount you receive is not taxable. 2010 turbotax 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. 2010 turbotax Your deduction may be limited because a reverse mortgage loan generally is subject to the limit on Home Equity Debt discussed in Part II. 2010 turbotax Rental payments. 2010 turbotax   If you live in a house before final settlement on the purchase, any payments you make for that period are rent and not interest. 2010 turbotax This is true even if the settlement papers call them interest. 2010 turbotax You cannot deduct these payments as home mortgage interest. 2010 turbotax Mortgage proceeds invested in tax-exempt securities. 2010 turbotax   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. 2010 turbotax “Grandfathered debt” and “home equity debt” are defined in Part II of this publication. 2010 turbotax Refunds of interest. 2010 turbotax   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. 2010 turbotax 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. 2010 turbotax However, you need to include it only up to the amount of the deduction that reduced your tax in the earlier year. 2010 turbotax This is true whether the interest overcharge was refunded to you or was used to reduce the outstanding principal on your mortgage. 2010 turbotax If you need to include the refund in income, report it on Form 1040, line 21. 2010 turbotax   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. 2010 turbotax For information about Form 1098, see Form 1098, Mortgage Interest Statement , later. 2010 turbotax   For more information on how to treat refunds of interest deducted in earlier years, see Recoveries in Publication 525, Taxable and Nontaxable Income. 2010 turbotax Cooperative apartment owner. 2010 turbotax   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. 2010 turbotax The patronage dividend is a partial refund to the cooperative housing corporation of mortgage interest it paid in a prior year. 2010 turbotax   If you receive a Form 1098 from the cooperative housing corporation, the form should show only the amount you can deduct. 2010 turbotax Points The term “points” is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. 2010 turbotax Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points. 2010 turbotax This image is too large to be displayed in the current screen. 2010 turbotax Please click the link to view the image. 2010 turbotax Figure B. 2010 turbotax 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. 2010 turbotax See Points paid by the seller , later. 2010 turbotax General Rule You generally cannot deduct the full amount of points in the year paid. 2010 turbotax Because they are prepaid interest, you generally deduct them ratably over the life (term) of the mortgage. 2010 turbotax See Deduction Allowed Ratably , next. 2010 turbotax For exceptions to the general rule, see Deduction Allowed in Year Paid , later. 2010 turbotax 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. 2010 turbotax You use the cash method of accounting. 2010 turbotax This means you report income in the year you receive it and deduct expenses in the year you pay them. 2010 turbotax Most individuals use this method. 2010 turbotax Your loan is secured by a home. 2010 turbotax (The home does not need to be your main home. 2010 turbotax ) Your loan period is not more than 30 years. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax Example. 2010 turbotax You use the cash method of accounting. 2010 turbotax In 2013, you took out a $100,000 loan payable over 20 years. 2010 turbotax The terms of the loan are the same as for other 20-year loans offered in your area. 2010 turbotax You paid $4,800 in points. 2010 turbotax You made 3 monthly payments on the loan in 2013. 2010 turbotax You can deduct $60 [($4,800 ÷ 240 months) x 3 payments] in 2013. 2010 turbotax In 2014, if you make all twelve payments, you will be able to deduct $240 ($20 x 12). 2010 turbotax Deduction Allowed in Year Paid You can fully deduct points in the year paid if you meet all the following tests. 2010 turbotax (You can use Figure B as a quick guide to see whether your points are fully deductible in the year paid. 2010 turbotax ) Your loan is secured by your main home. 2010 turbotax (Your main home is the one you ordinarily live in most of the time. 2010 turbotax ) Paying points is an established business practice in the area where the loan was made. 2010 turbotax The points paid were not more than the points generally charged in that area. 2010 turbotax You use the cash method of accounting. 2010 turbotax This means you report income in the year you receive it and deduct expenses in the year you pay them. 2010 turbotax Most individuals use this method. 2010 turbotax 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. 2010 turbotax The funds you provided at or before closing, plus any points the seller paid, were at least as much as the points charged. 