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The IRS allows you to deduct the mortgage interest, private mortgage insurance and points paid for loan closings on your tax return. You can also deduct the mortgage interest on second homes and vacation homes including trailers and boats (must have sleeping, cooking and bathroom facilities).


Landlords should use the Rental Property Worksheet for reporting mortgages and taxes on rentals.


New Home Purchase

If you are a new home owner, congratulations. Please send a copy of your HUD or closing statement for the purchase- there are three reasons.


1. determine real estate taxes paid by you thru closing,

2. determine if any points were paid with your loan, and

3. to help you determine basis information if you sell or convert to rental.


If your move was work-related, please remember to send us your moving expenses.


Form 1098 Mortgage Interest

If you received a 1098 Mortgage Interest statement from a lender, new IRS rules require the entire statement to be entered on your tax return. Please provide all pages of all 1098 mortgage statements that you receive. One more favor- if the property address is not the same as the mailing address, please scribble the property address on the form. This is critical for second homes and rentals.


The IRS allows the mortgage interest deduction of a loan that is not in your name as long as you have an interest in the property associated with the loan. For example, if your parents financed the house you live in, but you pay the mortgage and maintain the house, then you are allowed to deduct the mortgage interest.


Real Estate Property Taxes

During the recent flurry of refinancing activities, real estate taxes do not get reported on your gaggle of Form 1098s. Please let us know if real estate taxes were paid out of escrow and the amount. Remember, some states such as Colorado pay real estate taxes in arrears. This can only be captured from your HUD or closing statement. So, please send than too!


Caution- Bank of America routinely puts the real estate taxes paid on the back of their forms. Either send both pages, or scribble the amount on the front of your form.


Mortgage Interest Paid Not Reported on a Form 1098

One taxpayer’s deduction is another taxpayer’s income. So, the IRS requires that we report the name, address and social security number of individual or company who provided financing and charged you interest if you intend to deduct it.


The Watson CPA Group takes the security and safety of your personal information very seriously. All information is SSL encrypted through GeoTrust.


If you intend to deduct mortgage interest not reported on a 1098 Mortgage Interest Form, please provide the name, address and SSN of the person or company below.

Private Mortgage Insurance (PMI)

Private mortgage insurance deduction is always on the Congress chopping block. The amount paid is rarely displayed on a 1098 Mortgage Interest form. Please review your year-end summary from your lender. Be aware that at $100,000 in income this deduction begins to phae out.

Purchase, Refinance

Points associated with purchases and refinancing may be deducted. If this pertains to you, please click Yes below and provide a copy of your HUD or closing statement so we can review it for deductions and to track the basis of the property (for future sale).

Yes     No

First Time Home Buyer Credit (FTHBC)

The First Time Home Buyer Credit came in two forms. The $7,500 version is required to be paid back in increments of $500 per year, like a loan. The other version is the $8,000 credit that was not considered a loan. Both had rules about selling the house or converting it to a rental within a certain time period.

Yes     No


If Yes, how much have you paid so far? And what was the original purchase price and date purchased?

Real Estate Property Taxes

Property taxes paid are not always reported on a Form 1098- if this is true, please review your year-end statements. Do not report property taxes on rental properties- that is on the Rental Property Worksheet. Remember that some states (such as Colorado) pay property taxes in arrears so a review of your HUD or closing statement is a must. It is not the year of the property tax charge, rather the year you PAID the tax (this is because most taxpayer are cash based versus accrual based- fancy accounting terms).

Did you pay any property taxes in 2017 that would normally be due in 2018? If so, do you know if your state and county assess property taxes in arrears or in the current year? Please give us additional information if this situation applies to you-

Energy Improvements

You can apply this home energy tax credit towards 30% of the cost of alternative energy equipment installed on or in your home. Energy Star has a nice summary of the tax credits specific to each piece of equipment or improvement. Qualified equipment can include the following:


  • Solar electric property.
  • Solar water heating property.
  • Fuel cell property.
  • Small wind energy property.
  • Geothermal heat pump property.
  • Qualified fuel cell property credit is limited to $500 for each one-half kilowatt of capacity of the property.
  • There is no dollar limit on the Residential Energy Efficient Property Credit for most types of property. If your credit exceeds the tax you owe, you can carry forward the unused portion of this credit to next year’s tax return.
  • To qualify for this home energy tax credit, the home must be in the U.S. but it does not have to be your main home.
  • This credit is available through 2017.

Did you make energy improvements to your home including appliances? Have you claimed energy credits in prior tax years. If so, please fully describe below and provide receipts:


Please select the tax year that this information is associated with. In addition, please enter your name so we can group your submissions together plus your email address. Click the Submit button below to securely and safely send this information to us. You can submit as many forms as needed. If you later discover an error- simply re-submit your information and check the box below letting us know.

Yes     No