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How To File Tax Extension Electronically

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How To File Tax Extension Electronically

How to file tax extension electronically Index A Additional child tax credit, Additional child tax credit. How to file tax extension electronically Additional Medicare Tax, What's New, Useful Items - You may want to see:, Additional Medicare Tax. How to file tax extension electronically , Additional Medicare Tax. How to file tax extension electronically , Additional Medicare Tax. How to file tax extension electronically , Additional Medicare Tax. How to file tax extension electronically , Additional Medicare Tax. How to file tax extension electronically , Additional Medicare Tax Aliens Nonresident (see specific possession) Resident (see specific possession) American Samoa, American Samoa, Double Taxation Form 4563, Form 4563. How to file tax extension electronically Armed forces, U. How to file tax extension electronically S. How to file tax extension electronically Bona fide residence, Special rule for members of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically Armed Forces, U. How to file tax extension electronically S. How to file tax extension electronically Earned income credit, Earned income credit. How to file tax extension electronically , U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically Source of income, U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically Spouse, Special rule for civilian spouse of active duty member of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically , Civilian spouse of active duty member of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically , Civilian spouse of active duty member of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically , Civilian spouse of active duty member of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically , Civilian spouse of active duty member of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically , Civilian spouse of active duty member of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically , Civilian spouse of active duty member of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically Assistance (see Tax help) Awards and prizes, Scholarships, Fellowships, Grants, Prizes, and Awards B Bankruptcy cases, Chapter 11, Chapter 11 Bankruptcy cases. How to file tax extension electronically Bona fide residence, Bona Fide Residence, Worldwide gross income. How to file tax extension electronically Closer connection, Closer Connection, Exception for Year of Move Year of move, Exception for Year of Move, Special Rules in the Year of a Move, Puerto Rico Presence test, Presence Test, Charitable sports event, Charitable Sports Event Child, defined, Days of presence in a possession. How to file tax extension electronically Nonresident aliens, Special rule for nonresident aliens. How to file tax extension electronically Possession, days in, Days of presence in a possession. How to file tax extension electronically Qualifying medical treatment, Qualifying Medical Treatment Significant connection, Significant Connection, Student, Student U. How to file tax extension electronically S. How to file tax extension electronically , days in, Days of presence in the United States. How to file tax extension electronically Reporting change in residency status, Reporting a Change in Bona Fide Residence, Worldwide gross income. How to file tax extension electronically Penalty for not reporting, Penalty for Not Filing Form 8898 Tax home, Tax Home, Year of Move Exceptions, Exceptions Government officials, Students and Government Officials Seafarers, Seafarers Students, Students and Government Officials Year of move, Year of Move, Special Rules in the Year of a Move, Puerto Rico Tests to meet, Bona Fide Residence U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces, Special rule for members of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically Year of move, Special Rules in the Year of a Move, Puerto Rico Puerto Rico, Puerto Rico C Change in residency status, reporting, Reporting a Change in Bona Fide Residence, Worldwide gross income. How to file tax extension electronically Penalty for not reporting, Penalty for Not Filing Form 8898 Change of address, Reminders Charitable sports event, Charitable Sports Event Child tax credit, additional, Additional child tax credit. How to file tax extension electronically Child, defined, Days of presence in a possession. How to file tax extension electronically Closer connection, Closer Connection, Exception for Year of Move Year of move, Exception for Year of Move, Special Rules in the Year of a Move, Puerto Rico CNMI tax return, Nonresident Alien (Other Than a Bona Fide Resident of the CNMI) Commonwealth of Puerto Rico, The Commonwealth of Puerto Rico, Double Taxation Commonwealth of the Northern Mariana Islands (CNMI), The Commonwealth of the Northern Mariana Islands, Double Taxation Form 5074, Form 5074. How to file tax extension electronically Compensation for labor or