2010 turbotax The funds you provided are not required to have been applied to the points. 2010 turbotax They can include a down payment, an escrow deposit, earnest money, and other funds you paid at or before closing for any purpose. 2010 turbotax You cannot have borrowed these funds from your lender or mortgage broker. 2010 turbotax You use your loan to buy or build your main home. 2010 turbotax The points were computed as a percentage of the principal amount of the mortgage. 2010 turbotax The amount is clearly shown on the settlement statement (such as the Settlement Statement, Form HUD-1) as points charged for the mortgage. 2010 turbotax The points may be shown as paid from either your funds or the seller's. 2010 turbotax Note. 2010 turbotax 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. 2010 turbotax Home improvement loan. 2010 turbotax   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. 2010 turbotax Second home. 2010 turbotax You cannot fully deduct in the year paid points you pay on loans secured by your second home. 2010 turbotax You can deduct these points only over the life of the loan. 2010 turbotax Refinancing. 2010 turbotax   Generally, points you pay to refinance a mortgage are not deductible in full in the year you pay them. 2010 turbotax This is true even if the new mortgage is secured by your main home. 2010 turbotax   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. 2010 turbotax You can deduct the rest of the points over the life of the loan. 2010 turbotax Example 1. 2010 turbotax In 1998, Bill Fields got a mortgage to buy a home. 2010 turbotax In 2013, Bill refinanced that mortgage with a 15-year $100,000 mortgage loan. 2010 turbotax The mortgage is secured by his home. 2010 turbotax To get the new loan, he had to pay three points ($3,000). 2010 turbotax 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. 2010 turbotax Bill paid the points out of his private funds, rather than out of the proceeds of the new loan. 2010 turbotax The payment of points is an established practice in the area, and the points charged are not more than the amount generally charged there. 2010 turbotax Bill's first payment on the new loan was due July 1. 2010 turbotax He made six payments on the loan in 2013 and is a cash basis taxpayer. 2010 turbotax Bill used the funds from the new mortgage to repay his existing mortgage. 2010 turbotax 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. 2010 turbotax He cannot deduct all of the points in 2013. 2010 turbotax He can deduct two points ($2,000) ratably over the life of the loan. 2010 turbotax He deducts $67 [($2,000 ÷ 180 months) × 6 payments] of the points in 2013. 2010 turbotax The other point ($1,000) was a fee for services and is not deductible. 2010 turbotax Example 2. 2010 turbotax 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. 2010 turbotax Bill deducts 25% ($25,000 ÷ $100,000) of the points ($2,000) in 2013. 2010 turbotax His deduction is $500 ($2,000 × 25%). 2010 turbotax Bill also deducts the ratable part of the remaining $1,500 ($2,000 − $500) that must be spread over the life of the loan. 2010 turbotax This is $50 [($1,500 ÷ 180 months) × 6 payments] in 2013. 2010 turbotax The total amount Bill deducts in 2013 is $550 ($500 + $50). 2010 turbotax Special Situations This section describes certain special situations that may affect your deduction of points. 2010 turbotax Original issue discount. 2010 turbotax   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. 2010 turbotax This reduction results in original issue discount, which is discussed in chapter 4 of Publication 535. 2010 turbotax Amounts charged for services. 2010 turbotax    Amounts charged by the lender for specific services connected to the loan are not interest. 2010 turbotax Examples of these charges are: Appraisal fees, Notary fees, and Preparation costs for the mortgage note or deed of trust. 2010 turbotax  You cannot deduct these amounts as points either in the year paid or over the life of the mortgage. 2010 turbotax Points paid by the seller. 2010 turbotax   The term “points” includes loan placement fees that the seller pays to the lender to arrange financing for the buyer. 2010 turbotax Treatment by seller. 2010 turbotax   The seller cannot deduct these fees as interest. 2010 turbotax But they are a selling expense that reduces the amount realized by the seller. 2010 turbotax See Publication 523 for information on selling your home. 2010 turbotax Treatment by buyer. 2010 turbotax   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. 2010 turbotax If all the tests under Deduction Allowed in Year Paid , earlier, are met, the buyer can deduct the points in the year paid. 2010 turbotax If any of those tests are not met, the buyer deducts the points over the life of the loan. 2010 turbotax   If you need information about the basis of your home, see Publication 523 or Publication 530. 