I know the loan is tax deductible, but if I choose not to report it, what are the consequences?
2007-04-04 08:33:51 · 5 answers · asked by Yahoostar 2 in Business & Finance ➔ Taxes ➔ United States
Will this type of a loan appear anywhere else while preparing taxes or any other place? Would this type of a loan have any effect on my current original mortgage?
2007-04-04 08:43:39 · update #1
As someone stated, a copy of 1098 will go to IRS. What can they do if I don't report it?
2007-04-04 08:54:00 · update #2
If you paid Home Mortgage Interest on your residence last year, and you received a 1098 from the lender, you can take the deduction if it along with other possible deductions are better than your Standard deduction or you can choose not to itemize this possible deduction from your taxes. There is no penalty.
In our State you are not required to Itemize on your Federal return in order to itemize on your State, so many taxpayers loose several hundred dollars a year because of that.
good luck
2007-04-04 08:40:34 · answer #1 · answered by Wood Smoke ~ Free2Bme! 6 · 0⤊ 0⤋
Your loan company will generate a 1098 Form listing the amount you paid in interest on your loan during the last tax year. They will also send a copy to the IRS. The IRS knows you have the loan from the 1098. Why wouldn't you want to claim the interest deduction?
2007-04-04 08:47:17 · answer #2 · answered by bettyrubleinspurs 4 · 0⤊ 0⤋
You can choose to take a standard deduction instead of itemizing your interest. The loan is not income and need not be reported because you have to repay it.
2007-04-04 08:38:08 · answer #3 · answered by Anonymous · 1⤊ 0⤋
If you don't claim the interest, you lose the deduction. The IRS has no interest in the loan itself and does not track it.
2007-04-04 08:37:50 · answer #4 · answered by Bostonian In MO 7 · 1⤊ 0⤋
No consequences if you don't report it - you only report it if you get an advantage from it, by itemizing deductions including the interest.
2007-04-04 13:53:07 · answer #5 · answered by Judy 7 · 0⤊ 0⤋