personal services, Compensation for Labor or Personal Services, Pensions. How to file tax extension electronically Alternative basis, Alternative basis. How to file tax extension electronically Multi-year compensation, Multi-year compensation. How to file tax extension electronically Time basis, Time basis. How to file tax extension electronically Competent Authority Assistance, Competent Authority Assistance How to make your request, How to make your request. How to file tax extension electronically Credit or Refund File a claim for credit or refund of any overpayment sought, Credit or Refund Credits Earned income, Reminders, Earned income credit. How to file tax extension electronically Foreign tax, U. How to file tax extension electronically S. How to file tax extension electronically Government employees. How to file tax extension electronically , Moving expense deduction. How to file tax extension electronically , Foreign Tax Credit if Possession Income Is Excluded D Deductions IRA contribution, Individual retirement arrangement (IRA) deduction. How to file tax extension electronically Moving expenses U. How to file tax extension electronically S. How to file tax extension electronically return, Moving expense deduction. How to file tax extension electronically Personal exemptions, Personal Exemptions Self-employment tax, one-half of, Self-employment tax deduction. How to file tax extension electronically Standard deduction, Standard Deduction Deductions if Possession Income Is Excluded, Deductions if Possession Income Is Excluded Dispositions of certain property, special rules for, Special Rules for Gains From Dispositions of Certain Property Dividends, Dividends. How to file tax extension electronically Double taxation, inconsistent tax treatment Mutual agreement procedure, Double Taxation E Earned income credit, Reminders, Earned income credit. How to file tax extension electronically Effectively connected income, Effectively Connected Income Estimated tax payments, Estimated tax payments. How to file tax extension electronically , Estimated tax payments. How to file tax extension electronically , Estimated tax payments. How to file tax extension electronically , Estimated tax payments. How to file tax extension electronically , Estimated tax payments. How to file tax extension electronically , Estimated Tax Exemptions, deduction for, Personal Exemptions Extension of time to file U. How to file tax extension electronically S. How to file tax extension electronically return, Extension of Time To File USVI, Extension of time to file. How to file tax extension electronically F Filing requirements American Samoa, American Samoa, Double Taxation Form 4563, Form 4563. How to file tax extension electronically CNMI, The Commonwealth of the Northern Mariana Islands, Double Taxation Form 5074, Form 5074. How to file tax extension electronically Guam, Guam, Double Taxation Form 5074, Form 5074. How to file tax extension electronically Possessions, Filing Information for Individuals in Certain U. How to file tax extension electronically S. How to file tax extension electronically Possessions, Double Taxation Puerto Rico, The Commonwealth of Puerto Rico, Double Taxation U. How to file tax extension electronically S. How to file tax extension electronically return, Filing Requirement if Possession Income Is Excluded USVI, The U. How to file tax extension electronically S. How to file tax extension electronically Virgin Islands, Double Taxation Form 1040INFO, Form 1040INFO. How to file tax extension electronically Form 4868, Extension of time to file. How to file tax extension electronically Form 8689, Form 8689. How to file tax extension electronically Foreign tax credit, Foreign Tax Credit if Possession Income Is Excluded Form 1040-ES, Estimated Tax 1040-PR, Additional child tax credit. How to file tax extension electronically 1040-SS, Self-employment tax. How to file tax extension electronically , Additional child tax credit. How to file tax extension electronically , Self-employment tax. How to file tax extension electronically , Self-employment tax. How to file tax extension electronically , Self-employment tax. How to file tax extension electronically 1040INFO, Form 1040INFO. How to file tax extension electronically 1040NR, Nonresident alien. How to file tax extension electronically , Nonresident alien. How to file tax extension electronically , Nonresident Alien (Other Than a Bona Fide Resident of the CNMI), Nonresident Alien (Other Than a Bona Fide Resident of Guam), Nonresident Alien (Other Than a Bona Fide Resident of the USVI) 1116, U. How to file tax extension electronically S. How to file tax extension electronically Government employees. How to file tax extension electronically , Moving expense deduction. How to file tax extension electronically , Foreign Tax Credit if Possession Income Is Excluded 3903, Moving expense deduction. How to file tax extension electronically , Moving expense deduction. How to file tax extension electronically , Moving expense deduction. How to file tax extension electronically , Moving expense deduction. How to file tax extension electronically , Moving expense deduction. How to file tax extension electronically , Moving expense deduction. How to file tax extension electronically 4563, Form 4563. How to file tax extension electronically 4563, illustrated example, Illustrated Example of Form 4563, Line 15. How to file tax extension electronically , 4868, Extension of time to file. How to file tax extension electronically , Automatic 6-Month Extension 5074, Form 5074. How to file tax extension electronically , Moving expense deduction. How to file tax extension electronically , Form 5074. How to file tax extension electronically , Moving expense deduction. How to file tax extension electronically 5074, illustrated example, Illustrated Example of Form 5074, Part III. How to file tax extension electronically , 8689, Form 8689. How to file tax extension electronically 8689, illustrated example, Illustrated Example of Form 8689, Part IV. How to file tax extension electronically , 8822, Reminders 8898, Reporting a Change in Bona Fide Residence, Penalty for Not Filing Form 8898 Schedule A (Form 1040), Itemized Deductions Schedule SE (Form 1040), Self-Employment Tax Free tax services, Free help with your tax return. How to file tax extension electronically Fringe benefits, Certain fringe benefits sourced on a geographical basis. How to file tax extension electronically G Government employees, U. How to file tax extension electronically S. How to file tax extension electronically (see specific possession) Grants, Scholarships, Fellowships, Grants, Prizes, and Awards Guam, Guam, Double Taxation Form 5074, Form 5074. How to file tax extension electronically H Help (see Tax help) I Income Awards and prizes, Scholarships, Fellowships, Grants, Prizes, and Awards Effectively connected income, Effectively Connected Income Grants, Scholarships, Fellowships, Grants, Prizes, and Awards Investments, Investment Income, Royalties. How to file tax extension electronically Labor or personal services, Compensation for Labor or Personal Services, Pensions. How to file tax extension electronically Pensions, Pensions. How to file tax extension electronically Sales or other dispositions of property, Sales or Other Dispositions of Property, Special Rules for Gains From Dispositions of Certain Property Scholarships and fellowships, Scholarships, Fellowships, Grants, Prizes, and Awards Services performed partly within a possession, Services performed partly inside and partly outside a relevant possession. How to file tax extension electronically , Alternative basis. How to file tax extension electronically Source of, Possession Source Income U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces, U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically U. How to file tax extension electronically S. How to file tax extension electronically income rule, U. How to file tax extension electronically S. How to file tax extension electronically income rule. How to file tax extension electronically Income from American Samoa or Puerto Rico excluded. How to file tax extension electronically , Income from American Samoa or Puerto Rico excluded. How to file tax extension electronically Deductions if income from American Samoa or Puerto Rico excluded, Deductions if Possession Income Is Excluded Interest income, Interest income. How to file tax extension electronically Inventory Sales or other dispositions of, Inventory. How to file tax extension electronically Investment income, Investment Income, Royalties. How to file tax extension electronically IRA deduction, Individual retirement arrangement (IRA) deduction. How to file tax extension electronically Itemized deductions, Itemized Deductions M Medical treatment, qualifying, Qualifying Medical Treatment Moving expense deduction U. How to file tax extension electronically S. How to file tax extension electronically return, Moving expense deduction. How to file tax extension electronically N Net Investment Income Tax, What's New, Useful Items - You may want to see:, Net Investment Income Tax. How to file tax extension electronically , Net Investment Income Tax. How to file tax extension electronically , Net Investment Income Tax Nonresident alien (see specific possession) Northern Mariana Islands (CNMI), The Commonwealth of the Northern Mariana Islands, Double Taxation P Paying your taxes, Paying Your Taxes Penalty Failure to report change in residency status, Penalty for Not Filing Form 8898 Pension income, Pensions. How to file tax extension electronically Permanent home, Permanent home. How to file tax extension electronically Personal exemptions, deduction for, Personal Exemptions Personal property Sales or other dispositions of, Personal property. How to file tax extension electronically Personal service income, Compensation for Labor or Personal Services, Pensions. How to file tax extension electronically Possession source income, Possession Source Income, Effectively Connected Income Awards and prizes, Scholarships, Fellowships, Grants, Prizes, and Awards Effectively