2010 turbotax Funds provided are less than points. 2010 turbotax   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. 2010 turbotax In addition, you can deduct any points paid by the seller. 2010 turbotax Example 1. 2010 turbotax When you took out a $100,000 mortgage loan to buy your home in December, you were charged one point ($1,000). 2010 turbotax You meet all the tests for deducting points in the year paid, except the only funds you provided were a $750 down payment. 2010 turbotax Of the $1,000 charged for points, you can deduct $750 in the year paid. 2010 turbotax You spread the remaining $250 over the life of the mortgage. 2010 turbotax Example 2. 2010 turbotax 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. 2010 turbotax In the year paid, you can deduct $1,750 ($750 of the amount you were charged plus the $1,000 paid by the seller). 2010 turbotax You spread the remaining $250 over the life of the mortgage. 2010 turbotax You must reduce the basis of your home by the $1,000 paid by the seller. 2010 turbotax Excess points. 2010 turbotax   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. 2010 turbotax You must spread any additional points over the life of the mortgage. 2010 turbotax Mortgage ending early. 2010 turbotax   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. 2010 turbotax However, if you refinance the mortgage with the same lender, you cannot deduct any remaining balance of spread points. 2010 turbotax Instead, deduct the remaining balance over the term of the new loan. 2010 turbotax   A mortgage may end early due to a prepayment, refinancing, foreclosure, or similar event. 2010 turbotax Example. 2010 turbotax Dan paid $3,000 in points in 2002 that he had to spread out over the 15-year life of the mortgage. 2010 turbotax He deducts $200 points per year. 2010 turbotax Through 2012, Dan has deducted $2,200 of the points. 2010 turbotax Dan prepaid his mortgage in full in 2013. 2010 turbotax He can deduct the remaining $800 of points in 2013. 2010 turbotax Limits on deduction. 2010 turbotax   You cannot fully deduct points paid on a mortgage that exceeds the limits discussed in Part II . 2010 turbotax See the Table 1 Instructions for line 10. 2010 turbotax Form 1098. 2010 turbotax    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. 2010 turbotax See Form 1098, Mortgage Interest Statement , later. 2010 turbotax Mortgage Insurance Premiums You can treat amounts you paid during 2013 for qualified mortgage insurance as home mortgage interest. 2010 turbotax The insurance must be in connection with home acquisition debt, and the insurance contract must have been issued after 2006. 2010 turbotax Qualified mortgage insurance. 2010 turbotax   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). 2010 turbotax   Mortgage insurance provided by the Department of Veterans Affairs is commonly known as a funding fee. 2010 turbotax If provided by the Rural Housing Service, it is commonly known as a guarantee fee. 2010 turbotax 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. 2010 turbotax These fees can be deducted fully in 2013 if the mortgage insurance contract was issued in 2013. 2010 turbotax Contact the mortgage insurance issuer to determine the deductible amount if it is not reported in box 4 of Form 1098. 2010 turbotax Special rules for prepaid mortgage insurance. 2010 turbotax   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. 2010 turbotax 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. 2010 turbotax No deduction is allowed for the unamortized balance if the mortgage is satisfied before its term. 2010 turbotax This paragraph does not apply to qualified mortgage insurance provided by the Department of Veterans Affairs or the Rural Housing Service. 2010 turbotax Example. 2010 turbotax Ryan purchased a home in May of 2012 and financed the home with a 15-year mortgage. 2010 turbotax Ryan also prepaid all of the $9,240 in private mortgage insurance required at the time of closing in May. 2010 turbotax 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. 2010 turbotax Ryan's adjusted gross income (AGI) for 2012 is $76,000. 2010 turbotax Ryan can deduct $880 ($9,240 ÷ 84 x 8 months) for qualified mortgage insurance premiums in 2012. 2010 turbotax For 2013, Ryan can deduct $1,320 ($9,240 ÷ 84 x 12 months) if his AGI is $100,000 or less. 2010 turbotax 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). 2010 turbotax Limit on deduction. 2010 turbotax   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. 2010 turbotax 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. 2010 turbotax If your adjusted gross income is more than $109,000 ($54,500 if married filing separately), you cannot deduct your mortgage insurance premiums. 2010 turbotax Form 1098. 2010 turbotax   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. 