Amending 2009 Already

[BOB W]

Yep, it happens every year.... " I have everything and I want to get my return done now". Comes in and I complete their return.

And what do you know....." I just got something in the mail, do I need to file it?"

In my current case this client got a reverse mortgage in 2009. He did not think it effected his tax return, but it does. The mortgage insurance premium is deductible on "A" but on a separate interest line.

Just thought I would bring this up for those that have clients with reverse mortgages.

[DaveO]

I thought the mortgage premium was only deductible on acquisition debt and then only if paid. Are not these premiums simply added to the debt?

[BOB W]

I thought the mortgage premium was only deductible on acquisition debt and then only if paid. Are not these premiums simply added to the debt?

His 1098 says to report on Schedule A box 4........

[New York Enrolled Agent]

In my current case this client got a reverse mortgage in 2009. He did not think it effected his tax return, but it does. The mortgage insurance premium is deductible on "A" but on a separate interest line.

Just thought I would bring this up for those that have clients with reverse mortgages.

MIP is deductible only when used in conjunction with acquistion debt. It seems to me most reverse mortgages would involve equity debt. I don't think you can make the blanket statement "The mortgage insurance premium is deductible on "A" but on a separate interest line" without some equivocation.

[BOB W]

MIP is deductible only when used in conjunction with acquistion debt. It seems to me most reverse mortgages would involve equity debt. I don't think you can make the blanket statement "The mortgage insurance premium is deductible on "A" but on a separate interest line" without some equivocation.

You are correct, it should not be a blanket statement.. Can I assume that if a 1098 is issued with a $ amount for Box 4 that it is deductible? This would probably happen in the first year due to the large settlement fees in order to close on the reverse mortgage. Those fees include PMI.

[RitaB]

Not changing the subject

Well, OK, a little bit.

For a couple of years I would redo returns free gratis or for cheap when they got another form. I quit doing that, and I feel a lot better.

[Kram BergGold]

not deductible

Assuming there was zero debt on the house when the reverse mortgage was taken out, none of the interest is deductible as none is connected to aquisition debt which was zero.
Now if there was an existing mortgage when the reverse mortgage was taken out then you have to figure out how much of that mortgage was aquisition debt. Then the % of PMI connected to the A D would be deductible.

[ChEAr$]

You are correct, it should not be a blanket statement.. Can I assume that if a 1098 is issued with a $ amount for Box 4 that it is deductible? .

"Assume?" (grin ) anyway.....

No matter what the mortgage company may print on a 1098, at least we know it is not
deductible due to the circumstances. (The mortgage company should have said, "if
deductible, report it... thus and thus...."

Reminds me of a house for sale sign I see every day driving to work which proclaims that
"This house qualifies for $8,000 tax credit." (Houses QUALIFY on their own? grin)

[Possi]

Amendment prices

Well, OK, a little bit.

For a couple of years I would redo returns free gratis or for cheap when they got another form. I quit doing that, and I feel a lot better.

I always charge to amend the tax return when the client insisted that all the paperwork was in, and it was not. If it was not my fault, and it causes no extra forms to generate, I charge a flat fee of $30, even if it is a W2. If it causes more forms to generate, say Sch D, I also charge for the form.

I, too, feel a lot better... =)

[BOB W]

Well, OK, a little bit.

For a couple of years I would redo returns free gratis or for cheap when they got another form. I quit doing that, and I feel a lot better.

I charge about 75+ issues and complexity.

[MAW TAX]

No big hurry...

Yep, it happens every year.... " I have everything and I want to get my return done now". Comes in and I complete their return.

And what do you know....." I just got something in the mail, do I need to file it?"

In my current case this client got a reverse mortgage in 2009. He did not think it effected his tax return, but it does. The mortgage insurance premium is deductible on "A" but on a separate interest line.

Just thought I would bring this up for those that have clients with reverse mortgages.

For me, I won't amend a current year return this early in the season. I'll wait for more paperwork to trickle in, as it usually does in cases like this.

I'm sorta new here, BTW first posted back in 05.....forgot my old login information....but I don't post too often. Things are slow right now, I usually start in Feb. But last year I got one like your client and we filed in January. This person was in a hurry to get his refund last year and usually had everything ready before he'd ask me to file,......so I was surprised but suspicious....since he usually has to wait until Mid March or so.......Anywho.... that is how I handled it.....and he called several times with more paperwork and then did the amend when things looked normal again.....it never fails with folks in a rush!

[taxea]

I charge $100 for an amended return if the error isn't mine.

FYI: If you need to "amend" a current year return before 4/15....you don't use 1040X but, rather, make the correction on the original return, print it out, and write "Corrected Return" in large letters on the top of 1040 pg 1, same for state. This info came to me from the IRS.

[S T]

TAXEA Your Source

I am not finding a reference to your post

FYI: If you need to "amend" a current year return before 4/15....you don't use 1040X but, rather, make the correction on the original return, print it out, and write "Corrected Return" in large letters on the top of 1040 pg 1, same for state. This info came to me from the IRS.

The instructions that I find are

What If I Made a Mistake?
Errors may delay your refund or result in notices being sent to you. If you discover an error, you can file an amended return or claim for refund.
Amended Returns and Claims for Refund
You should correct your return if, after you have filed it, you find that:
You did not report some income,
You claimed deductions or credits you should not have claimed,
You did not claim deductions or credits you could have claimed, or
You should have claimed a different filing status. (Once you file a joint return, you cannot choose to file separate returns for that year after the due date of the return. However, an executor may be able to make this change for a deceased spouse.)

If you need a copy of your return, see Copies of returns under What Records Should I Keep, earlier in this chapter.

Form 1040X. Use Form 1040X, Amended U.S. Individual Income Tax Return, to correct a return you have already filed. An amended tax return cannot be filed electronically under the e-file system.

actually from one of your Favorite Pub references, Pub 17.

For form 1040, I have always filed 1040X for any changes that needed to be made to the "original" filed return, regardless of due date/filing date.

I would like your "reference" on a change to this procedure

Sandy

[JohnH]

I'm thinking the filing of a "Corrected Return" rather than "Amended" before Apr 15 is an outdated procedure - it was changed several years ago.

[Jesse]

I'm thinking the filing of a "Corrected Return" rather than "Amended" before Apr 15 is an outdated procedure - it was changed several years ago.

I'm thinking you're correct.