AL and FL Mortgage News

Did you buy your primary residence in 2015?  Ready to maximize your IRS-1040 deductions?

If you answered yes to both questions then here a few pointers on how to educate yourself and keep more of your money at tax time.  Notice: we are not licensed tax professionals, this is not tax advice so please ask a tax professional about the accuracy of this information before filing.  This information should be used only to help you not miss possible deductions. 

Some forms you will need to gather: 
If you applied for your loan before October 3rd, 2015, you will need to locate your HUD-1 statement (typically 3-8 pages).  If you applied for your loan after this date, you will need to locate your 5-6 page Closing Disclosure.  Also you will want to find all Form(s) 1098 for the mortgage(s) and the property tax bill(s) you have on this property.

IRS 1098-T
Whenever you closed, the IRS 1098-T your lender generates will report all mortgage interest and mortgage insurance you paid in a tax year.  You will want to enter the lender/servicer's name, tax ID, and the amount(s) you paid for both to get your deduction on your primary residence.  

Closing Disclosure Loans
You can't claim a deduction on items paid on your behalf by the seller or others which are the two columns on the right hand side of pages 2-3 so look to the middle column labeled Borrower-Paid.  Here are some amounts to examine and report if applicable. 

Lines A1-A3 Origination Charges 
Lines C4 through C9 Various Title Charges
Line C6 - Lenders Title Insurance
Line H6 - Owner's Title Insurance 
Line E1 - Recording Fees
Line E2 - Transfer Taxes
Line F3 - Prepaid Interest - should already be included on your 1098-T

Please note: You can not deduct for costs/items paid by the seller on your behalf so be sure you are not claiming a deduction for something you did not pay for.

HUD-1 Loans
The HUD-1 is typically 4 pages but can have addenda up to 7-8 pages. The first 3 pages contain most of the information you will need for tax filing.  It has sections A-L and has line items 100-1400 but you will want to pay attention to Sections I through Section L.

Section I -  Settlement/Disbursement Date in
Section L - Settlement Charges - see column "Paid From Borrowers Funds"

Line 803 - Adjusted Origination Charges
Line 901 - should already be included in your 1098-T
Lines 1100-1115 - 
Line 1201 - Government recording charges/fees
Line 1203 - Transfer Taxes
Line 1204 - City/County/Tax/Stamps
Line 1205 - State tax/stamps

Section J - Summary of Borrower's Transaction
For any items on lines 100 through 200, you may need to report items paid for by the seller on your behalf.  For example if the seller paid $2,000 of your closing costs you will need to report those items as paid by the seller and not you.


Posted by Devin Murray on February 10th, 2016 1:17 PM



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