2010 turbotax See Form 1098, Mortgage Interest Statement, next. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax A governmental unit is a person for purposes of furnishing the statement. 2010 turbotax The statement for each year should be sent to you by January 31 of the following year. 2010 turbotax A copy of this form will also be sent to the IRS. 2010 turbotax 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. 2010 turbotax However, it should not show any interest that was paid for you by a government agency. 2010 turbotax As a general rule, Form 1098 will include only points that you can fully deduct in the year paid. 2010 turbotax However, certain points not included on Form 1098 also may be deductible, either in the year paid or over the life of the loan. 2010 turbotax See the earlier discussion of Points to determine whether you can deduct points not shown on Form 1098. 2010 turbotax Prepaid interest on Form 1098. 2010 turbotax   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. 2010 turbotax However, you cannot deduct the prepaid amount for January 2014 in 2013. 2010 turbotax (See Prepaid interest , earlier. 2010 turbotax ) You will have to figure the interest that accrued for 2014 and subtract it from the amount in box 1. 2010 turbotax You will include the interest for January 2014 with other interest you pay for 2014. 2010 turbotax Refunded interest. 2010 turbotax   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. 2010 turbotax See Refunds of interest , earlier. 2010 turbotax Mortgage insurance premiums. 2010 turbotax   The amount of mortgage insurance premiums you paid during 2013 may be shown in Box 4 of Form 1098. 2010 turbotax See Mortgage Insurance Premiums , earlier. 2010 turbotax How To Report Deduct the home mortgage interest and points reported to you on Form 1098 on Schedule A (Form 1040), line 10. 2010 turbotax 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. 2010 turbotax Attach a statement explaining the difference and print “See attached” next to line 10. 2010 turbotax Deduct home mortgage interest that was not reported to you on Form 1098 on Schedule A (Form 1040), line 11. 2010 turbotax 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. 2010 turbotax The seller must give you this number and you must give the seller your TIN. 2010 turbotax A Form W-9, Request for Taxpayer Identification Number and Certification, can be used for this purpose. 2010 turbotax Failure to meet any of these requirements may result in a $50 penalty for each failure. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax Deduct mortgage insurance premiums on Schedule A (Form 1040), line 13. 2010 turbotax More than one borrower. 2010 turbotax   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. 2010 turbotax Show how much of the interest each of you paid, and give the name and address of the person who received the form. 2010 turbotax Deduct your share of the interest on Schedule A (Form 1040), line 11, and print “See attached” next to the line. 2010 turbotax Also, deduct your share of any qualified mortgage insurance premiums on Schedule A (Form 1040), line 13. 2010 turbotax   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. 2010 turbotax Let each of the other borrowers know what his or her share is. 2010 turbotax Mortgage proceeds used for business or investment. 2010 turbotax   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. 2010 turbotax It shows where to deduct the part of your excess interest that is for those activities. 2010 turbotax 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. 2010 turbotax Special Rule for Tenant-Stockholders in Cooperative Housing Corporations A qualified home includes stock in a cooperative housing corporation owned by a tenant-stockholder. 2010 turbotax This applies only if the tenant-stockholder is entitled to live in the house or apartment because of owning stock in the cooperative. 2010 turbotax Cooperative housing corporation. 2010 turbotax   This is a corporation that meets all of the following conditions. 2010 turbotax 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. 2010 turbotax Receives at least 80% of its gross income for the year in which the mortgage interest is paid or incurred from tenant-stockholders. 2010 turbotax For this purpose, gross income is all income received during the entire year, including amounts received before the corporation changed to cooperative ownership. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax Stock used to secure debt. 2010 turbotax   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). 2010 turbotax 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. 2010 turbotax See chapter 4 of Publication 535 for details on these rules. 2010 turbotax Figuring deductible home mortgage interest. 2010 turbotax   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. 