connected income, Effectively Connected Income Grants, Scholarships, Fellowships, Grants, Prizes, and Awards Investment income, Investment Income, Royalties. How to file tax extension electronically Labor or personal services, Compensation for Labor or Personal Services, Pensions. How to file tax extension electronically Pensions, Pensions. How to file tax extension electronically Sales or other dispositions of property, Sales or Other Dispositions of Property, Special Rules for Gains From Dispositions of Certain Property Scholarships and fellowships, Scholarships, Fellowships, Grants, Prizes, and Awards Services performed partly within a possession, Services performed partly inside and partly outside a relevant possession. How to file tax extension electronically , Alternative basis. How to file tax extension electronically U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces, U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically U. How to file tax extension electronically S. How to file tax extension electronically income rule, U. How to file tax extension electronically S. How to file tax extension electronically income rule. How to file tax extension electronically Possessions, list of, Introduction Presence test, Presence Test, Charitable sports event, Charitable Sports Event Child, defined, Days of presence in a possession. How to file tax extension electronically Nonresident aliens, Special rule for nonresident aliens. How to file tax extension electronically Possession, days in, Days of presence in a possession. How to file tax extension electronically Qualifying medical treatment, Qualifying Medical Treatment Significant connection, Significant Connection, Permanent home, Permanent home. How to file tax extension electronically Student, Student U. How to file tax extension electronically S. How to file tax extension electronically , days in, Days of presence in the United States. How to file tax extension electronically Prizes, Scholarships, Fellowships, Grants, Prizes, and Awards Publications (see Tax help) Puerto Rico, The Commonwealth of Puerto Rico, Double Taxation Additional child tax credit, Additional child tax credit. How to file tax extension electronically Bona fide residence Year of move, Puerto Rico Q Qualifying medical treatment, Qualifying Medical Treatment R Real property Sales or other dispositions of, Real property. How to file tax extension electronically Reminders Earned income credit (EIC). How to file tax extension electronically , Reminders Electronic filing. How to file tax extension electronically , Reminders Rental income, Rental income. How to file tax extension electronically Resident alien (see specific possession) Royalty income, Royalties. How to file tax extension electronically S Scholarships and fellowships, Scholarships, Fellowships, Grants, Prizes, and Awards Self-employment tax U. How to file tax extension electronically S. How to file tax extension electronically return, Self-Employment Tax Self-employment tax deduction, Self-employment tax deduction. How to file tax extension electronically Services performed partly within a possession, Services performed partly inside and partly outside a relevant possession. How to file tax extension electronically , Alternative basis. How to file tax extension electronically Significant connection, Significant Connection, Source of income, Possession Source Income, Effectively Connected Income Awards and prizes, Scholarships, Fellowships, Grants, Prizes, and Awards Effectively connected income, Effectively Connected Income Grants, Scholarships, Fellowships, Grants, Prizes, and Awards Investment income, Investment Income, Royalties. How to file tax extension electronically Labor or personal services, Compensation for Labor or Personal Services, Pensions. How to file tax extension electronically Pensions, Pensions. How to file tax extension electronically Sales or other dispositions of property, Sales or Other Dispositions of Property, Special Rules for Gains From Dispositions of Certain Property Scholarships and fellowships, Scholarships, Fellowships, Grants, Prizes, and Awards Services performed partly within a possession, Services performed partly inside and partly outside a relevant possession. How to file tax extension electronically , Alternative basis. How to file tax extension electronically U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces, U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically U. How to file tax extension electronically S. How to file tax extension electronically income rule, U. How to file tax extension electronically S. How to file tax extension electronically income rule. How to file tax extension electronically Special rules for filing (see specific possession) Special rules for gains from dispositions of certain property, Special Rules for Gains From Dispositions of Certain Property Sports event, charitable, Charitable Sports Event Standard deduction, Standard Deduction Statement of Specified Foreign Financial Assets, Form 8938,, Reminders Student, Student T Tables U. How to file