Tax Question...

[Amy26]

Ok, so bankruptcy over... new year.....new taxes! I have some questions about my mortgages in relation to my BK and my taxes...

My second mortgage company (who was a credit union) of course hates my guts... I don't even know what address they have on file for me... (I have moved like 3 or 4 times since the beginning of last year... long story... lol). I know I don't have a lot of mortgage tax from last year because I only paid like 4 months out of the 12, but still.. I imagine I still get credit for those months.

Can I call them and ask them for the tax info? Will they hang up on me? lol ... I of course can't get into my online account anymore and they used to post the info there and I could even download the form. Could I request online access again? I really really don't like them and know they don't like me so I'm terrified to call them lol.

They are required by law to send me the tax form right? They won't decide not to send it just because I filed BK right?

[nerves]

Hi Amy. They are required by law to provide the 1099. If you don't receive by the end of the first week in February, you will need to call them. You can call them now and ask when you can expect it, but they are within the law if it is postmarked by 01/31/10. However, if you moved and they don't have a current address for you, the 1099 is returned to them and "in good faith" attempt to locate you unsuccessfully, I think they are legally off the hook.

[ToughTimes]

I'd call them and let them know where I'd like them to send my 1099. And I'd ask as well for an address suitable for CRRR mail and follow up my call with a letter telling them where I'd like them to send my 1099, and then I'd send that letter CRRR to the address they've given me.

Once that's done, I'd follow up a week later with a phone call to see if they have the requested address on file as where they will be sending the 1099.

(Yeah, I have one place that really drops the ball every single time I move.)

[frogger]

They are obligated to send it to the last know address they have on file with you.

[Amy26]

Well, I gave them a call a week or so ago and they said that they were mailing them out on 1/31 and I updated my address with them. However, I still have not gotten anything from them.

I have been estimating my taxes in turbotax waiting for all my forms to get here before I submit.

So, my next question is: I put zero dollars down for mortgage interest from my second mortgage company and it didn't effect my taxes at all... It seems like no matter if I enter 0 or 2,000 dollars, it doesn't make my amount go up or down at all.

So, I guess I'm at a point with my income and deductions that adding mortgage interest isn't helping me ... if I leave it at zero and don't put anything on there (even though I did pay some mortgage interest to them) would that come back to bite me at all?

[ToughTimes]

Amy.

Insofar as I can tell, you are not required to make deductions that may reduce your tax liability.

The standard deduction has risen to a point where itemized deductions do not always reduce tax liability for those of us who have been paying (relatively) modest mortgages. You may like to try both options in TurboTax to see if it makes a difference for you to itemize vs. taking the standard deduction. I was surprised when we got a smaller mortgage to find that we did not have more to deduct than the standard deduction now provides. (Single filing separate standard deduction is $5700 and married filing jointly is at $11,400 per 2009 Form 1040.)

I have to confess that I use IRS forms and publications and not tax software, but I'm inferring that if there's no change when you change how much interest you deduct, the software is telling you that you haven't reached the threshold where itemizing will make a difference for you. Not sure who you'd ask about that.

[Amy26]

Well, I'm deducting my first mortgage, the new car purchase tax and money for school already... those are affecting my return. If I add charitable donations or adjust my second mortgage interest it does nothing.

And turbo tax is designed to tell you if you your itemized deductions are not as much as the standard deduction... and I'm filing married and my hubby doesn't have any income... so, I think I've maxed out somewhere.

[Amy26]

Oh nevermind you're right... I hit next and it told me my itemized deductions aren't as high as the standard... hehe... I guess its cause I only have like 4 months of mortgage interest last year since I stopped paying in April. So, I guess it doesn't matter if I don't list my mortgage interest from my second mortgage?

[keepinitreal]

It's possible when you add the 2nd mortgage interest, your itemized deductions will then be higher than the standard deduction.

[Amy26]

I don't think so... as in 2008 for an entire year the amount was only 6,000. I only paid 4 months of mortgage last year and that averages out to be about 500 a month in interest. My itemized deductions are at 9,000 right now and the standard deduction is 11,500 or something like that. I have plugged in numbers for it to see and it does not put me over even if I put like 2,000 dollars in there...but I know its not that much.

[BananaCabana]

Just two cents of my own opinion here....if you are using paper forms to file your taxes/or figure them remember to check the IRS.gov website for the instructions. There have been several changes to some of the credits, etc. that were made after the instruction booklets were printed. For example, a qualifying child used to be someone under the age of 17 but now it is 19. That has allowed me to claim my daughter again which can make a major difference in the taxes owed or refunded. I assume turbotax and other tax software will have automatic updates that will include the changes. Also, just to play devil's advocate, the form for your mortgage interest is a 1098 rather than a 1099. Small difference, I know, but I felt I should mention it....

As someone mentioned before those forms as supposed to be postmarked by the 31st of January. Although if you call the IRS they are usually not too concerned about it if they haven't been mailed by then. Deadlines for a company to report their 1099's to the IRS is February 28th and if they have to issue a corrected 1099 or 1098 they will send it to you and report the new amounts to the IRS. Rare occurance, but it could mean having to do an amended return if you filed your taxes really early. We are still waiting on some 1099-INT's to show up before we file but I always live in fear that I have forgotten something and will file too early only to get another form in the mail that I wasn't expecting. I should really seek some therapy, huh?