2010 turbotax 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. 2010 turbotax   Figure your share of this interest by multiplying the total by the following fraction. 2010 turbotax      Your shares of stock in the cooperative   The total shares of stock in the cooperative Limits on deduction. 2010 turbotax   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. 2010 turbotax The cooperative should determine your share of its grandfathered debt, its home acquisition debt, and its home equity debt. 2010 turbotax (Your share of each of these types of debt is equal to the average balance of each debt multiplied by the fraction just given. 2010 turbotax ) 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. 2010 turbotax Form 1098. 2010 turbotax    The cooperative should give you a Form 1098 showing your share of the interest. 2010 turbotax Use the rules in this publication to determine your deductible mortgage interest. 2010 turbotax Part II. 2010 turbotax Limits on Home Mortgage Interest Deduction This part of the publication discusses the limits on deductible home mortgage interest. 2010 turbotax 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 . 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax Table 1 can help you figure your qualified loan limit and your deductible home mortgage interest. 2010 turbotax 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). 2010 turbotax It also must be secured by that home. 2010 turbotax 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. 2010 turbotax The additional debt may qualify as home equity debt (discussed later). 2010 turbotax Home acquisition debt limit. 2010 turbotax   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). 2010 turbotax This limit is reduced (but not below zero) by the amount of your grandfathered debt (discussed later). 2010 turbotax Debt over this limit may qualify as home equity debt (also discussed later). 2010 turbotax Refinanced home acquisition debt. 2010 turbotax   Any secured debt you use to refinance home acquisition debt is treated as home acquisition debt. 2010 turbotax 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. 2010 turbotax 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). 2010 turbotax Mortgage that qualifies later. 2010 turbotax   A mortgage that does not qualify as home acquisition debt because it does not meet all the requirements may qualify at a later time. 2010 turbotax 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. 2010 turbotax However, if the debt is later secured by the home, it may qualify as home acquisition debt after that time. 2010 turbotax Similarly, a debt that you use to buy property may not qualify because the property is not a qualified home. 2010 turbotax However, if the property later becomes a qualified home, the debt may qualify after that time. 2010 turbotax Mortgage treated as used to buy, build, or improve home. 2010 turbotax   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. 2010 turbotax This applies in the following situations. 2010 turbotax You buy your home within 90 days before or after the date you take out the mortgage. 2010 turbotax 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). 2010 turbotax (See Example 1 later. 2010 turbotax ) You build or improve your home and take out the mortgage before the work is completed. 2010 turbotax The home acquisition debt is limited to the amount of the expenses incurred within 24 months before the date of the mortgage. 2010 turbotax You build or improve your home and take out the mortgage within 90 days after the work is completed. 2010 turbotax 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. 2010 turbotax (See Example 2 later. 2010 turbotax ) Example 1. 2010 turbotax You bought your main home on June 3 for $175,000. 2010 turbotax You paid for the home with cash you got from the sale of your old home. 2010 turbotax On July 15, you took out a mortgage of $150,000 secured by your main home. 2010 turbotax You used the $150,000 to invest in stocks. 2010 turbotax 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. 2010 turbotax The entire mortgage qualifies as home acquisition debt because it was not more than the home's cost. 2010 turbotax Example 2. 2010 turbotax On January 31, John began building a home on the lot that he owned. 2010 turbotax He used $45,000 of his personal funds to build the home. 2010 turbotax The home was completed on October 31. 2010 turbotax On November 21, John took out a $36,000 mortgage that was secured by the home. 2010 turbotax The mortgage can be treated as used to build the home because it was taken out within 90 days after the home was completed. 2010 turbotax 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. 2010 turbotax This is illustrated by Figure C. 2010 turbotax   Please click here for the text description of the image. 2010 turbotax Figure C. 2010 turbotax John's example Date of the mortgage. 