Mortgage Interest Tax Deductions May Get Extra Scrutiny This Year
A newly designed Form 1098 gives the IRS more information, so be prepared to defend your deduction.


In response to criticism that the IRS was not properly monitoring mortgage interest deductions, Congress was asked to require lenders to report more information about the loans. In 2015 Congress passed the new reporting rules, and they went into effect for tax year 2016. Homeowners will see the result this year in a newly designed Form 1098, which is used to report mortgage interest. The new form will include the mortgage origination date, the balance at the end of last year and the address of the property securing the loan, as well as other information useful to the IRS.
With this new wealth of information, it’s expected that the IRS could direct more attention and audit resources toward checking mortgage interest deductions.
Note: These simplified examples are intended for informational purposes only. There are exceptions, definitions, special circumstances, etc. that are not covered. This article is not a substitute for professional advice directed to your personal situation. Therefore, we urge you to contact us if you have specific questions.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Charlie Benway is president of Main Street Financial LLC, a fee-only financial planning firm. He is a CPAand Certified Financial Planner™ who advises clients on taxes and investments in a fiduciary capacity.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Charlie Benway is president of Main Street Financial LLC, a fee-only investment advisory and financial planning firm in Mount Kisco, NY. Benway is a CPA and Certified Financial Planner™ who takes a goals-based approach to managing investments in a fiduciary capacity. He has been advising clients on tax and financial matters since 1988.
-
How to Guard Against the New Generation of Fraud and Identity Theft
Fraud and identity theft are getting more sophisticated and harder to spot. Stay ahead of the scammers with our advice.
-
12 Ways to Protect Yourself From Fraud and Scams
Think you can spot the telltale signs of frauds and scams? Follow these 12 tips to stay safe from evolving threats and prevent others from falling victim.
-
Five Ways to Maintain Charitable Giving During Volatile Times: A Giver's Guide
When the economic outlook is uncertain, charitable giving is even more important — and impactful. You can be strategic by using donor-advised funds, diversifying assets and prioritizing unrestricted gifts.
-
I'm a Financial Adviser: This Is How You Can Save for Big Goals Even if You Feel Like You're Barely Getting By
Learning good financial habits — building an emergency fund, paying down debt, saving consistently — gives you flexibility, options and a path to security.
-
Financial Fact vs Fiction: Why Inflation Is Lower, But Prices Are Not
Do you think bonds protect you from stock losses? Are you confident your assets will go to your intended heirs if all you have is a will? Think again — and read on for other myths that could be leading you astray.
-
You Don't Have to Be Wealthy to Need a Wealth Manager
Navigating complex financial decisions is hard on your own, no matter how much money you have. A wealth manager can provide comprehensive financial planning, investment management, risk management and more.
-
'Buy Now, Pay Later' for Everyday Spending? This Financial Pro Thinks It's Risky
'Buy Now, Pay Later' apps can get you out of a jam when you need money quickly. But using them regularly for small purchases could create problems.
-
Five Things to Consider Before Rolling Your 401(k) into a Roth IRA
Converting at least some of an old 401(k) to a Roth IRA can offer long-term tax benefits and retirement flexibility, especially if you anticipate being in a higher tax bracket later or wish to leave a tax-free legacy.
-
From Dream Apartment to Nightmare: When Your Landlord Evicts You Through No Fault of Your Own
This is what I suggested a tenant do to get out of her lease after her landlord's inexperience and lack of action made her rental situation unsafe. It's a legal situation called 'constructive eviction.'
-
Six Steps to Being Empowered and On Track: An Expert Financial Guide for Women
While most female investors feel on track with their financial goals and empowered by managing their investments, many regret not starting sooner. Here's how you can get started and take control of your financial future.