tax extension electronically S. How to file tax extension electronically filing requirements for most taxpayers (Table 4-1), U. How to file tax extension electronically S. How to file tax extension electronically source of income (Table 2-1), Table 2-1. How to file tax extension electronically General Rules for Determining U. How to file tax extension electronically S. How to file tax extension electronically Source of Income Tax help, How To Get Tax Help Tax home, Tax Home, Year of Move Exceptions, Exceptions Government officials, Students and Government Officials Seafarers, Seafarers Students, Students and Government Officials Year of move, Year of Move, Special Rules in the Year of a Move, Puerto Rico Taxpayer Clinics, Low Income Taxpayer Clinics, Low Income Taxpayer Clinics (LITCs). How to file tax extension electronically TTY/TDD information, How To Get Tax Help U U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces Bona fide residence, Special rule for members of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically Earned income credit, Earned income credit. How to file tax extension electronically , U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically Source of income, U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically Spouse, Special rule for civilian spouse of active duty member of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically , Civilian spouse of active duty member of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically , Civilian spouse of active duty member of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically , Civilian spouse of active duty member of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically , Civilian spouse of active duty member of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically , Civilian spouse of active duty member of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically , Civilian spouse of active duty member of the U. How to file tax extension electronically S. How to file tax extension electronically Armed Forces. How to file tax extension electronically U. How to file tax extension electronically S. How to file tax extension electronically Government employees (see specific possession) U. How to file tax extension electronically S. How to file tax extension electronically income rule, U. How to file tax extension electronically S. How to file tax extension electronically income rule. How to file tax extension electronically U. How to file tax extension electronically S. How to file tax extension electronically return with excluded income, Deductions if Possession Income Is Excluded U. How to file tax extension electronically S. How to file tax extension electronically return, possession income excluded on, Special Rules for Completing Your U. How to file tax extension electronically S. How to file tax extension electronically Tax Return, Foreign Tax Credit if Possession Income Is Excluded Credits Earned income credit, Earned income credit. How to file tax extension electronically Foreign tax credit, Foreign Tax Credit if Possession Income Is Excluded Deductions IRA contribution, Individual retirement arrangement (IRA) deduction. How to file tax extension electronically Itemized deductions, Itemized Deductions Moving expenses, Moving expense deduction. How to file tax extension electronically Personal exemptions, Personal Exemptions Self-employment tax, one-half of, Self-employment tax deduction. How to file tax extension electronically Standard deduction, Standard Deduction U. How to file tax extension electronically S. How to file tax extension electronically taxation of possession income, to get information on, Introduction U. How to file tax extension electronically S. How to file tax extension electronically Virgin Islands (USVI), The U. How to file tax extension electronically S. How to file tax extension electronically Virgin Islands, Double Taxation Form 1040INFO, Form 1040INFO. How to file tax extension electronically Form 4868, Extension of time to file. How to file tax extension electronically Form 8689, Form 8689. How to file tax extension electronically V Virgin Islands, U. How to file tax extension electronically S. How to file tax extension electronically , The U. How to file tax extension electronically S. How to file tax extension electronically Virgin Islands, Double Taxation W When to file U. How to file tax extension electronically S. How to file tax extension electronically return, When To File, Extension beyond 2 months. How to file tax extension electronically Where To File U. How to file tax extension electronically S. How to file tax extension electronically return, Where To File Which return to file (see specific possession) Who must file U. How to file tax extension electronically S. How to file tax extension electronically return, Filing Requirement if Possession Income Is Excluded Prev  Up     Home   More Online Publications
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The How To File Tax Extension Electronically

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