2010 turbotax   The date you take out your mortgage is the day the loan proceeds are disbursed. 2010 turbotax This is generally the closing date. 2010 turbotax You can treat the day you apply in writing for your mortgage as the date you take it out. 2010 turbotax However, this applies only if you receive the loan proceeds within a reasonable time (such as within 30 days) after your application is approved. 2010 turbotax If a timely application you make is rejected, a reasonable additional time will be allowed to make a new application. 2010 turbotax Cost of home or improvements. 2010 turbotax   To determine your cost, include amounts paid to acquire any interest in a qualified home or to substantially improve the home. 2010 turbotax   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. 2010 turbotax Substantial improvement. 2010 turbotax   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. 2010 turbotax    Repairs that maintain your home in good condition, such as repainting your home, are not substantial improvements. 2010 turbotax 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. 2010 turbotax Acquiring an interest in a home because of a divorce. 2010 turbotax   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. 2010 turbotax Part of home not a qualified home. 2010 turbotax    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. 2010 turbotax See Divided use of your home under Qualified Home in Part I. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax Example. 2010 turbotax You bought your home for cash 10 years ago. 2010 turbotax 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. 2010 turbotax This loan is home equity debt. 2010 turbotax Home equity debt limit. 2010 turbotax   There is a limit on the amount of debt that can be treated as home equity debt. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax Example. 2010 turbotax You own one home that you bought in 2000. 2010 turbotax Its FMV now is $110,000, and the current balance on your original mortgage (home acquisition debt) is $95,000. 2010 turbotax Bank M offers you a home mortgage loan of 125% of the FMV of the home less any outstanding mortgages or other liens. 2010 turbotax To consolidate some of your other debts, you take out a $42,500 home mortgage loan [(125% × $110,000) − $95,000] with Bank M. 2010 turbotax Your home equity debt is limited to $15,000. 2010 turbotax 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. 2010 turbotax Debt higher than limit. 2010 turbotax   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. 2010 turbotax But if the proceeds of the loan were used for investment, business, or other deductible purposes, the interest may be deductible. 2010 turbotax If it is, see the Table 1 Instructions for line 13 for an explanation of how to allocate the excess interest. 2010 turbotax Part of home not a qualified home. 2010 turbotax   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. 2010 turbotax See Divided use of your home under Qualified Home in Part I. 2010 turbotax Fair market value (FMV). 2010 turbotax    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. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax To qualify, it must have been secured by your qualified home on October 13, 1987, and at all times after that date. 2010 turbotax How you used the proceeds does not matter. 2010 turbotax Grandfathered debt is not limited. 2010 turbotax All of the interest you paid on grandfathered debt is fully deductible home mortgage interest. 2010 turbotax 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. 2010 turbotax Refinanced grandfathered debt. 2010 turbotax   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. 2010 turbotax 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). 2010 turbotax The debt must be secured by the qualified home. 2010 turbotax   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. 2010 turbotax After that, you treat it as home acquisition debt or home equity debt, depending on how you used the proceeds. 2010 turbotax Exception. 2010 turbotax   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. 2010 turbotax This term cannot be more than 30 years. 2010 turbotax Example. 2010 turbotax Chester took out a $200,000 first mortgage on his home in 1986. 2010 turbotax The mortgage was a five-year balloon note and the entire balance on the note was due in 1991. 2010 turbotax Chester refinanced the debt in 1991 with a new 20-year mortgage. 2010 turbotax The refinanced debt is treated as grandfathered debt for its entire term (20 years). 2010 turbotax Line-of-credit mortgage. 2010 turbotax    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. 2010 turbotax The balance on the mortgage before you borrowed the additional amounts is grandfathered debt. 2010 turbotax The newly borrowed amounts are not grandfathered debt because the funds were borrowed after October 13, 1987. 