Itemized deductions

[errikgarrett]

I am trying to do 2018 taxes and for some reason my mortgage interest is not being recognized in itemized deductions. Am I doing something wrong?

[bubbafrombama]

I asked a similar question earlier. Previously, Congress had allowed the "Tax Extenders" to expire, which allowed MIP to be deducted. However, on 12/20/2019, the President signed a bill into law that allows for this again (includes for tax year 2018, as well). Hopefully TurboTax will update their software with these changes soon so we can file/amend 2018 with these new deductions.

[xmasbaby0]

You will have to be patient.  The ink is barely dry on the tax law change.  Now the IRS has to change the tax forms to include the law change, and all the tax software has to be changed and approved by the IRS before the tax forms will correctly show this very recent change. And you have three years from the original filing deadline to file an amended tax return and still receive any additional refund.

[errikgarrett]

What I hear is I need to send as is (With standard deduction instead of itemized), and pay out. Then when its changed I can amend and see what benefits/difference after the signed bill takes place. Sooooooo my procrastination has many disadvantages.........

[DoninGA]

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@errikgarrett wrote:

What I hear is I need to send as is (With standard deduction instead of itemized), and pay out. Then when its changed I can amend and see what benefits/difference after the signed bill takes place. Sooooooo my procrastination has many disadvantages.........

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What makes you think you must file your tax return as soon as possible?   You have until April 15, 2020 to file a tax return if you have taxes owed.  If there are not taxes owed or have a tax refund you have three years to file for a refund, April 15, 2023.

The software should reflect the tax code changes well before April 15, 2020.

[errikgarrett]

This is a 2018 tax year return. I owe so I assume I need to make good before penalties and fines are assessed. As I read your statement, I heard I have three years if I am owed, and not the other way around? Or, is it 3 years regardless?

[DoninGA]

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@errikgarrett wrote:

This is a 2018 tax year return. I owe so I assume I need to make good before penalties and fines are assessed. As I read your statement, I heard I have three years if I am owed, and not the other way around? Or, is it 3 years regardless?

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If you owe taxes on the 2018 tax return, those taxes were due on or before April 15, 2019.  Penalties and interest will continue to accrue until you pay the taxes.  Once the taxes have been paid the IRS will send you a bill for the penalties and interest.  IRS payment website - https://www.irs.gov/payments

There are no penalties if you file a tax return after the due date if the return is being filed for a tax refund or there are no taxes owed.  The tax return with a tax refund must be filed within three years of the original due date of the tax return, so for tax year 2018 it must be filed on or before April 15, 2022 or if an extension had been filed on or before October 15, 2022.

[rjs]

Are you asking about mortgage interest or mortgage insurance premiums? bubbafrombama and xmasbaby0 thought you were asking about mortgage insurance premiums.

If you are asking about mortgage interest, it should be showing up on your Schedule A. The new bill that was just passed last week did not make any change regarding mortgage interest. Please clarify exactly what you mean by "not being recognized." If you look at Schedule A in forms mode, is the mortgage interest shown on line 8a? If it's there, but it is not reducing your tax, your total itemized deductions might be less than your standard deduction. After you have entered all your deductions, what are the exact amounts on Schedule A line 17 and Form 1040 line 8?

If you are asking about mortgage insurance premiums, what you hear is correct, unless you want to wait until the IRS has issued revised forms and TurboTax has been updated. But that could be quite a while. The three-year deadline is for getting a refund. If you owe tax, you can wait as long as you like to file (until the IRS starts sending you notices). But you have already incurred penalties and interest, and they keep accruing. The longer you wait, the more your penalties and interest will be. So you are better off filing now without the deduction for mortgage insurance premiums, then amending later if the additional deduction saves you money.