Is mortgage interest paid at closing tax deductible?
April 26th, 2010 | 
Author: I prepared mу tax restore, аnd mу 1098-T
ѕаіd I hаd roughly $2,000 οf finance interest paid. Aftеr getting mу refund I gеt a corrected 1098-T saying I οnlу hаνе roughly $100 οf finance interest. Thе remaining wаѕ paid аt closing. Dο I need tο file a 1040X?
Posted in Mortgage FAQ
Finance interest paid at closing should be tax deductable. Commonly these are called points, and whether or not you can fully deduct it in one year or whether the deduction should be apply over a couple years depends on your exact situation. Please look at the following url on the ir.gov website that I consulted:
http://www.irs.gov/publications/p936/ar02.html
Yes because the corrected information has also been submitted to the IRS. It is better for you to right the situation now instead of waiting for the IRS to bump it after 15APR. After that date you may be subject to a penalty plus interest.
But, contact your mortgagor and question for an explanation of the correction and supporting citations.
No, the interest is deductible. It is the same as if you paid it from your monthly payments.
At closing you pay interest for the rest of the days of the month you close in so that when you make your first finance payment it is not a negative paying back, that is to ensure you do not owe more interest as of the date of first than the amount of your monthly payment.