2010 turbotax See Average Mortgage Balance in the Table 1 Instructions that follow. 2010 turbotax 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. 2010 turbotax All the mortgages are grandfathered debt. 2010 turbotax The total of the mortgage balances for the entire year is within the limits discussed earlier under Home Acquisition Debt and Home Equity Debt . 2010 turbotax In either of those cases, you do not need Table 1. 2010 turbotax Otherwise, you can use Table 1 to determine your qualified loan limit and deductible home mortgage interest. 2010 turbotax Fill out only one Table 1 for both your main and second home regardless of how many mortgages you have. 2010 turbotax Table 1. 2010 turbotax Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. 2010 turbotax Part I Qualified Loan Limit 1. 2010 turbotax Enter the average balance of all your grandfathered debt. 2010 turbotax See line 1 instructions 1. 2010 turbotax   2. 2010 turbotax Enter the average balance of all your home acquisition debt. 2010 turbotax See line 2 instructions 2. 2010 turbotax   3. 2010 turbotax Enter $1,000,000 ($500,000 if married filing separately) 3. 2010 turbotax   4. 2010 turbotax Enter the larger of the amount on line 1 or the amount on line 3 4. 2010 turbotax   5. 2010 turbotax Add the amounts on lines 1 and 2. 2010 turbotax Enter the total here 5. 2010 turbotax   6. 2010 turbotax Enter the smaller of the amount on line 4 or the amount on line 5 6. 2010 turbotax   7. 2010 turbotax If you have home equity debt, enter the smaller of $100,000 ($50,000 if married filing separately) or your limited amount. 2010 turbotax See the line 7 instructions for the limit which may apply to you. 2010 turbotax 7. 2010 turbotax   8. 2010 turbotax Add the amounts on lines 6 and 7. 2010 turbotax Enter the total. 2010 turbotax This is your qualified loan limit. 2010 turbotax 8. 2010 turbotax   Part II Deductible Home Mortgage Interest 9. 2010 turbotax Enter the total of the average balances of all mortgages on all qualified homes. 2010 turbotax  See line 9 instructions 9. 2010 turbotax     If line 8 is less than line 9, go on to line 10. 2010 turbotax If line 8 is equal to or more than line 9, stop here. 2010 turbotax All of your interest on all the mortgages included on line 9 is deductible as home mortgage interest on Schedule A (Form 1040). 2010 turbotax     10. 2010 turbotax Enter the total amount of interest that you paid. 2010 turbotax See line 10 instructions 10. 2010 turbotax   11. 2010 turbotax Divide the amount on line 8 by the amount on line 9. 2010 turbotax Enter the result as a decimal amount (rounded to three places) 11. 2010 turbotax × . 2010 turbotax 12. 2010 turbotax Multiply the amount on line 10 by the decimal amount on line 11. 2010 turbotax Enter the result. 2010 turbotax This is your deductible home mortgage interest. 2010 turbotax Enter this amount on Schedule A (Form 1040) 12. 2010 turbotax   13. 2010 turbotax Subtract the amount on line 12 from the amount on line 10. 2010 turbotax Enter the result. 2010 turbotax This is not home mortgage interest. 2010 turbotax See line 13 instructions 13. 2010 turbotax   Home equity debt only. 2010 turbotax   If all of your mortgages are home equity debt, do not fill in lines 1 through 5. 2010 turbotax Enter zero on line 6 and complete the rest of Table 1. 2010 turbotax Average Mortgage Balance You have to figure the average balance of each mortgage to determine your qualified loan limit. 2010 turbotax You need these amounts to complete lines 1, 2, and 9 of Table 1. 2010 turbotax You can use the highest mortgage balances during the year, but you may benefit most by using the average balances. 2010 turbotax The following are methods you can use to figure your average mortgage balances. 2010 turbotax However, if a mortgage has more than one category of debt, see Mixed-use mortgages , later, in this section. 2010 turbotax Average of first and last balance method. 2010 turbotax   You can use this method if all the following apply. 2010 turbotax You did not borrow any new amounts on the mortgage during the year. 2010 turbotax (This does not include borrowing the original mortgage amount. 2010 turbotax ) You did not prepay more than one month's principal during the year. 2010 turbotax (This includes prepayment by refinancing your home or by applying proceeds from its sale. 2010 turbotax ) You had to make level payments at fixed equal intervals on at least a semi-annual basis. 2010 turbotax You treat your payments as level even if they were adjusted from time to time because of changes in the interest rate. 2010 turbotax    To figure your average balance, complete the following worksheet. 2010 turbotax    1. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax Add amounts on lines 1 and 2   4. 2010 turbotax Divide the amount on line 3 by 2. 2010 turbotax Enter the result   Interest paid divided by interest rate method. 2010 turbotax   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. 2010 turbotax    Complete the following worksheet to figure your average balance. 2010 turbotax    1. 2010 turbotax Enter the interest paid in 2013. 2010 turbotax Do not include points, mortgage insurance premiums, or any interest paid in 2013 that is for a year after 2013. 2010 turbotax However, do include interest that is for 2013 but was paid in an earlier year   2. 2010 turbotax Enter the annual interest rate on the mortgage. 2010 turbotax If the interest rate varied in 2013, use the lowest rate for the year   3. 2010 turbotax Divide the amount on line 1 by the amount on line 2. 2010 turbotax Enter the result   Example. 2010 turbotax Mr. 2010 turbotax Blue had a line of credit secured by his main home all year. 2010 turbotax He paid interest of $2,500 on this loan. 2010 turbotax The interest rate on the loan was 9% (. 2010 turbotax 09) all year. 2010 turbotax His average balance using this method is $27,778, figured as follows. 2010 turbotax 1. 2010 turbotax Enter the interest paid in 2013. 2010 turbotax Do not include points, mortgage insurance premiums, or any interest paid in 2013 that is for a year after 2013. 2010 turbotax However, do include interest that is for 2013 but was paid in an earlier year $2,500 2. 2010 turbotax Enter the annual interest rate on the mortgage. 2010 turbotax If the interest rate varied in 2013, use the lowest rate for the year . 2010 turbotax 09 3. 2010 turbotax Divide the amount on line 1 by the amount on line 2. 2010 turbotax Enter the result $27,778 Statements provided by your lender. 2010 turbotax   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. 2010 turbotax You can treat the balance as zero for any month the mortgage was not secured by your qualified home. 2010 turbotax   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. 2010 turbotax   If your lender can give you your average balance for the year, you can use that amount. 2010 turbotax Example. 2010 turbotax Ms. 2010 turbotax Brown had a home equity loan secured by her main home all year. 2010 turbotax She received monthly statements showing her average balance for each month. 2010 turbotax She can figure her average balance for the year by adding her monthly average balances and dividing the total by 12. 2010 turbotax Mixed-use mortgages. 2010 turbotax   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). 2010 turbotax 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). 2010 turbotax   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. 2010 turbotax Do not use the methods described earlier in this section to figure the average balance of either category. 2010 turbotax Instead, for each category, use the following method. 2010 turbotax Figure the balance of that category of debt for each month. 2010 turbotax 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. 2010 turbotax 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. 2010 turbotax Add together the monthly balances figured in (1). 2010 turbotax Divide the result in (2) by 12. 2010 turbotax   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. 2010 turbotax Example 1. 2010 turbotax In 1986, Sharon took out a $1,400,000 mortgage to buy her main home (grandfathered debt). 2010 turbotax 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. 2010 turbotax 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). 2010 turbotax Under the loan agreement, Sharon must make principal payments of $1,000 at the end of each month. 2010 turbotax During 2013, her principal payments on the second mortgage totaled $10,000. 2010 turbotax 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. 2010 turbotax The January and February balances were zero. 2010 turbotax The March through December balances were all $180,000, because none of her principal payments are applied to the home acquisition debt. 2010 turbotax (They are all applied to the home equity debt, reducing it to $10,000 [$20,000 − $10,000]. 2010 turbotax ) The monthly balances of the home acquisition debt total $1,800,000 ($180,000 × 10). 2010 turbotax Therefore, the average balance of the home acquisition debt for 2013 was $150,000 ($1,800,000 ÷ 12). 2010 turbotax Example 2. 2010 turbotax The facts are the same as in Example 1. 2010 turbotax In 2014, Sharon's January through October principal payments on her second mortgage are applied to the home equity debt, reducing it to zero. 2010 turbotax The balance of the home acquisition debt remains $180,000 for each of those months. 2010 turbotax 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). 2010 turbotax The monthly balances total $2,157,000 [($180,000 × 10) + $179,000 + $178,000]. 2010 turbotax Therefore, the average balance of the home acquisition debt for 2014 is $179,750 ($2,157,000 ÷ 12). 2010 turbotax L